United States Securities and Exchange Commission v. Kandalepas

Filing 45

MOTION by Plaintiff United States Securities and Exchange Commission for judgment Setting Amount of Disgorgement and Civil Penalties (Hutton, Doressia)

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
_________________________________________
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UNITED STATES SECURITIES
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AND EXCHANGE COMMISSION,
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Case No: 1:18-cv-02637
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Plaintiff,
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Judge: Ronald A. Guzman
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v.
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ANDREW J. KANDALEPAS,
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Defendant.
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__________________________________________ )
MOTION FOR JUDGMENT SETTING AMOUNT
OF DISGORGEMENT AND CIVIL PENALTIES
AGAINST DEFENDANT
Plaintiff U. S. Securities and Exchange Commission (“SEC” or “Plaintiff”), pursuant to
the Consent filed on September 18, 2018 (Dkt. 27-2) and the Judgment as to Defendant Andrew
J. Kandalepas (“Kandalepas” or “Defendant”) entered on September 25, 2018 (Dkt. 31),
respectfully moves this Court for final judgment setting the amount of disgorgement,
prejudgment interest thereon, and civil penalties to be paid by Kandalepas.
In the Consent (Dkt. 27-2):
Defendant agree[d] that the Court shall order disgorgement of ill-gotten gains,
prejudgment interest thereon, and a civil penalty pursuant to Section 20(d) of
the Securities Act [15 U.S.C. § 77t(d)] and Section 21(d)(3) of the Exchange Act
[15 U.S.C. § 78u(d)(3)]. Defendant further agree[d] that the amounts of the
disgorgement and civil penalty shall be determined by the Court upon motion of
the Commission, and that prejudgment interest shall be calculated from
September 30, 2013, based on the rate of interest used by the Internal Revenue
Service for the underpayment of federal income tax as set forth in 26 U.S.C.
§ 6621(a)(2). Defendant further agree[d] that in connection with the
Commission’s motion for disgorgement and/or civil penalties, and at any hearing
held on such a motion: (a) Defendant will be precluded from arguing that he did
not violate the federal securities laws as alleged in the Complaint; (b) Defendant
may not challenge the validity of this Consent or the Judgment; (c) solely for the

purposes of such motion, the allegations of the Complaint shall be accepted
as and deemed true by the Court; and (d) the Court may determine the issues
raised in the motion on the basis of affidavits, declarations, excerpts of sworn
deposition or investigative testimony, and documentary evidence, without regard
to the standards for summary judgment contained in Rule 56(c) of the Federal
Rules of Civil Procedure.
(Dkt. 27-2 at ¶ 5 (emphasis added)):
Based on the allegations of fraud contained in the Complaint (Dkt. 1), which
Kandalepas agreed to accept as true for the purposes of this motion, and for the reasons stated
in the SEC’s accompanying memorandum and the Declaration of Craig L. McShane, the
Court should:
1. Order Kandalepas to pay $593,363.25 in disgorgement, representing the illgotten proceeds of his fraud, plus prejudgment interest thereon of $113,554.63;
2. Order Kandalepas to pay civil penalties; and
3. Enter final judgment against Kandalepas.

April 12, 2019

Respectfully submitted,
UNITED STATES SECURITIES
AND EXCHANGE COMMISSION
By: /s/ Doressia L. Hutton
Doressia L. Hutton ([e-mail])
John E. Birkenheier ([e-mail])
Michelle Muñoz Durk ([e-mail])
Kevin A. Wisniewski ([e-mail])
175 West Jackson Boulevard, Suite 1450
Chicago, IL 60604-2615
[phone]; [phone] (fax)

CERTIFICATE OF SERVICE
I hereby certify that on April 12, 2019, I served MOTION FOR JUDGMENT SETTING
AMOUNT OF DISGORGEMENT AND CIVIL PENALTIES AGAINST DEFENDANT on
all counsel of record through the Court’s ECF filing system and on Defendant Andrew J.
Kandalepas via email at [e-mail] and via overnight delivery at 1527
Lexington Court, Schaumburg, IL 60163.
By: /s/ Doressia L. Hutton
Doressia L. Hutton