Securities and Exchange Commission v. Nadel et al

Filing 1377

Unopposed MOTION for Attorney Fees Receiver's Twenty-Fourth Interim by Burton W. Wiand. (Attachments: # 1 Exhibit 1 -Standardized Fund Accounting Report, # 2 Exhibit 2 -Receiver's Twenty-Third Interim Report, # 3 Exhibit 3 - Prior Listing of Interim Motions, # 4 Exhibit 4 - Scoop Receivership - Representation of Scoop Receivership, # 5 Exhibit 5 - Scoop Receivership - Recovery from Investors, # 6 Exhibit 6 - Scoop Receivership - Recovery of Assets from Neil and Chris Moody, # 7 Exhibit 7 - Scoop Receivership - Quest Energy Management Group, Inc, # 8 Exhibit 8 - Categorization and Summary of all WGK Costs, # 9 Exhibit 9 - Attorney Fee Schedule, # 10 Exhibit 10 - Scoop Legal Team - Scoop Capital, LLC Receivership, # 11 Exhibit 11 - Scoop Legal Team - Recovery from Investors, # 12 Exhibit 12 - Scoop Legal Team - Recover of Assets from Neil and Chris Moody, # 13 Exhibit 13 - Scoop Legal Team - Quest Energy Management Group, Inc, # 14 Exhibit 14 - PDR Certified Public Accountants, # 15 Exhibit 15 - E-Hounds, Inc, # 16 Exhibit 16 - The RWJ Group, LLC, # 17 Exhibit 17 - Stichter Riedel Blain & Postler PA, # 18 Exhibit 18 - Proposed Order)(Perez, Jared)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
TAMPA DIVISION

SECURITIES AND EXCHANGE
COMMISSION,
Plaintiff,
v.

Case No. 8:09-cv-87-T-26TBM

ARTHUR NADEL;
SCOOP CAPITAL, LLC;
SCOOP MANAGEMENT, INC.
Defendants,
SCOOP REAL ESTATE, L.P.;
VALHALLA INVESTMENT PARTNERS, L.P.;
VALHALLA MANAGEMENT, INC.;
VICTORY IRA FUND, LTD;
VICTORY FUND, LTD;
VIKING IRA FUND, LLC;
VIKING FUND, LLC; AND
VIKING MANAGEMENT, LLC
Relief Defendants.
____________________________________/
UNOPPOSED RECEIVER’S TWENTY-FOURTH INTERIM MOTION FOR
ORDER AWARDING FEES, COSTS, AND REIMBURSEMENT OF
COSTS TO RECEIVER AND HIS PROFESSIONALS
Burton W. Wiand, as Receiver, by and through his undersigned counsel and pursuant
to Rule 66 of the Federal Rules of Civil Procedure and the Court’s Order Appointing
Receiver dated January 21, 2009 (the “Order Appointing Receiver”; Doc. 8), respectfully
moves this Court for the entry of an order awarding fees, costs, and reimbursement of costs
to the Receiver and his professionals. This motion covers all fees and costs incurred for the

six months from May 1, 2018, through October 31, 2018.

The Standardized Fund

Accounting Report (“SFAR”) for this period is attached hereto as Exhibit 1. 1 For the time
covered by this Motion, the Receiver and Wiand Guerra King P.A. (“WGK”) seek approval
to pay total fees and costs of $117,562.55 for their services (of which $57,968.84 will be paid
exclusively from Quest’s revenues and assets as detailed in the pertinent Sections below).
During this same time, the Receiver collected $607,285.46 in cash from business income,
interest/dividend income, business asset liquidation, and miscellaneous income. From the
inception of the Receivership through October 31, 2018, the Receiver has collected the net
amount of $66,358,533.78 in cash from these same sources, as well as cash and securities,
personal asset liquidation, and third-party litigation income which is less fees, expenses, and
tax payments paid during that time. To date, the Receiver has made seven distributions
totaling approximately $67 million.

As of November 26, 2018, the total funds in all

Receivership accounts are approximately $672,026.44 which includes approximately
$22,897.37 for three interim distribution checks which have not been negotiated yet.
Case Background and Status
As of the date of filing this Motion, the Court has appointed Burton W. Wiand as
Receiver over the following entities and trust:
a)

Defendants Scoop Capital, LLC; and Scoop Management, Inc.;

b)

Relief Defendants Scoop Real Estate, L.P.; Valhalla Investment Partners,
L.P.; Victory IRA Fund, Ltd.; Victory Fund, Ltd.; Viking IRA Fund, LLC;

1

The Securities and Exchange Commission (the “Commission”) provided the
Receiver with detailed Billing Instructions for Receivers in Civil Actions Commenced by the
Commission (the “Billing Instructions”). The SFAR is one of the requirements contained in
the Billing Instructions.

2

and Viking Fund LLC; Valhalla Management, Inc.; and Viking Management,
LLC; and
c)

Venice Jet Center, LLC; Tradewind, LLC; Laurel Mountain Preserve, LLC;
Laurel Preserve, LLC; Laurel Mountain Preserve Homeowners Association,
Inc.; Marguerite J. Nadel Revocable Trust UAD 8/2/07; Guy-Nadel
Foundation, Inc.; Lime Avenue Enterprises, LLC; A Victorian Garden Florist,
LLC; Viking Oil & Gas, LLC; Home Front Homes, LLC; Traders Investment
Club; Summer Place Development Corporation; Respiro, Inc.; and Quest
Energy Management Group, Inc.

(See Docs. 8, 17, 44, 68, 81, 153, 172, 454, 911, 916, 1024.) The foregoing entities and trust
are collectively referred to as the “Receivership Entities.”
On December 3, 2018, the Receiver filed the Twenty-Third Interim Report (Doc.
1376). This Interim Report contains comprehensive and detailed information regarding the
case background and status; the recovery and disposition of assets; financial information on
Receivership Entities; the proposed course of action to be taken regarding assets in the
Receivership estate; the claims process; and related litigation involving Receivership
Entities. The Receiver incorporates the Twenty-Third Interim Report into this Motion for
Fees and has attached a true and correct copy of the Twenty-Third Interim Report as Exhibit
2 for the Court’s convenience. This Interim Report reports on all of the activity which
resulted in the fees and costs sought in this Motion. Throughout this Motion, the TwentyThird Interim Report will be referred to as “Interim Report.”
Professional Services Rendered and Costs Incurred
Paragraph 4 of the Order Appointing Receiver authorizes the Receiver to
[a]ppoint one or more special agents, employ legal counsel, actuaries,
accountants, clerks, consultants and assistants as the Receiver deems
necessary and to fix and pay their reasonable compensation and reasonable
expenses, as well as all reasonable expenses of taking possession of the assets
and business of the Defendants and Relief Defendants, and exercising the

3

power granted by this Order, subject to approval by this Court at the time the
Receiver accounts to the Court for such expenditures and compensation.
Pursuant to this paragraph, the Receiver retained, among others, 2 (1) PDR Certified Public
Accountants (“PDR”) to provide accounting services; (2) Riverside Financial Group
(“Riverside”) to provide financial analyses; (3) E-Hounds, Inc. (“E-Hounds”) to provide
computer forensic services; (4) Fowler White Boggs P.A. (“Fowler White”), and
subsequently WGK to provide legal services; and (5) RWJ Group, LLC (“RWJ”) to provide
asset management services (collectively, the “Professionals”). 3 For a listing of prior Interim
Motions for Fees and Costs, including the amounts sought and awarded by the Court, please
refer to Exhibit 3.
As shown in the Interim Report, the Professionals have provided services and
incurred expenses to investigate the affairs of the Receivership Entities, preserve and sell
Receivership assets, attempt to locate and recover additional assets, administer the claims
process, and institute and pursue litigation and post-judgment collection efforts. These
services are for the benefit of aggrieved investors, creditors, and other interested parties of
the Receivership Entities.

2

The others retained in more limited capacities, which are pertinent to this motion,
include Stichter, Riedel, Blain & Prosser P.A. to provide assistance with a bankruptcy
proceeding initiated by judgment-debtor Vernon Lee and matters involving Wells Fargo.
3

As noted in the Fourth Interim Report (Doc. 240 at n.2), the Receiver and certain of
his counsel of record in this case moved from Fowler White Boggs P.A. to Wiand Guerra
King P.A.

4

I.

The Receiver.
The Receiver requests the Court award him fees for the professional services rendered

for the six months from May 1, 2018, through October 31, 2018, in the amount of
$14,875.00. The standard hourly rate which the Receiver charges clients is $460. However,
the Receiver agreed that for purposes of his appointment as the Receiver, his hourly rate
would be reduced to $350 per hour, representing nearly a twenty-four percent (24%) discount
off the standard hourly rate which he charges clients in comparable matters. This rate was
set forth in the Commission’s Emergency Motion for Appointment of Receiver and
Memorandum of Law (Doc. 6), which the Court granted on January 21, 2009 (Doc. 8).
The Receiver commenced services immediately upon his appointment. The Receiver
has billed his time for these activities in accordance with the Billing Instructions. The Billing
Instructions request that this Motion contain a narrative of each “business enterprise or
litigation matter” for which outside professionals have been employed.

The Billing

Instructions identify each such business enterprise or litigation matter as a separate “project.”
Further, the Billing Instructions request that time billed for each project be allocated to one of
several Activity Categories. 4

4

The Activity Categories set forth by the Commission in the Billing Instructions are
as follows: (1) Asset Analysis and Recovery, which is defined as identification and review of
potential assets including causes of action and non-litigation recoveries; (2) Asset
Disposition, which is defined as sales, leases, abandonment and related transaction work
(where extended series of sales or other disposition of assets is contemplated, the Billing
Instructions provide that a separate category should be established for each major
transaction); (3) Business Operations, which is defined as issues related to operation of an
ongoing business; (4) Case Administration, which is defined as coordination and compliance
activities, including preparation of reports to the court, investor inquiries, etc.; (5) Claims
Administration and Objections, which is defined as expenses in formulating, gaining
approval of and administering any claims procedure; and (6) Employee Benefits/Pensions,

5

A.

The Receivership.

During the relevant period of this Receivership, the work of the Receiver and WGK
focused on investigating, pursuing, and recovering additional assets for the Receivership;
selling or otherwise disposing of assets in a manner that is in the best interests of the
Receivership; administering the claims process and addressing objections; and pursuing
litigation and post-judgment efforts to recover false profits and other improper transfers and
damages. These activities of the Receiver are set forth in detail in the Interim Report. (Ex.
2.) A copy of the statement summarizing the Receiver’s services rendered and costs incurred
for the Receivership is attached hereto as Exhibit 4. The Receiver’s time and fees for
services rendered for each Activity Category for the six months from May 1, 2018, through
October 31, 2018, are as follows:
Receivership
Receiver’s Time and Fees for Services Rendered
Hours
Expended
7.20
.10
2.10
11.20
20.60

Activity Category
Asset Disposition
Asset Analysis and Recovery
Business Operations
Case Administration
TOTAL

Fee Amount
$2,520.00
$35.00
$735.00
$3,920.00
$7,210.00

which is defined as reviewing issues such as severance, retention, 401k coverage and
continuance of pension plan. The Billing Instructions provide that time spent preparing
motions for fees may not be charged to the Receivership Estate. In accordance with these
instructions, the Receiver created an additional Activity Category for work on fees motions
and has accounted for time spent on such work but has not charged any amount for this work.

6

B.

Discrete Litigation Matters and Projects.

In conjunction with the Receivership, the following eight discrete litigation matters or
projects have been formally commenced by the Receiver.
1.

Home Front Homes Litigation.

This was a lawsuit against Brian C. Bishop, a former employee who also had an
ownership interest in Home Front Homes, LLC (“Home Front Homes”) an operating
business. This matter has been resolved. The Receiver did not charge any fees or incur any
costs for this matter for the time covered by this Motion.
2.

Carolina Mountain Land Conservancy Easement.

This was a project involving the recovery of a conservancy easement that Laurel
Mountain Preserve, LLC, had granted to the Carolina Mountain Land Conservancy. This
matter has been resolved. The Receiver did not charge any fees or incur any costs for this
matter for the time covered by this Motion.
3.

Recovery from Investors and Others Including False Profits.

This is a project involving the Receiver’s efforts to primarily recover profits from
investors whose purported accounts received monies in an amount that exceeded their
investments. (See also Ex. 2 § IV.E.1.) These purported profits were false because they
were not based on any trading or investment gain, but rather were proceeds of a Ponzi
scheme that consisted of funds of new and existing investors. This project also included the
Receiver’s efforts to recover charitable contributions made with scheme proceeds. (See also
Ex. 2 § IV.E.). A copy of the statement summarizing the Receiver’s services rendered and
costs incurred for the Receivership is attached hereto as Exhibit 5. The Receiver’s time and

7

fees for services rendered for each Activity Category for the six months from May 1, 2018,
through October 31, 2018, are as follows:
Recovery from Investors and Others Including False Profits
Receiver’s Time and Fees for Services Rendered
Hours
Expended
Fee Amount
6.30
$2,205.00
.10
35.00
6.40
$2,240.00

Activity Category
Asset Analysis and Recovery
Case Administration
TOTAL

4.

Recovery of Assets from the Moodys.

This is a project involving the Receiver’s efforts to recover money and other assets
from the Moodys. (See also Ex. 2 § IV.D.) A copy of the statement summarizing the
Receiver’s services rendered and costs incurred for the Receivership is attached hereto as
Exhibit 6. The Receiver’s time and fees for services rendered for each Activity Category for
the six months from May 1, 2018, through October 31, 2018, are as follows:
Recovery of Assets from the Moodys
Receiver’s Time and Fees for Services Rendered
Hours
Expended
Fee Amount
1.30
$455.00
1.60
$560.00
2.90
$1,015.00

Activity Category
Asset Disposition
Asset Analysis and Recovery
TOTAL
.
5.

Recovery from Recipients of Commissions and Other Related
Transfers.

This is a project involving the Receiver’s efforts to recover commissions and/or other
related transfers from individuals and/or entities who received commissions or other

8

improper transfers from the Receivership Entities. (See Ex. 2 § IV.E.) The Receiver did not
charge any fees or incur any costs for this matter for the time covered by this Motion.
6.

Litigation Against Holland & Knight LLP.

This was a project involving the Receiver’s pursuit of malpractice and other claims
by the Hedge Funds against H&K which sought to recover the Hedge Funds’ losses that
occurred after January 1, 2003. The Receiver settled this action for payment of $25,000,000
by H&K to the Receiver. This matter has been resolved. The Receiver did not charge any
fees or incur any costs for this matter for the time covered by this Motion.
7.

Quest Energy Management Group, Inc.

This is a project involving the Receiver’s investigation, operation, and marketing of
Quest Energy Management Group, Inc. (“Quest”). (See Ex. 2 § IV.A.5; Docs. 1054, 1117,
and 1145.) Quest is an oil and gas exploration and production company based in Texas. The
Receivership was expanded to include Quest on May 24, 2013 (Doc. 1024). A copy of the
statement summarizing the Receiver’s services rendered and costs incurred for this project
for the six months from May 1, 2018, through October 31, 2018, is attached hereto as
Exhibit 7. The Receiver will pay these fees exclusively from Quest’s assets and funds
generated by its operations. 5 The Receiver’s time and fees for services rendered on this
matter for each Activity Category are as follows:

5

Since the expansion of the Receivership to include Quest, the Receiver has and will
continue to maintain a separate accounting of revenues and expenses for Quest. The
Receiver has been able to grow Quest’s revenues since that time and believes Quest likely
will generate sufficient revenues to cover its expenses.

9

Quest Energy Management Group, Inc.
Receiver’s Time and Fees for Services Rendered
Hours
Expended
Fee Amount
7.00
$2,450.00
2.30
$805.00
.30
$105.00
3.00
$1,050.00
12.60
$4,410.00

Activity Category
Asset Disposition
Business Operations
Case Administration
Claims Administration
TOTAL
8.

Schneiderman Appeal.

This was a project involving the Receiver’s appeal of two orders entered in a
clawback action. See Wiand, as Receiver v. Roberta Schneiderman and Robert D. Zimelis,
as Co-Executors of the Estate of Herbert Schneiderman and Roberta Schneiderman,
individually, Case No. 8:09-cv-87-T-26TBM (M.D. Fla.) (seeking recovery of $163,660); see
also Receiver’s Nineteenth Interim Report at § IV.E.1. This matter has been resolved. The
Receiver did not charge any fees or incur any costs for this matter for the time covered by
this Motion.
II.

Wiand Guerra King P.A. And Other Counsel.
The Receiver requests the Court award WGK fees for professional services rendered

and costs incurred for the six months from May 1, 2018, through October 31, 2018, in the
amounts of $100,574.00 and $2,113.55, respectively. A categorization and summary of all
costs for which WGK seeks reimbursement is attached hereto as Exhibit 8.
As an accommodation to the Receiver, WGK agreed to reduce the hourly rates of the
Receiver’s counsel in accordance with the discounted fee structure that was in place at
Fowler White as provided in the Fee Schedule attached hereto as Exhibit 9. WGK began
providing services on November 8, 2009. The activities of WGK for the time covered by this

10

Motion are set forth in the Interim Report. (See Ex. 2.) WGK has billed time for these
activities in accordance with the Billing Instructions.
A.

The Receivership.

As discussed above, during the relevant period of this Receivership, the work of the
Receiver and WGK focused on investigating, pursuing, and recovering additional assets for
the Receivership; selling or otherwise disposing of assets in a manner that is in the best
interests of the Receivership; administering the claims process and addressing objections;
and pursuing litigation and post-judgment collection efforts as detailed in the Interim Report.
(Ex. 2.) A copy of the statement summarizing the services rendered and costs incurred by
WGK for the foregoing for the six months from May 1, 2018, through October 31, 2018, is
attached hereto as Exhibit 10. WGK’s time and fees for services rendered on this matter for
each Activity Category are as follows:
Receivership
WGK’s Time and Fees for Services Rendered
Hours
Expended
Fee Amount
50.80
$7,692.50
2.60
$364.00
6.30
$882.00
75.50 $18,515.40
8.60
$1,542.00
143.80 $28,995.90

Activity Category
Asset Disposition
Asset Analysis and Recovery
Business Operations
Case Administration
Claims Administration
TOTAL
B.

Discrete Litigation Matters and Projects.

WGK professionals also provided services in connection with litigation matters
and/or projects discussed above.

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1.

Home Front Homes Litigation.

This was a lawsuit against Brian C. Bishop, a former employee who also had an
ownership interest in Home Front Homes, LLC (“Home Front Homes”) an operating
business. This matter has been resolved. WGK did not charge any fees or incur any costs for
this matter for the time covered by this Motion.
2.

Carolina Mountain Land Conservancy.

This was a project involving the recovery of a conservancy easement that Laurel
Mountain Preserve, LLC, granted to the Carolina Mountain Land Conservancy. This matter
has been resolved. WGK did not charge any fees or incur any costs for this matter for the
time covered by this Motion.
3.

Recovery from Investors and Others Including False Profits.

This is a project involving the Receiver’s efforts to primarily recover profits from
investors whose purported accounts received monies in an amount that exceeded their
investments. (See also Ex. 2 § IV.E.1.) These purported profits were false because they
were not based on any trading or investment gain, but rather were fruits of a Ponzi scheme
that consisted of funds of new and existing investors.

This project also included the

Receiver’s efforts to recover charitable contributions made with scheme proceeds. (See also
Ex. 2 § IV.E.) A copy of the statement summarizing WGK’s services rendered and costs
incurred for the six months from May 1, 2018, through October 31, 2018, for this project is
attached hereto as Exhibit 11. WGK’s time and fees for services rendered on this matter for
each Activity Category are as follows:

12

Recovery from Investors and Others Including False Profits
WGK’s Time and Fees for Services Rendered
Hours
Expended
3.80
28.70
.70
33.20

Activity Category
Asset Disposition
Asset Analysis and Recovery
Case Administration
TOTAL
4.

Fee Amount
$940.50
$6,382.25
$98.00
$7,420.75

Recovery of Assets from the Moodys.

This is a project involving the Receiver’s efforts to recover money and other assets
from the Moodys. (See also Ex. 2 § IV.D.) A copy of the statement summarizing WGK’s
services rendered and costs incurred for the six months from May 1, 2018, through October
31, 2018, for this project is attached hereto as Exhibit 12. WGK’s time and fees for services
rendered on this matter for each Activity Category are as follows:
Recovery of Assets from the Moodys
WGK’s Time and Fees for Services Rendered
Hours
Expended
.20
70.10
.90
71.20

Activity Category
Asset Disposition
Asset Analysis and Recovery
Case Administration
TOTAL

5.

Fee Amount
$28.00
$10,736.60
$229.50
$10,994.10

Recovery of Commissions and Other Related Transfers.

This is a project involving the Receiver’s efforts to recover commissions and/or other
related transfers from individuals and/or entities who received commissions or other
improper transfers from the Receivership Entities. (See Ex. 2 § IV.E.) WGK did not charge
any fees or incur any costs for this matter for the time covered by this Motion

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6.

Litigation Against Holland & Knight LLP.

This was a project involving the Receiver’s pursuit of malpractice and other claims
by the Hedge Funds against H&K which sought to recover the Hedge Funds’ losses that
occurred after January 1, 2003. The Receiver settled this action for payment of $25,000,000
by H&K to the Receiver. This matter has been resolved. WGK did not charge any fees or
incur any costs for this matter for the time covered by this Motion.
7.

Litigation Involving Wells Fargo.

The Receiver determined that it was prudent and necessary to retain separate counsel
to represent him in connection with all Receivership matters involving Wells Fargo. (See
Doc. 730.) The Receiver retained James, Hoyer, Newcomer & Smiljanich, P.A. (“James
Hoyer”) to represent him in connection with matters involving Wells Fargo. These matters
included (1) responding to Wells Fargo’s objections and various other motions relating to the
claims process; (2) Wells Fargo’s asserted interests in real property held by the Receivership;
and (3) Wells Fargo’s attempts to disqualify the Receiver. All of these matters have been
resolved. James Hoyer did not charge any fees or incur any costs for this matter for the time
covered by this Motion.
8.

Quest Energy Management Group, Inc.

This is a project involving the Receiver’s investigation, operation, and marketing of
Quest. (See Ex. 2 § IV.A.5; Docs. 1054 and 1117.) Quest is an oil and gas exploration and
production company based in Texas. The Receivership was expanded to include Quest on
May 24, 2013 (Doc. 1024). A copy of the statement summarizing WGK’s services rendered
and costs incurred for the six months from May 1, 2018, through October 31, 2018, is

14

attached hereto as Exhibit 13. The Receiver will pay these fees exclusively from Quest’s
assets and funds generated by its operations. WGK’s time and fees for services rendered on
this matter for each Activity Category are as follows:
Quest Energy Management Group, Inc.
WGK’s Time and Fees for Services Rendered
Hours
Expended
26.50
13.90
88.10
2.00
141.10
271.60

Activity Category
Asset Disposition
Asset Analysis and Recovery
Business Operations
Case Administration
Claims Administration
TOTAL

Fee Amount
$3,989.50
$1,946.00
$12,334.00
$306.00
$34,587.75
$53,163.25

In addition, WGK incurred costs of $395.59 in connection with Quest.
9.

Schneiderman Appeal.

This was a project involving the Receiver’s appeal of two orders entered in a
clawback action: the order referring the matter to arbitration and the order denying the
Receiver’s motion to vacate the arbitrator’s erroneous award. See Wiand, as Receiver v.
Roberta Schneiderman and Robert D. Zimelis, as Co-Executors of the Estate of Herbert
Schneiderman and Roberta Schneiderman, individually, Case No. 8:09-cv-87-T-26TBM
(M.D. Fla.) (seeking recovery of $163,660); see also Receiver’s Nineteenth Interim Report at
§ IV.E.1. This matter has been resolved. WGK did not charge any fees or incur any costs
for this matter for the time covered by this Motion.
III.

PDR Certified Public Accountants.
The Receiver requests the Court award PDR fees for professional services rendered

and costs incurred for the six months from May 1, 2018, through October 31, 2018, in the

15

amount of $14,142.50. Of this amount, $6,832.50 was incurred in connection with work
related to Quest. The Receiver will pay fees approved by the Court which relate to Quest
from Quest’s assets and revenues. PDR started providing services for the Receivership on
January 22, 2009. PDR has billed time for these services in accordance with the Billing
Instructions. Because PDR’s work for the period covered by this motion could be allocated
to specific Receivership Entities and/or related entities, PDR has billed its time separately for
each entity and indicated the appropriate Activity Category for each time entry. 6 Copies of
the statements summarizing the services rendered and costs incurred for the pertinent period
are attached as composite Exhibit 14. The total hours billed by each PDR professional and
their respective total amount of billing are set forth on composite Exhibit 14.

PDR’s

statements also include a summary of the total time spent on each relevant Activity Category
in connection with each Receivership Entity (or “project” as identified in the Billing

6

The Activity Categories that apply to PDR and Riverside as set forth in the Billing
Instructions for Financial Activities are as follows: (1) Accounting/Auditing, which is
defined as activities related to maintaining and auditing books of account, preparation of
financial statements and account analysis; (2) Business Analysis, which is defined as
preparation and review of company business plan; development and review of strategies;
preparation and review of cash flow forecasts and feasibility studies; (3) Corporate Finance,
which is defined as review financial aspects of potential mergers, acquisitions and disposition
of company or subsidiaries; (4) Data Analysis, which is defined as management information
systems review, installation and analysis, construction, maintenance and reporting of
significant case financial data, lease rejection, claims, etc.; (5) Status Reports, which is
defined as preparation and review of periodic reports as may be required by the Court;
(6) Litigation Consulting, which is defined as providing consulting and expert witness
services relating to forensic accounting, etc.; (7) Forensic Accounting, which is defined as
reconstructing books and records from past transactions and bringing accounting current,
tracing and sourcing assets; (8) Tax Issues, which is defined as analysis of tax issues and
preparation of state and federal tax returns; and (9) Valuation, which is defined as appraising
or reviewing appraisals of assets.

16

Instructions).

For a discussion of entities delineated in the statements, please refer to

Sections IV.A and IV.B of the Interim Report.
IV.

E-Hounds, Inc.
The Receiver requests the Court award E-Hounds fees for professional services

rendered and costs incurred for the six months from May 1, 2018, through October 31, 2018,
in the amount of $195.00. All of these fees were incurred in connection with work related to
Quest. The Receiver will pay fees approved by the Court which relate to Quest from Quest’s
assets and revenues. E-Hounds is a computer forensics firm which assists the Receiver in
securing and analyzing electronic data.

E-Hounds started providing services for the

Receivership on January 22, 2009. A copy of the statement summarizing the services
rendered and costs incurred for the pertinent period is attached as Exhibit 15.
V.

The RWJ Group, LLC.
The Receiver requests the Court award RWJ fees for professional services rendered

and costs incurred for the six months from May 1, 2018, through October 31, 2018, in the
amount of $14,984.97. Of this amount, $10,784.59 was incurred in connection with work
and costs related to Quest. As noted above, the Receiver will pay fees and costs approved by
the Court which relate to Quest from Quest’s assets and revenues. RWJ, which is owned and
operated by Roger Jernigan, is an asset manager for the Receivership Entities. Mr. Jernigan
assists the Receiver with overseeing ongoing business operations and property recovered by
the Receiver, including aiding with efforts to sell such businesses and property. His efforts
are designed to ensure that Receivership assets are maintained and/or enhanced to allow for
maximum recovery for the Receivership estate. RWJ started providing services for the

17

Receivership on February 1, 2010. Copies of the statements summarizing the services
rendered and costs incurred for the pertinent period are attached as composite Exhibit 16.
VI.

Miscellaneous Others.
To assist with the protection and recovery of assets in a bankruptcy proceeding

initiated by Vernon Lee, the Receiver determined that it would be in the Receivership’s best
interest to retain the services of counsel specializing in bankruptcy law. The Receiver also
determined it would be beneficial to use this same firm to assist with the Wells Fargo matter
as it related to its claims against certain properties. Accordingly, the Receiver requests the
Court award Stichter, Riedel, Blain & Prosser P.A. (“Stichter Riedel”) fees and costs for
professional services rendered and costs incurred for the six months from May 1, 2018,
through October 31, 2018, in the amounts of $5,387.00 and $33.49, respectively. Copies of
the statements summarizing the services rendered and costs incurred for the pertinent period
are attached as composite Exhibit 17.
MEMORANDUM OF LAW
It is well settled that this Court has the power to appoint a receiver and to award the
receiver and those appointed by him fees and costs for their services. See, e.g., SEC v. Elliott,
953 F.2d 1560 (11th Cir. 1992) (receiver is entitled to compensation for faithful performance
of his duties); Donovan v. Robbins, 588 F. Supp. 1268, 1272 (N.D. Ill. 1984) (“[T]he
receiver diligently and successfully discharged the responsibilities placed upon him by the
Court and is entitled to reasonable compensation for his efforts.”); SEC v. Custable, No. 94C-3755, 1995 WL 117935 (N.D. Ill. Mar. 15, 1995) (receiver is entitled to fees where work
was of high quality and fees were reasonable); SEC v. Mobley, No. 00-CV-1316, 1317RCC,

18

2000 WL 1702024 (S.D.N.Y. Nov. 13, 2000) (court awarded reasonable fees for the receiver
and his professionals); see also (Doc. 8, Order Appointing Receiver, at p. 14).

The

determination of fees to be awarded is largely within the discretion of the trial court. See
Monaghan v. Hill, 140 F.2d 31, 34 (9th Cir. 1944). In determining reasonable compensation
for the services rendered by the Receiver and his Professionals, the Court should consider the
circumstances surrounding the receivership. See Elliot, 953 F.2d at 1577.
Here, because of the nature of this case, it was necessary for the Receiver to employ
attorneys and accountants experienced and familiar with financial frauds, federal
receiverships, securities laws, banking, finance, and trusts and estates. Further, in order to
perform the services required and achieve the results obtained to date, the skills and
experience of the Receiver and the Professionals in the areas of fraud, securities, computer
and accounting forensics, and financial transactions were indispensable.
As discussed above, the Receiver and WGK have discounted their normal and
customary rates as an accommodation to the Receivership and to conserve Receivership
assets. The rates charged by the attorneys and paralegals are at or below those charged by
attorneys and paralegals of comparable skill from other law firms in the Middle District of
Florida.
This case has been time-intensive for the Receiver and his Professionals because of
the need to resolve many issues rapidly and efficiently. The attached Exhibits detail the time,
nature and extent of the professional services rendered by the Receiver and his Professionals
for the benefit of investors, creditors, and other interested parties. The Receiver anticipates

19

that additional funds will be obtained through the Receiver’s negotiations or litigation with
third parties.
Although the Commission investigated and filed the initial pleadings in this case, the
Receiver has assumed the primary responsibility for the investigation and forensic analysis of
the events leading to the commencement of the pending lawsuits, the efforts to locate and
gather investors’ money, the determination of investor and creditor claims and any ultimate
payment of these claims.

While the Receiver is sensitive to the need to conserve the

Receivership Entities’ assets, he feels that the fees and costs expended to date were
reasonable, necessary, and benefited the Receivership. Notably, the Commission has no
objection to the relief sought in this motion. Custable, 1995 WL 117935, *7 (“In securities
law receiverships, the position of the SEC in regard to the awarding of fees will be given
great weight.”).
CONCLUSION
Under the terms and conditions of the Order Appointing Receiver, the Receiver,
among other things, is authorized, empowered, and directed to engage professionals to assist
him in carrying out his duties and obligations. The Order further provides that he apply to
the Court for authority to pay himself and his Professionals for services rendered and costs
incurred. In exercising his duties, the Receiver has determined that the services rendered and
their attendant fees and costs were reasonable, necessary, advisable, and in the best interest
of the Receivership.

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WHEREFORE, Burton W. Wiand, the Court-appointed Receiver, respectfully
requests that this Court (1) award the following sums and direct that payment be made from
the Receivership assets:
Burton W. Wiand, Receiver
Wiand Guerra King P.A.
PDR Certified Public Accountants
RWJ Group, LLC
Stichter Riedel Blain & Postler, P.A.

$10,465.00
$49,128.71
$7,310.00
$4,200.38
$5,420.49

and (2) further awards the following sums and direct that payment be made from Quest’s
assets and revenues: 7
Burton W. Wiand, Receiver
Wiand Guerra King P.A.
PDR Certified Public Accountants
RWJ Group, LLC
E-Hounds, Inc.

$4,410.00
$53,558.84
$6,832.50
$10,784.59
$195.00

LOCAL RULE 3.01(g) CERTIFICATION OF COUNSEL
The undersigned counsel for the Receiver is authorized to represent to the Court that
the SEC has no objection to the Court’s granting this motion.

7

A proposed order is attached as Exhibit 18.

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CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on December 14, 2018, I electronically filed the
foregoing with the Clerk of the Court by using the CM/ECF system.

s/Jared J. Perez
Jared J. Perez, FBN 0085192
Email: [e-mail]
WIAND GUERRA KING P.A.
5505 West Gray Street
Tampa, FL 33609
Tel.: [phone]
Fax: [phone]
Attorney for the Receiver Burton W. Wiand

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RECEIVER’S CERTIFICATION
The Receiver has reviewed this Twenty-Fourth Interim Motion for Order Awarding
Fees, Costs, and Reimbursement of Costs to Receiver and His Professionals (the “Motion”).
To the best of the Receiver’s knowledge, information, and belief formed after
reasonable inquiry, the Motion and all fees and expenses herein are true and accurate and
comply with the Billing Instructions provided to the Receiver by the Securities and Exchange
Commission.
All fees contained in the Motion are based on the rates listed in the Fee Schedule,
attached as Exhibit 9. Such fees are reasonable, necessary, and commensurate with (if not
below the hourly rate that is commensurate with) the skill and experience required for the
activity performed.
The Receiver has not included in the amount for which reimbursement is sought the
amortization of the cost of any investment, equipment, or capital outlay (except to the extent
that any such amortization is included within the permitted allowable amounts set forth in the
Billing Instructions for photocopies and facsimile transmission).
To the extent the Receiver seeks reimbursement for any service which the Receiver
justifiably purchased or contracted for from a third party (such as copying, imaging, bulk
mail, messenger service, overnight courier, computerized research, or title and lien searches),
the Receiver has requested reimbursement only for the amount billed to the Receiver by the
third-party vendor and/or paid by the Receiver to such vendor. The Receiver is not making a
profit on such reimbursable service.
s/Burton W. Wiand
Burton W. Wiand, as Receiver