Securities and Exchange Commission v. Nadel et al

Filing 745

RESPONSE re #733 Order filed by Wells Fargo Bank, N.A., as successor by merger to Wachovia Bank, N.A.. (Attachments: #1 Exhibit, #2 Exhibit, #3 Exhibit, #4 Exhibit, #5 Exhibit)(Barnett, Ana)

EXHIBIT C

Case 0:09-cr-60331--JlC Document

g4-1

UNÏTED STATES DISTRTCT COURT
SOUTHERN DTSTRICT OF NEW YORK
UNÏTED STATES OF

Entered on FLSD

DqpuMEryT

AIVfERTCA,

09 Cr. 085
MARC DREIER,

(,ISR)

MEMORANDI}M ORDER

::::iiiil:,
JED

S.

RAKOFF, U. S. D.,r.

Àn under-appreciated evil of substantial frauds like those of

is how they pit their victims against one anot,her.
Where, as here, the fund.s remaining after the fraud j-s uncovered are
insuffícient to make whole Dreier's numerous victims and creditors,
Marc Dreier

these unfortunates are left to sguabble over who should get what. In

this case, moreover, resolution of these competing claims involves
considerabj-on of three bodies of law -- criminal law, securities law,
and bankruptcy 1aw -- that cannot always be reconciled without some
friction.
For some time now, it has been evident to this Court in
presidj-ng over the criminal action against Dreier, and to the judges
presidj-ng over the civil

enforcement action brought against Dreier by

the Securities and Exchange Commission and the bankruptcy proceedings
invorvíng the estates of Dreier and his raw firm, Dreier LLp, that
these inherent tensions are best addressed through coordínat.ion and
cooperation by all concerned. Accordingry, on April 22, 2009, Lhe

three judges convened a joint hearing to urge such a resolution by
the affected parties. Eventually, the Government, the Commission
(which is no longer directly affected), the bankruptcy trustees, and

Case 0:09-cr-60331--JlC Document

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on FLSD Docket 03/05/201-0 Page 2 of

t3

various other affect.ed parties reached a globa1 settlement in the
form of several proposed agreemenLs and orders, Lo which oùhers filed

objections. On January 12, zOLO, Senior District ,Judge Cedarbaum,
Chief Bankrupt,cy Judge BernsLei-n, and the undersigned held a joint
hearing on the proposed set.tlemenL, to which al-l affected parties
were invited t.o attend and following which the judges received

further written submissions. Now, subjecÈ only to certain relaEed
proposals pending before the Bankruptcy Court, Lhis Court, confj-rming
its Memorandum issued on January 29, 2OlO, hereby approves the
proposed settlemenL agreements and reconfirms the Court, s prior
restituti-on order as wel1.
The first

of the proposed settlement agreements is a
"Coordj-nat.ion Agreement" bet,ween the Government and the Trustee for
the Dreier LLP bankruptcy estate (the .Chapter 1l- Trustee,, ) . Under
this agreement, the Government will not seek forfeÍture of any
recoveries generated through avoj-dance actions brought by the Chapter
11 Trustee, and the Government will release to the Chapter 1l- Trustee
ninety-seven seized artworks t.hat the Government, is presently unable
to trace to the proceeds of Dreier, s offenses. fn return, the
chapt.er Ll- Trustee promises not to contest forfeiture of the
properties listed in the schedule to the Court's Preliminary Order of
Forf eiture entered July J-3, 2OO9
Additionally, under the CoordÍnatíon Agreement, the Chapter
1l- Trustee will not challenge the forfeiture of funds d,isgorged by
GSo capital partners and its affiliates ("cso") pursuant to a
,

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proposed consent order (the "GSO Consent Order,, ) . Under the
Consent Order, GSO will,

forfeit

GSO

the Government $30,89s,027.78
an amount representing payments of interest and fees received by
facilities in connect,ion with their invesEmenÈs in Dreier's
fictitious promissory not,es. fn exchange for this payment, the
Eo

GSO

will- forego seeking forfeiÈure of other GSO facilicy funds
presently under restraint, because of their connecEion to Dreier's
Government

note fraud.

rn conjunction wíth the Coordinatíon Agreement and the GSO
Consent order, certain related applications are also pending before
the Bankruptcy CourÈ. First, the Chapter LL Trustee seeks Bankruptcy
CourÈ approval of the Coordination Agreement. Second, the Chapter 1-lTrustee and Èhe Trustee for Dreier's personal bankruptcy (tne
"Chapter 7 Trust,ee") seek Bankruptcy Court approval of agreements
with GSO whereby GSO will pay $9,250,000 to the Chapter LL Trustee
and $250,000 t,o the Chapter 7 Trustee in exchange for the Trustees'
promise not Eo litigate any claims against GSO and the entry of a Bar
Order enjoíning creditors and other parties in interest from seeking
to recover funds from GSO. Although Ehese applications are before
the Bankruptcy Court, not this Court, the Coordination Agreement
provides that, even if it is approved by this court, it wi1l not take
effect unless the Bankruptcy Court approves the settl-ement between
GSO and the Chapter 11 Trustee
AIso before this CourE are stipulaÈions beLween the
Government and

the Chapter 7 Trustee (tfre ',Chapter 7 Trustee

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St.ipulations" ) regarding the sale of three real properties tist.ed in

the PrelimÍnary Order of Forfeiture (two houses in East Quogue and a
Manhattan condominium) . fn exchang'e for the Chapter 7 TrusLee, s
successful efforts to market and seII these properties, and because
the Government previously agreed to release the personalty in these
properties to the Chapter 7 Trustee, the GovernmenL proposes to
release ten percent of the proceeds from the sal-e of these properties

to t.he Chapter 7 bankruptcy estate.
rina1Iy, before the Court is a proposed stipulation (the
"Fortress Stipulation") between the Government and cert,ain facilities
managed by Fortress Investment Group LLC and its affiliates
("Fortress"). Because the Fort.ress facilities lost over $84 million
from their investments in Dreier's fictitious

notes, Lhe Government
does not intend to seek forfeiture of certaÍn note fraud proceeds
that were received by these facilities; accordingly, the proposed
stipulation would vacate the restraining order that. is currently
freezing those funds.
WhíIe the undersigned has solicited the opinions of

,Judge

Chief Bankruptcy ,fudge Bernstein as t.o their views of
these proposals from the standpoint of securities 1aw and bankruptcy
raw, this court. must address these proposals, fírst and foremosL,
Cedarbaum and

from the st,andpoint of federal criminal 1aw, especially Èhe
provisíons of federal criminal law dealing wíth forfeiture and

rest.itution. Under the rest.itution prov5-sions, victims of crimes
have the right to "fu1l and timely restitution as provided in 1aw. "
l-8 U.S.C. S 377]-(a) (6) . This Court "shall ensure,, that these and

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other victims' rights are vindicated, and t,he Government has the
obligat,ion to "make [its] best, efforts" to this end. Id. S
377t (b) (1) , (c) (r) . Thus, while the related forfeiture provisj.ons
provide only that a defendant sha1l forfeit "to the United States"

the fruits of his crime, 21 U.S.C. S 853(a), including so-ca11ed
"substituLe assets" under certain conditions, id. S 853 (p) , Lhe
Government has represented that, consistent with applicable laws and
regulat.ions, the assets obtained f rom the forfeit.ures in this case
will be applied toward victim restitution, g Gov't Letter, 4/22/09,
aE 10.

In furtherance of these laws, the Court, in the
aforementioned. Preliminary Order of Forfeit,ure, ordered preliminary
forfeiture to the United St,ates of ç746,690,000 in cash held in
accounts controlled by Dreier, as well as preliminary forfeit.ure of
specific propertj-es listed in that order. As part of Dreier's
senEence, he was also ordered to make an addit.ional restitution
pa).ment to his victims in the amount of $387,675,303. A1so, of,
September 29, 2009, the Court entered a Second Amended Restitution
Order specifying that. if restitution is made in partial payments,
t,hosepa)¡mentsaretodistributedtothevictimsona@abasis
according to their loss amounts.
The forfeiture laws furt.her authorize the Government Eo
compromise competing claims Eo forfeiEed

(i)

asseÈs, ZI U.S.C.

S

; accord. In re W.R. Huff Asset Mgrmt. Co. , 4Og F.3d 555, 564
(2d Cir. 2oO5). Many of the objectíons to the settlement agreements

853

(2)

here under considerat,i-on come down to the assertion t,hat

t.he

Case 0:09-cr-60331-JlC Document

not

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its claims to certain artwork and
other property that, in the objectors' view, belong, indirect.ly, to
the victims. Thus, Fortress and certaín other hed.ge funds
(collectively, the "Hedge Funds"), who are by some measures the
Government shoul-d

compromise

largest victims of Dreier's frauds (buE who were also arguably t.he
recipients of fraud proceeds) assert that t.he property to be turned
over to the Chapter 11 Trustee under the Coordination Agreement is
indisputably forfeitable, so its transfer wouLd diminish the pool of
assets available for distribution to the víctims. In response Co the

that the artwork proposed to be turned over to
the Chapter 11 Trustee cannot be traced to the proceeds of Dreier's
frauds, the Hedge Funds cIaím that such properÈy is nevertheless
subject to forfeiture as substitute assets. Furthermore, according
to these victims, the "consideration" flowing to the Government under
the Coordinatíon Agreement the Chapter 11 Trustee's prgmise not to
challenge either the forfeiture of the properties specified in the
Preliminary Order of Forfeiture or the $30.9 million payment under
the GSO Consent Order is iIlusory, as there would be no merit to
GovernmenE's argument

any such challenge.
Although not without some merit, the Hed.ge Funds' argument.s

are ultimately unpersuasive. While the Chapter 11 Trustee's claims

to the forfeíted assets might ultimately prove defective, they are
not so frivolous that their resolution would noE result in
protracLed, costlf, Ínternecine liEigation that would, ât'a minimum,
have the effect of delaying and díminishing the vict.j-ms' recoveries.
For example, it is unclear wheEher the Government,s interest in

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substit.ute assets would relate back to the date of Lhe wrongful acts.
See United Stat.es v. Parrett, 530 F.3d 422, 430 (6th Cir. 2008)

(describing circuit

split on this issue).

Thus, to the extent that

the Government's interest in such property depends on the application
of t.his "relaLion back" doctrine, litigation would be far from
frivolous and it,s outcome uncertain. Concomitantly, the Government's
promise to refrain from seekíng forfeiture of any avoidance
recoveries does not, appear to give up anything of value, as the
Government. has

taken the posj-tion that it is not entitled to pursue

such forfeiture actions, see Transcript, l/L2/I0 .foint Hearing

("Tr.") 35, and the Hedge Funds have noE identified any authority
indicating the conErary. It follows that one effect of t,he agreemenE
is Lo incentivize the Chapter l-1 Trustee to go after recoveries the
Government could not pursue. While any such recoveries will go to
the creditors of the Chapt.er L1 estate, many of these are also
vict.ims of the fraud.
It may also be noted that, the Hedge Funds do noL object to
either the GSO Consent Order or Lhe Fortress Stipulation insofar as
they involve the Government's st,ipulation that, it will not seek
additional forfeiture from these parties. This is, in effecL,
cont.rary to their argument that the Government should seek Eo
maximize the amount. of assets available for distribution to victims
regardless of oLher equitable considerations. It, is hence evÍdent
t.hat the Hedge Funds' objections to the Coord.ination Agreement prove
Loo much, âs they are

unwilling to carry such objections to their

Case 0:09-cr-60331--JlC Document

logical conclusions
interests.

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Entered on FLSD Docket 03/05/201-0 Page

when doing so might, adversely

affect their

I

of 13

own

other objections stated by the Hedge Funds are simitarly
unpersuasive. For example, aÈ the joint. hearing on January 12, 2OLO,
The

counsel for Eton Park CapiÈal Management, L.P., one of the

Hedge

Funds, complained that the proposed set.t.lement, was reached without
adequat.e
When

input from some or all of the

Hedge

Funds. See Tr. 45-46.

pressed, however, counsel was unable to make a specific

application to

apart from reguesting that approval of the
Coordination Agreement be delayed until more ',information" was
Èhe CourÈ

provided regarding how the victims would be treat.ed. Id. .at 46.
Similar process-based objections were advanced by Fortress at the

joint hearing and by the Hedge Funds in written submissions.
Although the Government is obligated to confer with the
víctims before compromising c1aíms, @. 18 U.S.C. S 3771- (a) (a)othing in the fCrime Victims' Rights Act] requires the
Government to seek approval from crime viccims before negotiating or
enterj-ng into a settlement agreement.,' W.R. Huf f Asset Mqmt. Co.,
(5) , " [n]

at 564. The Court accepts the Government's representation,
not directly disputed by the Hedge Funds, that opportuniÈies to
confer were early offered to Èhe Hedge Funds, who failed to take
advantage of t.he offer, Tr. 47. Moreover, as a result of the joint 'i
t
Hedge Funds were aware aE Ieast.
_-".ïT9: -11-.hf l"-.:_"*t, the
"r ""tfy i l
as April 22, 2OO9 that settlement negotiat,ions between the Government
and. the trustees were actively ongoing, and they could Frave sought to
be heard by t.he Government at any time in the process.
409 F.3d

:

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is driven to the conclusion that the real reason
for the Hedge Funds' objections to t,he settlemenL. is their
recognition that, even though they were victims of Dreier's frauds,
they were also the seeming recipients of fraud proceeds, and hence
the bankruptcy creditors (including other victims) may have claims
against t.he Hedge Funds in the form of so-ca11ed avoidance actions
that, as a result of the proposed settlement, the Chapter l-1 Trustee
will be free to pursue without. any fear that any recoveries will
revert to the United States. This is hardly a reason for rejecting
the set.t.Iement. Whatever the merits of the hypothesized avoidance
act.ions, they will only serve to more perfectly resolve the relative
rights of victims and creditors in accordance with the laws of the
The Court

United stat.es.
Thus, despite the foregoing objections, the Court finds that.
t.he Coordination Agreement is reasonable and in the best, interests of

victims coIlectiveIy. As there appears to be no objectj-on before
t.his Court to the cSO Consent Order, which will make $30.9 million
available for vict.ím restitution, t.he Court approves that. agreement
as wel1.1 As to the Chapter 7 Trustee stipulatíons, although the
Hedge Funds object to the pa)¡ment of ten percent of real property
proceeds to the Chapter 7 Trustee, this objection strikes the Court
as yet another manifestation of their concern about funding the
bankrupt.cy trustees' litigation efforts, which the court finds
t.he

1 Insofar as there are objections to the Bar Ord,er,s
preclusion of victim or creditor actions against GSo, see Tr. 11,
such object.ions are to be addressed by the Bankruptcy court in

the f irst inst.ance.

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unpersuasive for the reasons noted above. Because this amount is

fair compensation for the Chapter 7 Trustee,s sale of these
properties and. his enÈitlement to the personalty therein, the Court
approves these stipulat.ions. Fina1ly, as there is no objection to
the Fortress Stipulation, and because the GovernmenL's policy of
eschewÍng forfeíture from \rnet losers" makes sense, the Court
approves that stipulat j-on as weII.
The final matter to be resolved is the motion of an
individual victim, Paul Gardi, to modify the Second Amended
Restitution Order's scheme of pro rata distribution in order to
provide Gardi with special priority.

Gardi alleges that Dreier,

who

Gardi's lawyer, forged Gardi's signature to a settlement
agreement between ,JA¡ÍA (a hedge fund) and a company controlled by
Gardi, and then arranged for JANA to wire the settlement funds, in
the amount of $6.3 million, into a trust account controlled by
Dreier, who then used the funds for himself. Gardi claims that he is
entitled t.o priority over other victims because he is an individual
as opposed to an institutional investor, because the theft of his
settlement funds is different in nature from the note fraud losses
experienced by the Hedge Funds, and because the relative economic
impact of Gardi's losses is more substantial than the impact on
insÈitutional victims
was

Several affected parties have responded by arguing,

amongt

other things, that Gardi's motion to amend the Second Amended
Restitution order is untimely or otherwise procedurally improper;

that Gardi was not the only individual vÍctim
L0

harmed by Dreíer, s

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misappropriation or other misuse of escrowed funds; Èhat Gardi's loss
should not be considered to have been suffered by an individual-,

since the settlement was with his company; that Gardi's financial
sophistication is not unlíke that of an institutional invest,or; t.hat
JANA, rather than Gardi, was the true victim of this particular

fraud; and that there is no principled basis for treating Gardi's
Ioss as different in kind from the losses experienced by Dreier's
other victims. The Government has taken the position that a pro rata
share is appropriate because "no victim Ís any more or less deserving
here of the restitution."
Tr. 16. Finally, in an intermediate
position, the representative of the bankrupÈcy estates of 36Onetworks
(USA) Inc. and its affiliates (tfre "36Onetworks Representative") has
submj-tted. a response id.entifying the 360networks estates as similarly
situated to Gardi in that they were victims of theft by Dreier in his
capacity as their lawyer, a¡ld urgies the Court to distinguísh between

"clienÈ" victims and "note fraud" victims by providing client victims
with priority.

wil-l

that the procedural object.ion
to Gardj-'s submissions would ultimately not prevail and will instead
proceed to the und.erlyíng merits. There is nochj-ng per se unfair
about a pro rata distribution; Èhe Second Circuit has endorsed this
approach as particularly appropriate for frauds like Dreíer's
involving a Ponzi scheme or the comminglíng of similarly situated
victims' assets. see sEC v. credit Bancorp rnc., 2go F.3d Bo, BB-89
(2d Cir. 2002) . It is clear from the responses that Gardj- is not the
only "client" víctim of Dreier's frauds or to whom Dreier owed
The Court

assume arsuendo

11

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fiduciary d.ut.ies, and each case doubtless has its own nuances.
Addit.ionally, the "note fraud" victims are only immediately the

Hedge

Funds; iE is the investors in these funds, including individuals,

charitable and educational institutions,
ult.imate "note f raud" victims.

and many others who are the

The truth is t.hat a f raud as large

and egregious as Drej-er's is lÍke an earthquake that savages its

vj-ctims at random and is followed by a series of aftershocks that
destroyssti11furtherassets.Anya1ternativetothe@
approach would entail a cost.ly and extensive inquiry into the

circumstances of each victim's 1oss, which would likely

devol-ve into

a war of recriminations, to the detriment of all concerned.
Accordingly, the Court denj-es Gardí's motion and confirms the p
rata distribution

scheme

set forth in the Second

Amended Rest.iEution

Order.

For the foregoing reasons, the Court hereby reaffirms its
Memorand.um

of January 29,

Agreement, the

GSO

2OLO and.

approves the Coordínation

Consent Order, the Chapter 7 Trustee St.ipulations,

and the ForEress Stipulation.

The Clerk of t.he Court is directed to

close the entrÍes numbered L02 and 106 on the docket of thÍs case.2
2 Still pending before the Court are Lhree petítions filed
pursuant to 2L U.S.C. S 853(n) for ancillary hearings to
det.ermine third party interesEs in property subject to
forfeiture. Motion practice ís underway with respect to the
GovernmenL's mot,ion to dismiss the petition f iled by t.he
360networks Representative. A1so, the Hedge Funds, in a series
of letters submít.ted to the relevanE Courts and the GovernmenE,
set fort.h several arguments why t.he petiEion filed by Heathfield
Capit.al Limit.ed ("Heathfie1d") should be dismissed. While these
arguments will be consj-dered if and when the Court reaches the
merits of the Heathfield petit.íon, they provide no reason to
defer approval of the sett.lement agreements discussed herein.

l2

Case 0:09-cr-60331--JlC Document

94-1 Entered

SO ORDERED.

Dated: New york, Ny
February 5, 201,0

13

on FLSD Docket 03/05/201-0 Page L3 of 13

_li
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UNITED STATES DTSTRICT COURT
SOUTHERN DISTRTCT OF FLORIDA

Case No, 99-8125-Cr-HURLEY/Johnson (s) (s)

UNITED STATES OF A}4ERTCA

Plaintiff
V.
FREDERICK C. BRANDAU
GARLAND HOGAN/
MARY AI'TNE BILLINGHURST
FINANCIAL FEDERATED TITLE

ÂuG

9 zfigj

CAFLOS
r¡x u.t. ofsT. cT.
JUEHT(¿

& TRUST, INC.,
ASSET SECURITY CORPORATION/
GÄRY J. PIERCE, and
CST AG/ LTD.
RAPIIAEL R. LEVY,
AMER]CAN BENEFTTS SERVTCES/
JEFFREY A. PAINE,
WANDA T]RA,DO,

ALAN RIC}IARD LEWIS/

IVAN

BURGOS,

ZANE BALSAM,
JUAN .ARROYO,
HARVEY BR-ANDAU/ and
CHERYL POINDEXTER,

Defendants.
ORDER APPROVING MEMOR.A,},IDUM AGREEMENT

AND APPOINTTNG RECEIVER

This matter comes before the Court pursuant to the motion

filed by the United States to approve the Memorandum of

Agreement

entered into between the United States and John Rozyak, Esq.,

and

_iI

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appoint John Kozyak as Receiver and as substitute custodian for the
U.S. Marshals Service of the real property in this case.
The Court/ upon consideration of the motion filed by the

United States, finds that to protect the interesLs of the United
States in the forfeited property under the circumstances of this
case, it is necessary and appropriate for the court pursuant to

21

U.S.C. SB53(g) to appoint a Receiver who will maintain, preserve,

and se11 cerLain forfeited assets, and assist in distributing
proceeds to victims in restitution.

Therefore, for qood

cause

shown, it is hereby:
ORDERED AND AD.JUDGED:

States' motj-on is granted.

1.

The United

2.

The Memorandum

of Agreement between the United States and

Esq., is approved and .lohn Rozyak, Esq., is appointed
Receiver in this case and substitute custodian for the U.S.
Marshals Service of the real property which has been forfeited
John Kozyak,

pursuant to the preliminary order of forfeiture dated May 31, 2000.
The following personal property

is excl-uded from the jurisdiction

of the Receiver: conveyances, bank accounts/ currency, negotiable
instruments or the like identified in the First Superseding
Indictment.

a condition of this appointment, the Receiver will
post and maintain throughout the course of the appointment an
3

initial

.

-A,s

performance bond in the amount of $500,000.00. At such

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time as the account or accounts established pursuant to this order
and the order appointing John Kozyak Receiver contain

in

aggregate

shall immediately increase the
bond to equal the amount of money being held in the receiver
more than $500,000.00, the Receiver

accounts.

4.

fn carrying out his responsibilitÍes, the Receiver shall
have the followlng pohrers and duties:
a.

protect the interest
of the United Stat.es in the forfeited real estate listed in the
order of forfeiture.
b.

Manage, maintain, preserve, and

SeI-l-

the forfeited

rea.l-

property consisLent with the

of Agreement upon appropriate motion of the United
States and entry of an order by this Court authorizing any sale.
Any order of sale will reguire that the net proceeds of sale be
Memorandum

deposited in one or more inLerest bearing accounts established by

the Receiver under the jurisdiction of this Court.
The net
proceeds are def ined as the sal-es price l-ess the actual- costs
incurred by the United States and/or the Receiver in the seizure,
storaqe, maintenance, and sal-e of the forfeited asset authorized to
be sol-d.

c.

Prepare and del-iver a monthly written financial

report to A¡tonia J. Barnes, Assistant U.S. Attorney. The report

will be provided to the U.S. Attorneys Office no later than 30 days
after the month that the report covers. The written report will

summarize the tasks performed by the Receiver and the time spent in

performing these tasks. The report also wil-I itemlze with respect

to each asset¡ âDy and alI mortgage pa\rments, rents and other
income col-l-ected pertaining to the forfeited assets, and detail alI
expenses and charges incurred and aging accounts payable, including

supporting documentation for all expenses and charges.

d.

The Receiver shaII have the authority to hire

vendors to perform services and provide products in connection with

the maintenance, preservation, and sale of the forfeited real
estate consistent with the approved budget. The Receiver shalÌ
require al-I vendors/ except vendors providing public utÍJ_ity
services to the properties, Lo execute a non-affiliation affidavit
in the form approved by Antonia J. Barnes, J\ssisLant U.S. Altorney,
as provided for in the Memorandum of Agreement prior to the service
being perf ormed or product being supplied . lrlhere the Uni ted
States, througrh its representative Antonia J. Barnes,, Assistant
U.S. Attorney and the Receiver cannot agree on a vendor or a cost
or

is not within the amounts permitted by
the approved budget or which is not for an item inc-l-uded in the
expense proposal, which

approved budget, the Receiver

shall

make

application to the

Court

for approval of the vendor or the amount and/or type of cost or
expense at issue.
4. Even though the Receiver wiII be responsible for the
maintenance, preservatlon and saÌe of only the forfeited real

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property, this wil-l- not preclude using the services of the Receiver
to effectuate the distribution of restitutíon payments from the
proceeds of both the real- and personal property forfeited in this
case,

5.

The proposed budget

6.

No funds sharr be spent except

is

approved.

as (1) approved under the
budget adopted as part of this order, or (z) agrreed to in writing
between Antonia J. Barnes, Assistant u.s. Attorney, and the
t QT (3) , in the event the United States and the Receiver
cannot reach agreement, as approved by t.his Court.
1.
[¡ùhere the United States, through its repr'esentative
Antonia J. Barnes, Assistant U.S. Attorney/ and the Receiver cannot
agree to (1) reimbursement of maintenance expenses, which are
Receiver

defined in the United States'motion to include utilities and
j-nsurance premiums, for which monies were expended prior to the
approval of the budget by this Court or (Z) pa¡rment f or legal
services rendered by Kozyak Tropin

&

Throckmorton, p.4., related to

the forfeited assets, then the Receiver shaII file any application
of the disputed items for approval with this court prior to any

final distribution of the proceeds from the sale of the forfeited
assets.

8.

The Receiver may seek and may be paid compensation for

aII duties performed and services rendered related to real property
and personal-

property covered by the
5

Memorandum

of

Agreement and to

@ae€09s-ut8035JÀilKH DDoornreBhg4€9 EEüÉsdóo1FEES[DDobkþ08&5i?øooo pHgg6ôb66

the distribution of the proceeds of the real- property and personal-

property for restitution, in an amount not to exceed 3e" of the net
proceeds from the sale of the real property. The application will
follow the Guidelines for Fees and Disbursements for Professionals

in the Southern District of Florida in Bankruptcy Cases.

Any

dispute regarding the amount of the fee payable to the Receiver
shall- be presented to the United States Distrlct Court for

resoiution through application for the payment of the fee by the
Receiver. The Receiver will be entitled to appfy for his
compensation (1) upon the resolut.ion of aII third party claims to
the real- property with respect to which the Receiver is authorized
to act in this matter and (2) at the time that the proceeds from

the sale of the forfeited property are ready for distribution.
9. The Receiver shal-l fil-e any applications for approval
with this Court and the United States shall file any responses or
objections to the Receiver's application in accordance with
FIa. L,R. 1"1.
DONE ÀND ORDERED

County, Fl-orida, this

in

Chambers

in West Palm Beach,

S/¿- day of

DANIEL T.K. H
UNITED STATES

cc: Antonia J. Barnes, AUSA
Stephen Carlton, AUSA
Ellen Cohen, AUSA

,

ISTRICT

S.D.

PaIm Beach
2000.

.]UDGE