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)

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

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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.

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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: [e-mail]
Michael S. Lamont FBN 0527122
Email: [e-mail]
Wiand Guerra King PL
3000 Bayport Drive
Suite 600
Tampa, FL 33607
Tel: [phone]
Fax: [phone]
Attorneys for the Receiver, Burton W. Wiand

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