United States of America v. Cathcart et al

Filing 409

JUDGMENT and PERMANENT INJUNCTION. Signed by Judge Hamilton on 3/5/2010. (pjhlc2, COURT STAFF) (Filed on 3/5/2010)

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 2. UNITED STATES OF AMERICA, Plaintiff(s), v. CHARLES CATHCART, et al., Defendant(s). ___________________________________/ The court having granted plaintiff's motion for default judgment against defendant Derivium Capital USA ("Derivium USA") and having found that: 1. Derivium USA has engaged in conduct covered by 26 U.S.C. § 6700, and that injunctive relief is appropriate under I.R.C. § 7408 to prevent it from engaging in such further conduct; and Under I.R.C. § 7402(a), injunctive relief against Derivium is necessary or appropriate for the enforcement of the Internal Revenue laws, hereby enters the following permanent injunction: A. Pursuant to I.R.C. § § 7402(a) and 7408, Derivium USA is enjoined and restrained from, directly or indirectly, by use of any means or instrumentalities: 1. Organizing, promoting, marketing, selling, or implementing the "90% Loan" program that is the subject of the complaint herein; 2. Organizing, promoting, marketing, selling, or implementing any program, plan or arrangement similar to the 90% Loan program that purports to enable customers to receive valuable consideration in exchange for stocks and other securities that are transferred or pledged by those customers, without the No. C 07-4762 PJH JUDGMENT AND PERMANENT INJUNCTION UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA

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need to pay tax on any gains because the transaction is characterized as a loan rather than a sale; Engaging in any conduct subject to penalty under I.R.C. § 6700, i.e., by making or furnishing, in connection with the organization or sale of a plan or arrangement, a gross valuation overstatement or a statement Derivium USA knows or has reason to know to be false or fraudulent as to any material matter under the federal tax laws; and Selling or organizing, or causing the sale or organization, of any type of corporation, trust, limited liability company, arrangement of business entities, or plan which he knows or has reason to know advocates or facilitates material non-compliance with the federal tax laws. The court further ORDERS that the United States may conduct post-judgment discovery to monitor compliance with the injunction and the court shall RETAIN JURISDICTION over this action for the purposes of implementing and enforcing the final judgment and any additional orders necessary and appropriate to the public interest. IT IS SO ORDERED. Dated: March 5, 2010 _________________________ PHYLLIS J. HAMILTON United States District Judge