Securities and Exchange Commission v. Dalton et al

Filing 98

ORDER. Plaintiffs Motion for an Expedited Status Conference Regardingthe Status of the 927 Cole Street, Golden, Colorado, Property 97 filed 1/26/2012, is GRANTED in Part and DENIED in Part. An Amended Default Judgment SHALL BE ISSUED. By Judge Robert E. Blackburn on 2/22/2012.(sah, )

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Judge Robert E. Blackburn
10-cv-02794-REB-KLM
SECURITIES AND EXCHANGE COMMISSION,
Plaintiff,
v.
UNIVERSAL CONSULTING RESOURCES LLC, and
RICHARD DALTON,
Defendants,
and
MARIE DALTON,
Relief Defendant.

ORDER GRANTING MOTION FOR EXPEDITED STATUS CONFERENCE
RE: 927 COLE STREET PROPERTY
Blackburn, J.
This matter is before me on the Plaintiff’s Motion for an Expedited Status
Conference Regarding the Status of the 927 Cole Street, Golden, Colorado,
Property [#97]1 filed January 26, 2012. The motion is granted on the terms stated in
this order.
On December 1, 2011, I entered an order [#89] granting the plaintiff’s motion for
default judgment against relief defendant, Marie Dalton. Accordingly, on December 7,
2011, Default Judgment [#93] entered against relief defendant, Marie Dalton. Both the
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“[#97]” is an example of the convention I use to identify the docket number assigned to a
specific paper by the court’s electronic case filing and management system (CM/ECF). I use this
convention throughout this order.

order [#89] and the Default Judgment [#93] contain provisions requiring the
appointment of a receiver to sell real property owned by Marie Dalton, which property is
located at 927 Cole Street, Golden, Colorado (the Cole Street Property). Concurrent
with the above-captioned case, an in rem civil forfeiture action concerning the Cole
Street Property is pending in this court. United States v. 927 Cole Street, Golden,
Colorado, et al., Civil Action No. 11-cv-02106- PAB-CBS (D. Colo.). In addition, a
criminal case is pending against Richard Dalton and Marie Dalton. United States v.
Richard Dalton and Marie Dalton, Criminal Case No. 11-mj-01126–BNB (D. Colo.) All
three cases concern allegations that the Richard Dalton ran a scheme that fraudulently
raised over 17 million dollars from 130 investors in 13 states. In the case at bar, Marie
Dalton is named as a relief defendant only. In the in rem case and in the criminal case,
Marie Dalton is alleged to have operated the fraudulent scheme with Richard Dalton.
With regard to the Cole Street Property, the Default Judgment [#93] in this case
provides at paragraph seven (7):
That on the joint recommendation of the Securities and Exchange
Commission and the Office of the United States Attorney for the District of
Colorado, a receiver SHALL BE APPOINTED to sell the property owned
by Marie Dalton located at 927 Cole Street in Golden, Jefferson County,
Colorado;
In paragraph eight (8), the Default Judgment provides also for disposition of the
proceeds of the sale, once a sale is completed. Default Judgment [#93], pp. 3-4.
In December, 2011, the United States determined that the Cole Street Property
had been abandoned and was in danger of deterioration due to adverse weather
conditions. A judge in the in rem action granted the United States a writ of entry for the
property. Pursuant to that writ, the Internal Revenue Service secured the property. On
January 25, 2012, the court in the in rem action held a post-seizure hearing and status
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conference. At the hearing, Marie Dalton was represented by appointed counsel. The
minutes of the hearing state that an agreement has been reached with Marie Dalton and
that corresponding asset forfeiture paperwork would be filed by the parties. United
States v. 927 Cole Street, Golden, Colorado, et al., Civil Action No. 11-cv-02106PAB-CBS (D. Colo.), Minutes [#34] filed January 25, 2012.
In its present motion, the SEC asks, in effect, that the provisions of the Default
Judgment [#93] be amended to permit the Cole Street Property to be sold by the
Internal Revenue Service rather than by a receiver. The SEC represents that a sale by
the Internal Revenue Service might reduce transaction costs related to the sale of the
property.
I agree with the SEC’s suggestion. The in rem proceeding, United States v. 927
Cole Street, Golden, Colorado, et al., Civil Action No. 11-cv-02106- PAB-CBS (D.
Colo.), is a proceeding designed specifically to deal with asset forfeiture and sale of a
forfeited asset. Ms. Dalton is represented by counsel in that proceeding, but is not
represented by counsel in this case. The record in the in rem proceeding shows that
Ms. Dalton has agreed to a forfeiture of the Cole Street Property. As a result, the in rem
proceeding is the most efficient means by which issues concerning the sale of the Cole
Street Property can be resolved.
THEREFORE, IT IS ORDERED as follows:
1. That the Plaintiff’s Motion for an Expedited Status Conference Regarding
the Status of the 927 Cole Street, Golden, Colorado, Property [#97] filed January
26, 2012, is GRANTED on the terms stated in this order;
2. That an Amended Default Judgment SHALL BE ISSUED in this case;
3. That the terms of the Amended Default Judgment shall be identical to the
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terms of the extant Default Judgment [#93], except that paragraph seven (7) of the
Default Judgment [#93] shall be deleted and replaced with the language specified
below;
4. That hereafter paragraph seven (7) of the Amended Default Judgment shall
read as follows:
That the property owned by Marie Dalton located at 927 Cole Street
in Golden, Jefferson County, Colorado, SHALL BE SOLD as directed by
the court in United States v. 927 Cole Street, Golden, Colorado, et al.,
Civil Action No. 11-cv-02106- PAB-CBS (D. Colo.);
5. That once an Amended Default Judgment is filed in this case the original
Default Judgment [#93] SHALL BE supplanted and superseded by the Amended
Default Judgment;
6. That otherwise, the Plaintiff’s Motion for an Expedited Status Conference
Regarding the Status of the 927 Cole Street, Golden, Colorado, Property [#97] filed
January 26, 2012, is DENIED.
Dated February 22, 2012, at Denver, Colorado.
BY THE COURT:

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