Securities and Exchange Commission v. Paul A. Garcia et al

Filing 9

FINAL JUDGMENT as to DEFENDANTS PAUL A. GARCIA, CALIBER CAPITAL MANAGEMENT, LLC, AND PARTNER MEDICAL SOLUTIONS, LLC AND RELIEF DEFENDANTS ACER CAPITAL GROUP, INC. AND GREENEONE.COM, INC. by Judge Cormac J. Carney, re consent 3 (see document for details). (dro)

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1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 CENTRAL DISTRICT OF CALIFORNIA 10 SOUTHERN DIVISION 11 12 13 SECURITIES AND EXCHANGE COMMISSION, 14 Plaintiff, 15 16 17 18 19 20 21 22 23 vs. PAUL A. GARCIA, CALIBER CAPITAL MANAGEMENT, LLC, PARTNER MEDICAL SOLUTIONS, LLC, RICHARD T. WOODS, and CALIBER PARTNERSHIP I, LLC, Case No. 8:17-cv-00174 FINAL JUDGMENT AS TO DEFENDANTS PAUL A. GARCIA, CALIBER CAPITAL MANAGEMENT, LLC, AND PARTNER MEDICAL SOLUTIONS, LLC AND RELIEF DEFENDANTS ACER CAPITAL GROUP, INC. AND GREENEONE.COM, INC. Defendants, and ACER CAPITAL GROUP, INC. and GREENEONE.COM, INC., Relief Defendants. 24 25 26 27 28 FINAL JUDGMENT AS TO GARCIA, ET AL. 1 CASE NO. 8:17-cv-00174 1 FINAL JUDGMENT 2 The Securities and Exchange Commission having filed a Complaint and 3 Defendants Paul A. Garcia (“Garcia”), Caliber Capital Management, LLC (“CCM”), 4 and Partner Medical Solutions, LLC (“Partner Medical”) (collectively “Defendants”) 5 and Relief Defendants Acer Capital Group, Inc. (“Acer”) and Greeneone.com, Inc. 6 (“Greeneone”) (collectively “Relief Defendants”) having entered a general 7 appearance; consented to the Court’s jurisdiction over Defendants and Relief 8 Defendants and the subject matter of this action; consented to entry of this Final 9 Judgment without admitting or denying the allegations of the Complaint (except as to 10 jurisdiction and except as otherwise provided herein in paragraph X); waived findings 11 of fact and conclusions of law; and waived any right to appeal from this Final 12 Judgment: 13 I. 14 IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that Garcia, 15 CCM, and Partner Medical are permanently restrained and enjoined from violating, 16 directly or indirectly, Section 10(b) of the Securities Exchange Act of 1934 (the 17 “Exchange Act”) [15 U.S.C. § 78j(b)] and Rule 10b-5 promulgated thereunder 18 [17 C.F.R. § 240.10b-5], by using any means or instrumentality of interstate 19 commerce, or of the mails, or of any facility of any national securities exchange, in 20 connection with the purchase or sale of any security: 21 (a) to employ any device, scheme, or artifice to defraud; 22 (b) to make any untrue statement of a material fact or to omit to state a 23 material fact necessary in order to make the statements made, in the light of the 24 circumstances under which they were made, not misleading; or 25 (c) 26 would operate as a fraud or deceit upon any person. 27 IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that, as 28 provided in Federal Rule of Civil Procedure 65(d)(2), the foregoing paragraph also to engage in any act, practice, or course of business which operates or FINAL JUDGMENT AS TO GARCIA, ET AL. 2 CASE NO. 8:17-cv-00174 1 binds the following who receive actual notice of this Final Judgment by personal 2 service or otherwise: (a) Garcia, CCM, and Partner Medical’s officers, agents, 3 servants, employees, and attorneys; and (b) other persons in active concert or 4 participation with Garcia, CCM, or Partner Medical or with anyone described in (a). II. 5 6 IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that 7 Garcia, CCM, and Partner Medical are permanently restrained and enjoined from 8 violating Section 17(a) of the Securities Act of 1933 (the “Securities Act”) [15 U.S.C. 9 § 77q(a)] in the offer or sale of any security by the use of any means or instruments of 10 transportation or communication in interstate commerce or by use of the mails, 11 directly or indirectly: 12 (a) to employ any device, scheme, or artifice to defraud; 13 (b) to obtain money or property by means of any untrue statement of a 14 material fact or any omission of a material fact necessary in order to make the 15 statements made, in light of the circumstances under which they were made, 16 not misleading; or 17 (c) 18 operates or would operate as a fraud or deceit upon the purchaser. 19 IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that, as 20 provided in Federal Rule of Civil Procedure 65(d)(2), the foregoing paragraph also 21 binds the following who receive actual notice of this Final Judgment by personal 22 service or otherwise: (a) Garcia, CCM, and Partner Medical’s officers, agents, 23 servants, employees, and attorneys; and (b) other persons in active concert or 24 participation with Garcia, CCM, or Partner Medical, or with anyone described in (a). 25 III. 26 to engage in any transaction, practice, or course of business which IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that 27 Garcia and CCM are permanently restrained and enjoined from violating Section 5 of 28 the Securities Act [15 U.S.C. § 77e] by, directly or indirectly, in the absence of any FINAL JUDGMENT AS TO GARCIA, ET AL. 3 CASE NO. 8:17-cv-00174 1 2 applicable exemption: (a) Unless a registration statement is in effect as to a security, making use of 3 any means or instruments of transportation or communication in 4 interstate commerce or of the mails to sell such security through the use 5 or medium of any prospectus or otherwise; 6 (b) Unless a registration statement is in effect as to a security, carrying or 7 causing to be carried through the mails or in interstate commerce, by any 8 means or instruments of transportation, any such security for the purpose 9 of sale or for delivery after sale; or 10 (c) Making use of any means or instruments of transportation or 11 communication in interstate commerce or of the mails to offer to sell or 12 offer to buy through the use or medium of any prospectus or otherwise 13 any security, unless a registration statement has been filed with the 14 Commission as to such security, or while the registration statement is the 15 subject of a refusal order or stop order or (prior to the effective date of 16 the registration statement) any public proceeding or examination under 17 Section 8 of the Securities Act [15 U.S.C. § 77h]. 18 IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that, as 19 provided in Federal Rule of Civil Procedure 65(d)(2), the foregoing paragraph also 20 binds the following who receive actual notice of this Final Judgment by personal 21 service or otherwise: (a) Garcia and CCM’s officers, agents, servants, employees, 22 and attorneys; and (b) other persons in active concert or participation with Garcia or 23 CCM or with anyone described in (a). IV. 24 25 IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that, 26 pursuant to Section 21(d)(2) of the Exchange Act [15 U.S.C. § 78u(d)(2)] and Section 27 20(e) of the Securities Act [15 U.S.C. § 77t(e)]], Garcia is prohibited from acting as 28 an officer or director of any issuer that has a class of securities registered pursuant to FINAL JUDGMENT AS TO GARCIA, ET AL. 4 CASE NO. 8:17-cv-00174 1 Section 12 of the Exchange Act [15 U.S.C. § 78l] or that is required to file reports 2 pursuant to Section 15(d) of the Exchange Act [15 U.S.C. § 78o(d)]. 3 V. 4 IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that 5 Garcia is permanently restrained and enjoined from directly or indirectly, including, 6 but not limited to, through any entity owned or controlled by him, participating in the 7 issuance, purchase, offer, or sale of any security; provided however that such 8 injunction shall not prevent Garcia from purchasing or selling securities for his own 9 personal account. 10 11 VI. IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that 12 Garcia and CCM shall pay and are jointly and severally liable for disgorgement of 13 $1,348,000, representing ill-gotten gains from the conduct alleged in the Complaint, 14 plus prejudgment interest thereon of $59,549, for a total of $1,407,549 (the 15 “Disgorgement Amount”); Partner Medical shall pay and is jointly and severally 16 liable with Garcia and CCM for $1,271,806 of the Disgorgement Amount; Acer shall 17 pay and is jointly and severally liable with Garcia and CCM for $991,445 of the 18 Disgorgement Amount and is jointly and severally liable with Partner Medical for 19 $907,911 of the Disgorgement Amount; Greeneone shall pay and is jointly and 20 severally liable with Garcia, CCM, and Partner Medical for $362,851of the 21 Disgorgement Amount; and once the Disgorgement Amount has been paid in full, 22 Garcia, CCM, Partner Medical, Acer, and Greeneone shall not have further liability 23 for disgorgement or prejudgment interest. 24 25 VII. IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that 26 Garcia and CCM shall pay and are jointly and severally liable for a civil penalty in 27 the amount of $1,348,000 (“Penalty Amount”) pursuant to Section 20(d) of the 28 Securities Act and Section 21(d)(3) of the Exchange Act; Partner Medical shall pay FINAL JUDGMENT AS TO GARCIA, ET AL. 5 CASE NO. 8:17-cv-00174 1 and is jointly and severally liable with Garcia and CCM for $1,218,000 of the Penalty 2 Amount; and once the Penalty Amount has been paid in full, Garcia, CCM, and 3 Partner Medical shall not have further liability for paying a civil penalty. VIII. 4 5 IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that 6 Defendants and Relief Defendants shall satisfy their disgorgement, prejudgment 7 interest, and penalty obligations set forth in paragraphs VI and VII above by making 8 the required payments to the Securities and Exchange Commission within 14 days 9 after entry of this Final Judgment. 10 Defendants and Relief Defendants may transmit payment electronically to the 11 Commission, which will provide detailed ACH transfer/Fedwire instructions upon 12 request. Payment may also be made directly from a bank account via Pay.gov 13 through the SEC website at http://www.sec.gov/about/offices/ofm.htm. Payment may 14 also be made by certified check, bank cashier’s check, or United States postal money 15 order payable to the Securities and Exchange Commission, which shall be delivered 16 or mailed to 17 Enterprise Services Center 18 Accounts Receivable Branch 19 6500 South MacArthur Boulevard 20 Oklahoma City, OK 73169 21 and shall be accompanied by a letter identifying the case title, civil action number, 22 and name of this Court; the name of the Defendant or Relief Defendant making the 23 payment; and specifying that payment is made pursuant to this Final Judgment. 24 Defendants and Relief Defendants shall simultaneously transmit photocopies of 25 evidence of payment and case identifying information to the Commission’s counsel 26 in this action. By making payment, Defendants and Relief Defendants relinquish all 27 legal and equitable right, title, and interest in such funds and no part of the funds shall 28 be returned to them. FINAL JUDGMENT AS TO GARCIA, ET AL. 6 CASE NO. 8:17-cv-00174 1 The Commission may enforce the Court’s judgment for disgorgement and 2 prejudgment interest by moving for civil contempt (and/or through other collection 3 procedures authorized by law) at any time after 14 days following entry of this Final 4 Judgment. Defendants and Relief Defendants shall pay post judgment interest on any 5 delinquent amounts pursuant to 28 U.S.C. § 1961. 6 The Commission may propose a plan to distribute the funds paid pursuant to 7 this Final Judgment, together with any interest and income earned thereon 8 (collectively, the “Fund”) subject to the Court’s approval. Such a plan may provide 9 that the Fund shall be distributed pursuant to the Fair Fund provisions of Section 10 308(a) of the Sarbanes-Oxley Act of 2002. The Court shall retain jurisdiction over 11 the administration of any distribution of the Fund. If the Commission staff 12 determines that the Fund will not be distributed, the Commission shall send the funds 13 paid pursuant to this Final Judgment to the United States Treasury. 14 Regardless of whether any such Fair Fund distribution is made, amounts 15 ordered to be paid as civil penalties pursuant to this Judgment shall be treated as 16 penalties paid to the government for all purposes, including all tax purposes. To 17 preserve the deterrent effect of the civil penalty, Garcia, CCM, and Partner Medical 18 shall not, after offset or reduction of any award of compensatory damages in any 19 Related Investor Action based on their payment of disgorgement in this action, argue 20 that they are entitled to, nor shall they further benefit by, offset or reduction of such 21 compensatory damages award by the amount of any part of their payment of a civil 22 penalty in this action (“Penalty Offset”). If the court in any Related Investor Action 23 grants such a Penalty Offset, Garcia, CCM, and/or Partner Medical (as applicable) 24 shall, within 30 days after entry of a final order granting the Penalty Offset, notify the 25 Commission’s counsel in this action and pay the amount of the Penalty Offset to the 26 United States Treasury or to a Fair Fund, as the Commission directs. Such a payment 27 shall not be deemed an additional civil penalty and shall not be deemed to change the 28 amount of the civil penalty imposed in this Final Judgment. For purposes of this FINAL JUDGMENT AS TO GARCIA, ET AL. 7 CASE NO. 8:17-cv-00174 1 paragraph, a “Related Investor Action” means a private damages action brought 2 against Garcia, CCM, and/or Partner Medical, by or on behalf of one or more 3 investors based on substantially the same facts as alleged in the Complaint in this 4 action. IX. 5 6 IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that the 7 Consent of Defendants and Relief Defendants is incorporated herein with the same 8 force and effect as if fully set forth herein, and that Defendants and Relief Defendants 9 shall comply with all of the undertakings and agreements set forth therein. X. 10 11 IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that, solely for 12 purposes of exceptions to discharge set forth in Section 523 of the Bankruptcy Code, 13 11 U.S.C. § 523, the allegations in the Complaint are true and admitted by Garcia, 14 and further, any debt for disgorgement, prejudgment interest, civil penalty, or other 15 amounts due by Garcia under this Final Judgment or any other judgment, order, 16 consent order, decree, or settlement agreement entered in connection with this 17 proceeding, is a debt for the violation by Garcia of the federal securities laws or any 18 regulation or order issued under such laws, as set forth in Section 523(a)(19) of the 19 Bankruptcy Code, 11 U.S.C. § 523(a)(19). 20 21 XI. IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that this Court 22 shall retain jurisdiction of this matter for the purposes of enforcing the terms of this 23 Final Judgment. 24 25 26 27 28 FINAL JUDGMENT AS TO GARCIA, ET AL. 8 CASE NO. 8:17-cv-00174 1 XII. 2 There being no just reason for delay, pursuant to Rule 54(b) of the Federal 3 Rules of Civil Procedure, the Clerk is ordered to enter this Final Judgment forthwith 4 and without further notice. 5 6 Dated: February 7, 2017 7 ____________________________________ 8 UNITED STATES DISTRICT JUDGE 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 FINAL JUDGMENT AS TO GARCIA, ET AL. 9 CASE NO. 8:17-cv-00174

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