Federal Trade Commission v. MOBE Ltd. et al

Filing 282

ORDER adopting 280 REPORT AND RECOMMENDATIONS re 279 MOTION to establish claims procedures for potential nonconsumer creditors filed by Mark J. Bernet. Signed by Judge Roy B. Dalton, Jr. on 1/6/2021. (Attachments: # 1 Supplement)(BIA)

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UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
ORLANDO DIVISION
FEDERAL TRADE COMMISSION,
Plaintiff,
v.

Case No. 6:18-cv-862-Orl-37DCI

MOBE LTD.;
MOBEPROCESSING.COM, INC.;
TRANSACTION MANAGEMENT
USA, INC.; MOBETRAINING.COM,
INC.; 9336-0311 QUEBEC INC.; MOBE
PRO LIMITED; MOBE INC.; MOBE
ONLINE LTD.; MATT LLOYD
PUBLISHING.COM PTY LTD.;
MATTHEW LLOYD MCPHEE; SUSAN
ZANGHI; and INGRID WHITNEY,
Defendants.

ORDER
Before the Court is Receiver Mark J. Bernet’s (“Receiver”) motion to establish
claims procedures. (Doc. 279 (“Motion”).) On referral, U.S. Magistrate Judge Daniel C.
Irick recommends granting the Motion and entering the proposed order (Doc. 279-3).
(Doc. 280 (“R&R”).)
No objections were filed, and the time for doing so has now passed. Absent
objection, the Court reviewed the R&R only for clear error. See Wiand v. Wells Fargo Bank,
N.A., No. 8:12-cv-557-T-27EAJ, 2016 WL 355490, at *1 (M.D. Fla. Jan. 28, 2016); see also
Macort v. Prem, Inc., 208 F. App’x 781, 784 (11th Cir. 2006). Finding none, the Court adopts
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the Report and Recommendation (Doc. 280) in full.
Accordingly, it is ORDERED AND ADJUDGED:
1.

U.S. Magistrate Judge Daniel C. Irick’s Report and Recommendation (Doc.
280) is ADOPTED, CONFIRMED, and made a part of this Order.

2.

The Receiver’s Motion to Establish Claims Procedures (Doc. 279) is
GRANTED, as follows:
I.

FINDINGS AND CONCLUSIONS

1.

This Court has jurisdiction over this matter.

2.

The Court has entered a final order and judgment against Defendants
awarding Plaintiff Federal Trade Commission $318,512,336, which
represents the amount of injury suffered by consumers and the amount of
unjust enrichment obtained by Defendants in connection with the practices
alleged in the Complaint. (Docs. 139, 242, 258, 260.) The judgments are final,
unappealed, and unappealable. As previously ordered, all money paid to
the Commission pursuant to the final order against the Receivership
Defendants may be deposited into a fund administered by the Commission
or its designee to be used for equitable relief, including consumer redress
and any attendant expenses for the administration of any redress fund.
(Doc. 260, Sec. IV.A.)

3.

To conclude the receivership, the Receiver will be required to pay legitimate
receivership expenses, including any valid and enforceable claim held by
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potential third party creditors that are legally superior to the right of
recovery of injured consumers. It therefore is appropriate for the Court to
establish summary claims procedures to be employed to afford potential
Non-Consumer Creditors the ability to present and prosecute a Claim.
4.

District courts have broad powers and wide discretion to determine relief
in equity receiverships. SEC v. Elliott, 953 F.2d 1560, 1566 (11th Cir. 1992);
SEC v. Wencke, 783 F.2d 829 (9th Cir. 1986). This discretion derives from the
inherent powers of an equity court to fashion relief, Elliott, 953 F.2d at 1566,
and any action by a trial court in supervising an equity receivership is
committed to the sound discretion of the court and will not be disturbed
unless there is a clear showing of abuse. SEC v. Pension Fund of Am. LC, No.
09-10241 (11th Cir. May 6, 2010) (citing SEC v. Safety Fin. Servs., Inc., 674 F.2d
368, 373 (5th Cir. 1982)).

5.

In granting relief in an equity receivership, it is appropriate for a district
court to fashion and utilize summary procedures, because summary
procedures reduce the time necessary to settle disputes, decrease litigation
costs, and prevent dissipation of receivership assets. Elliott, 953 F.2d at 1566.
Parties subject to summary procedures are entitled to the due process right
to notice and an opportunity to be heard; the particular process that is due
varies according to the nature of the right and the type of proceeding.
Cleveland Bd. of Educ. v. Loudermill, 470 U.S. 532 (1985); Matthews v, Eldridge,
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424 U.S. 319 (1976).
II.

DEFINITIONS

For the purpose of this Order, the following definitions apply:
1.

“Administrative Fees” means any fees and/or costs owed to the Receiver
or Special Receiver, or to professionals retained by the Receiver or Special
Receiver, in performance of the duties and responsibilities of the Receiver
and Special Receiver under the authority previously granted by the Court
(Docs. 107, 182), to the extent such fees or costs have not been settled, and
which will be the subject of separate court orders.

2.

“Business Coaching Program” means any program, plan, or product,
including those related to work-at-home opportunities, that is represented,
expressly or by implication, to train or teach a participant or purchaser how
to establish a business or earn money or other consideration through a
business or other activity.

3.

“Claim” means any right to payment, whether or not such right is reduced
to judgment, liquidated, unliquidated, fixed, contingent, matured,
unmatured, disputed, undisputed, legal, equitable, secured, or unsecured.

4.

“Claim Form” means the form attached hereto as Exhibit “1.” NonConsumer Creditors who intend to file a Claim Form may contact the
Receiver to obtain a version of the Claim Form in a fillable format.

5.

“Consumer” means any person or entity who paid money to any of the
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MOBE Receivership Defendants or any related entity (i) to enroll in a
Business Coaching Program or an Investment Opportunity, or (ii) to obtain
goods or services related to a Business Coaching Program or an Investment
Opportunity.
6.

“Contested Matter” means any proceeding brought in the Court whereby
(i) a Non-Consumer Creditor objects to the Receiver's disallowance of such
Non-Consumer Creditor's Claim, whether in whole or in part, in a
Receiver's Claim Report, or (ii) the FTC objects to the Receiver's allowance
of any Claim in favor of any Non-Consumer Creditor.

7.

“Defendant(s)”

means

Receivership

Defendants

and

Individual

Defendants, individually, collectively, or in any combination.
8.

“Individual Defendant(s)” means Matthew Lloyd McPhee a/k/a Matt
Lloyd, Susan Zanghi, and Ingrid Whitney (as personal representative of the
Estate of Deceased Defendant Russell W. Whitney), individually,
collectively, or in any combination.

9.

“Interested Parties” means Plaintiff, the Receiver, and all Non-Consumer
Creditors who timely file a Claim with the Receiver and Plaintiff.

10.

“Investment Opportunity” means anything, tangible or intangible, that is
offered, offered for sale, sold, or traded based wholly or in part on
representations, either express or implied, about past, present, or future
income, profit, or appreciation.
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11.

“McPhee” means Individual Defendant Matthew Lloyd McPhee, a/k/a
Matt Lloyd.

12.

“Non-Consumer Creditor” means any persons or entity who is not a
Consumer and who has or claims to have a Claim against the Receiver, the
Special Receiver or any of the Receivership Defendants.

13.

“Receiver” means the receiver appointed in this action, Mark J. Bernet, and
any deputy receivers that he names.

14.

“Receiver's Claim Report” means a report to be filed by the Receiver
analyzing Claim Forms received timely and determining whether each
Claim Form timely received is allowed, disallowed, or allowed in part and
disallowed in part.

15.

“Receivership Claim” means any Claim asserted by any Non-Consumer
Creditor, whether the claim arose prior to or during the pendency of the
Receivership on or after June 5, 2018, with the exception of Administrative
Fees.

16.

“Receivership Defendants” or “Receivership Entities” means MOBE Ltd.,
MOBEProcessing.com,

Inc.,

Transaction

Management

USA,

Inc.,

MOBETraining.com, Inc., 9336-0311 Quebec Inc., MOBE Pro Limited,
MOBE Inc., MOBE Online Ltd., Matt Lloyd Publishing.com Pty Ltd., and
their subsidiaries, affiliates, successors, and assigns. as well as any other
entity that has conducted any business related to Defendants’ marketing
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and sale of Business Coaching Programs or Investment Opportunities to
consumers, including receipt of Assets derived from any activity that is the
subject of the Complaint in this matter, and that the Receiver determines is
controlled or owned by any Defendant.
17.

“Special Receiver” means Burton W. Wiand, and any deputy special
receivers that he names.
III.

CONCLUSION

Accordingly, it is ORDERED AND ADJUDGED as follows:
A.

Notice Provisions.

Within thirty days of the date of this Order the Receiver and Plaintiff shall provide
notice of the provisions contained in this Order as follows:
1.

The Receiver shall post a copy of this Order on his website, www.bernetreceiver.com, and he also shall post a copy of this Order, or a link to a copy
of this Order, on his Facebook, Instagram and Twitter accounts;

2.

Plaintiff shall post this Order on its website;

3.

The Receiver shall compile a list of all known potential Non-Consumer
Creditors, to include name and contact information (physical address, email address and/or facsimile number), and provide a copy of this Order,
or a statement containing a link to this Order, to each person identified on
said list.

Upon providing notice as described above, the Receiver shall file a Notice of
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Compliance with the Court. The Notice of Compliance shall contain a list of all known
potential Non-Consumer Creditors to whom notice was provided, the date on which
notice was provided, and the manner in which it was provided, to include the physical
address, e-mail address and/or facsimile number utilized.
B.

Claims Bar Date.

All Non-Consumer Creditors shall present a completed Claim Form to the
Receiver so that he receives it by 5:00 p.m. Eastern Standard Time on Monday, March
8, 2021. The completed Claim Form, with all required attachments, must be transmitted
by e-mail or facsimile to the Receiver, Mark J. Bernet, at the following addresses or
number:
e-mail: [e-mail], [e-mail], &
[e-mail],
facsimile no.: [phone].
In the event of extraordinary circumstances, and after consulting with Plaintiff, the
Receiver may extend the deadline described herein for any particular Non-Consumer
Creditor.
Consumers harmed by the acts or practices alleged in the Complaint shall not
provide any Claim Form to the Receiver.
C.

Information to be Provided in Claim Form.

Non-Consumer Creditors who present a Claim Form to the Receiver shall provide
all information requested therein and shall attach to their Claim Form all supporting
materials as requested therein. All Claim Forms shall be signed under penalty of perjury
by the Non-Consumer Creditor presenting the Claim Form, or by an officer, manager or
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other responsible person on behalf of the Non-Consumer Creditor presenting the Claim
Form. Material modifications to the Claim Form will constitute grounds for disallowing
the Claim. The Receiver and/or Plaintiff may request additional information from any
Non-Consumer Creditor pertaining to the validity, extent, legality, enforceability or
amount set forth in such Non-Consumer Creditor’s Claim Form, and in this regard, the
Receiver and Plaintiff shall be entitled to conduct discovery relating to the NonConsumer Creditor’s claim or its relationship with Receivership Defendants, in
accordance with the following rules of civil procedure (and all corresponding local rules):
Rule 30 (depositions), Rule 33 (interrogatories), Rule 34 (document requests), and Rule 37
(compelling discovery/protective orders). Failure to cooperate with the Receiver or
Plaintiff in connection with any such request for additional information will constitute
grounds for disallowing the Claim of the non-cooperating Non-Consumer Creditor.
D.

Receiver to File Receiver's Claim Report.

The Receiver shall analyze each Claim Form timely received. The Receiver and
Plaintiff, independently or jointly, may contact Non-Consumer Creditors concerning
their Claim Forms to request additional information or otherwise to obtain clarity
concerning the Claim; in particular, the Receiver and Plaintiff may request from a NonConsumer Creditor supporting documentation and legal authority showing the validity
and legality of the Non-Consumer Creditor's Claim. By no later than Thursday, April 22,
2021, and after consulting with Plaintiff, the Receiver shall file and serve on all Interested
Parties his Receiver’s Claim Report describing each Claim Form received, to include the
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identity of Non-Consumer Creditors who filed Claims, the amount set forth on each
Claim Form, a general narrative description of each Claim presented, and the Receiver's
determination as to whether the Claim has been allowed, disallowed, or allowed in part
and disallowed in part.
E.

Procedures after Receiver's Claim Report.

After the Receiver files his Claims Report, Plaintiff shall have fourteen (14) days
to file a statement noting whether it objects to any of the Claims that the Receiver has
decided to allow in whole or in part. After Plaintiff files its statement, all Claims the
Receiver allows, as set forth in the Receiver’s Claims Report, and to the extent (i) not
objected to by Plaintiff, and (ii) arising after the commencement of this lawsuit, shall be
deemed allowed and paid from the assets of the receivership estates. The holder of any
Claim that is disallowed by the Receiver, in whole or in part, shall be permitted to object
to the Receiver’s determination by filing a written objection with the Court and serving a
copy on the Receiver and the Plaintiff, thereby initiating a Contested Matter. The holder
of any Non-Consumer Creditor Claim that has been allowed by the Receiver but objected
to by Plaintiff shall file a response to Plaintiff’s objection, serving a copy on the Receiver
and Plaintiff, which also will initiate a Contested Matter. The deadline for a NonConsumer Creditor to file an objection to the Receiver’s Claim Report shall be thirty (30)
days after the time the Receiver files his Receiver’s Claim Report, and the deadline for a
Non-Consumer Creditor to file a response to the Plaintiff’s objection to an allowed Claim
shall be thirty (30) days after Plaintiff files its objections. Any objection filed after the
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deadlines established herein shall be overruled as untimely.
The Receiver or Plaintiff shall advise the Court when a Contested Matter is ripe
for adjudication by the Court. In this regard, Rule 56, Fed R. Civ. P. shall apply, and the
Receiver, Plaintiff, and/or the Non-Consumer Victim Creditor initiating a Contested
Matter may file a motion for summary judgment. The Court shall consider motions filed
in any Contested Matter, with or without oral argument at the Court's discretion, under
the standards established in Rule 56, Fed. R. Civ. P., and shall grant any such motion if it
finds there is no genuine dispute as to any material fact, and that the movant is entitled
to the requested relief as a matter of law. Any Contested Matter not resolved under Rule
56, Fed. R. Civ. P., shall be set for a final evidentiary hearing.
In the event Non-Consumer Creditors initiating a Contested Matter believe that
they cannot present facts essential to justify a motion for summary judgment, or that they
otherwise believe are essential to develop their Claim for adjudication, then they may file
a motion with the Court seeking leave to conduct discovery. Any such motion shall
include (i) specific material facts that the Non-Consumer Creditor seeks to discover, (ii)
the form of discovery the Non-Consumer Creditor seeks to undertake, and (iii) an
explanation as to why the proposed discovery is reasonably calculated to demonstrate
those specific material facts.
F.

Payment of Claims and Expenses.

Upon payment of any allowed Receivership Claim or Receivership Claim from a
Contested Matter ultimately held in favor of a Non-Consumer Creditor by the Court, and
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after payment or settlement of Administrative Fees separately approved by the Court,
the Receiver shall distribute any remaining assets or funds to the Commission and
terminate the Receivership pursuant to the Court’s prior orders.
DONE AND ORDERED in Chambers in Orlando, Florida, on January 6, 2021.
4.

5.

Copies to:
Counsel of Record
Pro se Party
Attachments: Claim Form

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