Securities and Exchange Commission v. Secure Investement Services, Inc., et al
ORDER signed by District Judge Garland E. Burrell, Jr. on 5/8/2017 GRANTING 995 Motion to pay unclaimed funds. The scheduled 5/15/2017 hearing on the motion is VACATED. (Zignago, K.)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF CALIFORNIA
SECURITIES AND EXCHANGE
SECURE INVESTMENT SERVICES,
INC.; AMERICAN FINANCIAL
SERVICES, INC.; LYNDON GROUP,
INC.; DONALD F. NEUHAUS; and
KIMBERLY A. SNOWDEN,
Court appointed Receiver Michael J. Quilling filed a
checks sent to them, and consistent with the court approved Final
stated on its face that it would be void if not cashed within 90
The Receiver explains in the motion that fifty-
That time period has expired.
The Receiver provides the following explanation for his
request in the motion:
$26,668.22. There are 695 investors who did
cash their checks.
Their claims total
$25,370,801.18. The cost of postage to mail
695 new checks would total $319.0 ([$0].46 x
695)[,] which would leave a balance of
426,348.52 to distribute against the claims
percentage of 0.00104%[.]
of the distribution checks would be for only
a couple of dollars.
Moreover, such a
procedure would require the case to remain
open for several more months.
Receiver’s Mot. 2:23–3:2, ECF No. 995.
The Receiver further explains:
[T]he only practical way to close out this
receivership is for the Court to authorize
the receiver to send the residual balance to
the [United States Securities and Exchange]
Commission, which will then transfer those
funds to the United States Treasury.
directing the issuance of a check or money
order for the residual balance, along with
any funds received in the future by the
Receiver, made payable to the “Securities and
Exchange Commission” and mailed to Enterprise
Services Center, Accounts Receivable Branch,
6500 South MacArthur Boulevard, Oklahoma
City, OK 73169.
The check or money order
will be accompanied by an appropriate cover
letter identifying the receiver, the case
name, the civil action number and the court
authorizing the transfer.
Id. at 3:13–22 (citation omitted).
Securities and Exchange Commission and that it does not oppose
Securities and Exchange Commission and it asked the court to
appoint the Receiver.
“Where distribution to identifiable injured parties is
not feasible or appropriate, the money disgorged by the defendant
is paid to the Treasury.”
S.E.C. v. Drexel Burnham Lambert, Inc.
Since the Receiver has shown that distribution
of the remaining funds to the investors is impracticable, the
motion is GRANTED.
The Receiver is authorized to pay the residual balance
of funds totaling $28,668.22, as well as any funds received in
the future by the Receiver in connection with the receivership
estate, to the Securities and Exchange Commission for remission
to the United States Treasury.
The check or money order shall be made payable to the
“Securities and Exchange Commission” and mailed to Enterprise
Services Center, Accounts Receivable Branch, 6500 South MacArthur
Boulevard, Oklahoma City, OK 73169.
The check or money order shall be accompanied by an
appropriate cover letter identifying the receiver, the case name,
the civil action number and the court authorizing the transfer.
received pursuant to this Order to the United States Treasury.
In light of this order, the scheduled May 15, 2017
hearing on the motion is vacated.
IT IS SO ORDERED.
May 8, 2017
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