Securities and Exchange Commission v. Nadel et al

Filing 632

MOTION to Approve Settlement re: Lee and Donald Douglas by Burton W. Wiand. (Attachments: # 1 Exhibit A - Executed Settlement Agreement)(Lamont, Michael)

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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, Relief Defendants. / RECEIVER’S MOTION TO APPROVE SETTLEMENT Burton W. Wiand, as Receiver, moves the Court for an order approving settlement of a claim against Lee and Donald Douglas for recovery of sums received from one or more Receivership Entities in excess of investment (“false profits”) on the basis of the Settlement Agreement attached as Exhibit A. MEMORANDUM IN SUPPORT The Securities and Exchange Commission (the “Commission” or “SEC”) instituted this action to “halt [an] ongoing fraud, maintain the status quo, and preserve investor assets . . . .” (Dkt. 1, Compl., ¶ 7.) Burton W. Wiand was appointed by this Court as the Receiver for Defendants and Relief Defendants and Venice Jet Center, LLC; Tradewind, LLC; Laurel Mountain Preserve, LLC; Laurel Preserve, LLC; the Marguerite J. Nadel Revocable Trust UAD 8/2/07; the Laurel Mountain Preserve Homeowners Association, Inc.; The Guy-Nadel Foundation, Inc.; Lime Avenue Enterprises, LLC; and A Victorian Garden Florist, LLC (collectively, the “Receivership Entities”). (See Order Reappointing Receiver (Dkt. 140).) Burton W. Wiand was appointed by this Court as the Receiver for Home Front Homes, LLC (Dkt. 170). Pursuant to the Order Reappointing Receiver (Dkt. 140), the Receiver has the duty and authority to: 2. Investigate the manner in which the affairs of the Receivership Entities were conducted and institute such actions and legal proceedings, for the benefit and on behalf of the Receivership Entities and their investors and other creditors as the Receiver deems necessary . . . against any transfers of money or other proceeds directly or indirectly traceable from investors in the Receivership Entities; provided such actions may include, but not be limited to, seeking imposition of constructive trusts, disgorgement or profits, recovery and/or avoidance of fraudulent transfers under Florida Statute § 726.101, et. seq. or otherwise, rescission and restitution, the collection of debts, and such orders from this Court as may be necessary to enforce this Order. Dkt. 140 at ¶ 2. The Receiver’s investigation has revealed a number of investors who received “false profits” (returns greater than their investments) to the detriment of those investors who lost money as a result of their investment. The Receiver began recovery efforts by mailing letters 2 to investors inquiring whether they agreed with the Receiver’s calculated amount of false profits and whether they would return the transfers voluntarily to expedite the process and to avoid litigation. The Receiver, with the approval of the Commission, believes it is appropriate to accept 90% of the amount claimed in consideration of payment before the commencement of litigation to recover the false profits. One of the letters was sent to Lee and Donald Douglas seeking recovery of $27,014.29 in false profits. As shown by the attached Settlement Agreement, Lee and Donald Douglas, subject to the approval of this Court, have agreed to pay 90% ($24,312.86) to be paid within 14 days after approval of this settlement. By this motion, the Receiver seeks approval of this settlement. The settlement reflected by the Settlement Agreement is in the best interests of the Receivership, the investors in the Receivership Entities, and Lee and Donald Douglas, because resolution of the claim avoids protracted litigation, conserving Receivership assets and judicial resources, and avoids the cost of litigation to Lee and Donald Douglas. WHEREFORE, the Receiver moves the Court to approve the settlement reflected by the attached Settlement Agreement. LOCAL RULE 3.01(g) CERTIFICATE 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. 3 CERTIFICATE OF SERVICE I HEREBY CERTIFY that on May 25, 2011, I electronically filed the foregoing with the Clerk of the Court by using the CM/ECF system. I further certify that I mailed the foregoing document and the notice of electronic filing by first-class mail to the following non-CM/ECF participants: Arthur Nadel Register No. 50690-018 FCI BUTNER LOW Federal Correctional Institution P.O. Box 999 Butner, NC 27509 s/ Michael S. Lamont Gianluca Morello, FBN 034997 Email: Michael S. Lamont FBN 0527122 Email: Wiand Guerra King PL 3000 Bayport Drive Suite 600 Tampa, FL 33607 Tel: (813) 347-5100 Fax: (813) 347-5198 Attorneys for the Receiver, Burton W. Wiand 4

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