Securities and Exchange Commission v. Bridge Premium Finance, LLC (f/k/a Berjac of Colorado, LLC et al

Filing 65

Final Judgment as to Michael J. Turnock re: 63 MOTION for Judgment, by Judge John L. Kane on 3/11/13. (sgrim)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO

Civil Action No.: 1:12-cv-02131-JLK-BNB
SECURITIES AND EXCHANGE COMMISSION,
Plaintiff,
v.
BRIDGE PREMIUM FINANCE, LLC (f/k/a BERJAC OF
COLORADO, LLC),
MICHAEL J. TURNOCK, and
WILLIAM P. SULLIVAN, II,
Defendants,
and
JANE K. TURNOCK,
Relief Defendant.
______________________________________________________________________________
FINAL JUDGMENT AS TO MICHAEL J. TURNOCK
______________________________________________________________________________
The Securities and Exchange Commission having filed a complaint and Defendant
Michael J. Turnock (“Defendant”) having entered a general appearance; consented to the Court’s
jurisdiction over Defendant and the subject matter of this action; consented to entry of this Final
Judgment while acknowledging his guilty plea in the related criminal case United States v.
Turnock, 13-cr-00069-CMA and the admissions in his Answer in this proceeding; waived
findings of fact and conclusions of law; and waived any right to appeal from this Final Judgment:
I.
IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that Defendant and
Defendant’s agents, servants, employees, attorneys, and all persons in active concert or

participation with them who receive actual notice of this Final Judgment by personal service or
otherwise are permanently restrained and enjoined from violating, directly or indirectly, Section
10(b) of the Securities Exchange Act of 1934 (the “Exchange Act”) [15 U.S.C. § 78j(b)] and
Rule 10b-5 promulgated thereunder [17 C.F.R. § 240.10b-5], by using any means or
instrumentality of interstate commerce, or of the mails, or of any facility of any national
securities exchange, in connection with the purchase or sale of any security:
(a)

to employ any device, scheme, or artifice to defraud;

(b)

to make any untrue statement of a material fact or to omit 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)

to engage in any act, practice, or course of business which operates or would
operate as a fraud or deceit upon any person.
II.

IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that Defendant

and Defendant’s agents, servants, employees, attorneys, and all persons in active concert or
participation with them who receive actual notice of this Final Judgment by personal service or
otherwise are permanently restrained and enjoined from violating Section 17(a) of the Securities
Act of 1933 (the “Securities Act”) [15 U.S.C. § 77q(a)] in the offer or sale of any security by the
use of any means or instruments of transportation or communication in interstate commerce or
by use of the mails, directly or indirectly:
(a)

to employ any device, scheme, or artifice to defraud;

(b)

to obtain money or property by means of any untrue statement of a material fact
or any omission of a material fact necessary in order to make the statements

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made, in light of the circumstances under which they were made, not misleading;
or
(c)

to engage in any transaction, practice, or course of business which operates or
would operate as a fraud or deceit upon the purchaser.
III.

IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that Defendant

and Defendant’s agents, servants, employees, attorneys, and all persons in active concert or
participation with them who receive actual notice of this Final Judgment by personal service or
otherwise are permanently restrained and enjoined from violating Section 5 of the Securities Act
[15 U.S.C. § 77e] by, 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

(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 Commission as to such security, or while the
registration statement is the subject of a refusal order or stop order or (prior to the

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effective date of the registration statement) any public proceeding or examination
under Section 8 of the Securities Act [15 U.S.C. § 77h].
IV.
IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that Defendant
is liable for disgorgement of $6,289,306, representing profits gained as a result of the conduct
alleged in the Complaint, together with prejudgment interest thereon in the amount of $15,723,
jointly and severally with Defendant Bridge Premium Finance, LLC. Defendant is also liable for
a civil penalty in the amount of $6,289,306 pursuant to pursuant to Section 20(d) of the
Securities Act [15 U.S.C. § 77t(d)] and Section 21(d)(3) of the Exchange Act [15 U.S.C. §
78u(d)(3)]. Defendant shall satisfy these obligations by paying $12,594,335 to the Securities and
Exchange Commission within 14 days after entry of this Final Judgment.
Defendant may transmit payment electronically to the Commission, which will provide
detailed ACH transfer/Fedwire instructions upon request. Payment may also be made directly
from a bank account via Pay.gov through the SEC website at
http://www.sec.gov/about/offices/ofm.htm. Defendant may also pay by certified check, bank
cashier’s check, or United States postal money order payable to the Securities and Exchange
Commission, which shall be delivered or mailed to
Enterprise Services Center
Accounts Receivable Branch
6500 South MacArthur Boulevard
Oklahoma City, OK 73169
and shall be accompanied by a letter identifying the case title, civil action number, and name of
this Court; Michael J. Turnock as a defendant in this action; and specifying that payment is made
pursuant to this Final Judgment. Defendant shall simultaneously transmit photocopies of

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evidence of payment and case identifying information to the Commission’s counsel in this
action.
Monies frozen in this matter pursuant to the Temporary Restraining Order [Dkt. # 7] and
the Preliminary Injunction [Dkt. # 14] in accounts under the control of Defendant shall be paid
against the amounts due pursuant to this Final Judgment, except for accounts numbered
xxxxx0356 and xxxxx0374 located at ING Bank.
Defendant’s share of the sale proceeds from sale of the residence at 3737 Gill Drive,
Denver, CO 80209-3510 shall be paid against the amounts due pursuant to this Final Judgment.
By making payments pursuant to this Final Judgment, Defendant relinquishes all legal
and equitable right, title, and interest in such funds and no part of the funds shall be returned to
Defendant.
The Commission may enforce the Court’s judgment for disgorgement and prejudgment
interest by moving for civil contempt (and/or through other collection procedures authorized by
law) at any time after 14 days following entry of this Final Judgment. Defendant shall pay post
judgment interest on any delinquent amounts pursuant to 28 U.S.C. § 1961. The Commission
shall hold the funds, together with any interest and income earned thereon (collectively, the
“Fund”), pending further order of the Court.
The Commission may propose a plan to distribute the Fund subject to the Court’s
approval. Such a plan may provide that the Fund shall be distributed pursuant to the Fair Fund
provisions of Section 308(a) of the Sarbanes-Oxley Act of 2002. The Court shall retain
jurisdiction over the administration of any distribution of the Fund. If the Commission staff
determines that the Fund will not be distributed, the Commission shall send the funds paid
pursuant to this Final Judgment to the United States Treasury.

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Regardless of whether any such Fair Fund distribution is made, amounts ordered to be
paid as civil penalties pursuant to this Judgment shall be treated as penalties paid to the
government for all purposes, including all tax purposes. To preserve the deterrent effect of the
civil penalty, Defendant shall not, after offset or reduction of any award of compensatory
damages in any Related Investor Action based on Defendant’s payment of disgorgement in this
action, argue that he is entitled to, nor shall he further benefit by, offset or reduction of such
compensatory damages award by the amount of any part of Defendant’s payment of a civil
penalty in this action (“Penalty Offset”). If the court in any Related Investor Action grants such
a Penalty Offset, Defendant shall, within 30 days after entry of a final order granting the Penalty
Offset, notify the Commission’s counsel in this action and pay the amount of the Penalty Offset
to the United States Treasury or to a Fair Fund, as the Commission directs. Such a payment shall
not be deemed an additional civil penalty and shall not be deemed to change the amount of the
civil penalty imposed in this Judgment. For purposes of this paragraph, a “Related Investor
Action” means a private damages action brought against Defendant by or on behalf of one or
more investors based on substantially the same facts as alleged in the Complaint in this action.
V.
IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that this Court shall retain
jurisdiction of this matter for the purposes of enforcing the terms of this Final Judgment.

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VI.
There being no just reason for delay, pursuant to Rule 54(b) of the Federal Rules of Civil
Procedure, the Clerk is ordered to enter this Final Judgment forthwith and without further notice.

Dated: March 11, 2013
/s/John. L. Kane
UNITED STATES DISTRICT JUDGE

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