Securities and Exchange Commission v. Francisco et al

Filing 2

ORDER - Preliminary Injunction Against All Defendants re 1 Complaint for Receivership. (NOS)

C se 8:16-cv-02257-CJC-DFM Document 36 Filed 01/23/17 Page 1of26 Page ID #:3017

RECEIVED

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FEB f 7 2017

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C.lerk us
D1~trict o'r M
Courts
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M1ssou/a 0 . ~t~na
1v1s1on

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UNITED STATES DISTRICT COURT

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CENTRAL DISTRICT OF CALIFORNIA

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SOUTHERN DIVISION

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Case No.: SACV 16-02257-CJC(DFMx)
SECURITIES AND EXCHANGE
COMMISSION,

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PRELIMINARY INJUNCTION
AGAINST ALL DEFENDANTS

Plaintiff,
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v.

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EMILIO FRANCISCO; PDC CAPITAL
GROUP, LLC; CAFFE PRIMO
INTERNATIONAL, INC.; SAL
ASSISTED LIVING, LP; , SAL
CARMICHAEL, LP; SAL CITRUS
HEIGHTS, LP; SAL KERN CANYON,
LP; SAL PHOENIX, LP; SAL
WESTGATE, LP; SUMMERPLACE
AT SARASOTA, LP; SUMMERPLACE
AT CLEARWATER, LP;
SUMMERPLACE AT CORRELL
PALMS, LP; TRC TUCSON, LP;
CLEAR CURRENTS WEST, LP;
CAFFE PRIMO MANAGEMENT, LP;
CAFFE PRIMO MANAGEMENT 102,
LP; CAFFE PRIMO MANAGEMENT
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103, LP; CAFFE PRIMO
MANAGEMENT 104, LP; CAFFE
PRIMO MANAGEMENT 105, LP;
CAFFE PRIMO MANAGEMENT 106,
LP; CAFFE PRIMO MANAGEMENT
107, LP; and CAFFE PRIMO
MANAGEMENT 108, LP,

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Defendants.

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This matter is now before the Court on its Order to Show Cause Regarding

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Issuance of a Preliminary Injunction and Appointment of a Permanent Receiver (Dkt. No.

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17) issued January 5, 2017, in response to the Application by Plaintiff Securities and

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Exchange Commission ("SEC") for a Temporary Restraining Order and related orders,

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including an order to Show Cause Re Preliminary Injunction and Appointment of a

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Permanent Receiver (the "TRO Application").

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The Court, having considered the SEC's Complaint, the TRO Application, the

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supporting Memorandum of Points and Authorities, the supporting declarations and

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exhibits, filings in opposition, and the other evidence and argument presented to the

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Court, finds that:

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A.

This Court has jurisdiction over the parties to, and the subject matter of, this
action.

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B.

The SEC has made a sufficient and proper showing in support of the relief

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granted herein, as required by Section 20(b) of the Securities Act of 1933

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("Securities Act") (15 U.S.C. § 77t(b)) and Section 2l(d) of the Securities

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Exchange Act of 1934 ("Exchange Act") (15 U.S.C. § 78u(b)) by evidence
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establishing a prima facie case and reasonable likelihood that:
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1. Emilio Francisco; PDC Capital Group, LLC; SAL Assisted Living, LP;

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SAL Carmichael, LP; SAL Citrus Heights, LP; SAL Kern Canyon, LP;

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SAL Phoenix, LP; SAL Westgate, LP; Summerplace as Sarasota, LP;

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Summerplace at Clearwater, LP; Summerplace at Correll Palms, LP;

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TRC Tucson, LP; Clear Currents West, LP; Caffe Primo Management,

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LP; Caffe Primo Management 102, LP; Caffe Primo Management 103,

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LP; Caffe Primo Management 104, LP; Caffe Primo Management 105,

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LP; Caffe Primo Management 106, LP; Caffe Primo Management 107,

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LP; Caffe Primo Management 108, LP have engaged in, are engaging in,

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are about to engage in, and will continue to engage in unless restrained

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transactions, acts, practices and courses of business that constitute

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violations of Section 17(a) of the Securities Act, 15 U.S.C. § 77q(a); and

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Section lO(b) of the Securities Exchange Act, 15 U.S.C. § 78j(b), and

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Rule lOb-5 thereunder, 17 C.F.R. § 240.lOb-5;

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2. Caffe Primo International, Inc. has engaged in, is engaging in, is about to

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engage in, and will continue to engage in unless restrained transactions,

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acts, practices and courses of business that constitute violations of

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Section 17(a) of the Securities Act (15 U.S.C. § 77q(a)); and Section

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lO(b) of the Securities Exchange Act of 1934 (15 U.S.C. § 78j(b)) and

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Rules 10b-5(a) and (c) thereunder (17 C.F.R. § 240.10b-5(a) and (c));

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3. Emilio Francisco and PDC Capital, LLC, knowingly or recklessly, have

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provided, are providing, are about to provide, and will continue to

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provide substantial assistance to violations of Section 1O(b) of the

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Securities Exchange Act, 15 U.S.C. § 78j(b ), and Rule 1Ob-5(b)
thereunder, 17 C.F.R. § 240.10b-5(b); and

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4. Emilio Francisco is a control person of Defendants PDC Capital Group,

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LLC; Caffe Primo International, Inc.; SAL Assisted Living, LP; SAL

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Carmichael, LP; SAL Citrus Heights, LP; SAL Kern Canyon, LP; SAL

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Phoenix, LP; SAL Westgate, LP; Summerplace as Sarasota, LP;

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Summerplace at Clearwater, LP; Summerplace at Correll Palms, LP;

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TRC Tucson, LP; Clear Currents West, LP; Caffe Primo Management,

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LP; Caffe Primo Management 102, LP; Caffe Primo Management 103,

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LP; Caffe Primo Management 104, LP; Caffe Primo Management 105,

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LP; Caffe Primo Management 106, LP; Caffe Primo Management 107,

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LP; Caffe Primo Management 108, LP.\

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c.

Good cause exists to warrant the appointment of a permanent receiver over

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Defendants PDC Capital Group, LLC; Caffe Primo International, Inc.; SAL

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Assisted Living, LP; SAL Carmichael, LP; SAL Citrus Heights, LP; SAL

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Kern Canyon, LP; SAL Phoenix, LP; SAL Westgate, LP; Summerplace as

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Sarasota, LP; Summerplace at Clearwater, LP; Summerplace at Correll

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Palms, LP; TRC Tucson, LP; Clear Currents West, LP; Caffe Primo

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Management, LP; Caffe Primo Management 102, LP; Caffe Primo

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Management 103, LP; Caffe Primo Management 104, LP; Caffe Primo

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Management 105, LP; Caffe Primo Management 106, LP; Caffe Primo

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Management 107, LP; Caffe Primo Management 108, LP and their

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subsidiaries and affiliates including but not limited to Summerplace

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Management, LLC, PDC Partners Management, Inc.; and FDC Partners

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Management, Inc.

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D.

Good cause exists to believe that, unless restrained and enjoined by order of

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this Court, Defendants Emilio Francisco; PDC Capital Group, LLC; Caffe

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Primo International, Inc.; SAL Assisted Living, LP; SAL Carmichael, LP;

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SAL Citrus Heights, LP; SAL Kern Canyon, LP; SAL Phoenix, LP; SAL

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Westgate, LP; Summerplace as Sarasota, LP; Summerplace at Clearwater,

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LP; Summerplace at Correll Palms, LP; TRC Tucson, LP; Clear Currents

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West, LP; Caffe Primo Management, LP; Caffe Primo Management 102,

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LP; Caffe Primo Management 103, LP; Caffe Primo Management 104, LP;

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Caffe Primo Management 105, LP; Caffe Primo Management 106, LP;

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Caffe Primo Management 107, LP; Caffe Primo Management 108, LP will

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dissipate, conceal, or transfer assets which could. be the subject to an order

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directing disgorgement or the payment of civil money penalties in this

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action. It is appropriate for the Court to issue this Preliminary Injunction

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and asset freeze to preserve and protect existing assets, and prevent the

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dissipation of assets.

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E.

Good cause exists to believe that, unless restrained and enjoined by order of

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this Court, Defendants may alter or destroy documents relevant to this

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action.

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I.

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IT IS HEREBY ORDERED that a Preliminary Injunction should issue, an asset

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freeze should be imposed, and a permanent receiver be appointed over the entity

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defendants.

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II.

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IT IS FURTHER ORDERED that Defendants Emilio Francisco; PDC Capital

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Group, LLC; Caffe Primo International, Inc.; SAL Assisted Living, LP; SAL Carmichael,
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LP; SAL Citrus Heights, LP; SAL Kern Canyon, LP; SAL Phoenix, LP; SAL Westgate,
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LP; Summerplace as Sarasota, LP; Summerplace at Clearwater, LP; Summerplace at

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Correll Palms, LP; TRC Tucson, LP; Clear Currents West, LP; Caffe Primo

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Management, LP; Caffe Primo Management 102, LP; Caffe Primo Management 103, LP;

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Caffe Primo Management 104, LP; Caffe Primo Management 105, LP; Caffe Primo

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Management 106, LP; Caffe Primo Management 107, LP; Caffe Primo Management 108,

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LP, and their officers, agents, servants, employees, attorneys, subsidiaries and affiliates,

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and those persons in active concert or participation with any of them, who receive actual

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notice of this Order, by personal service or otherwise, and each of them, be and hereby

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are preliminarily enjoined from, directly or indirectly, in the offer or sale of any

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securities, by the use of any means or instruments of transportation or communication in

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interstate commerce or by the use of the mails:

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A. employing any device, scheme or artifice to defraud;

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B. obtaining money or property by means of any untrue statement of a material

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fact or any omission to state a material fact necessary in order to make the

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statements made, in light of the circumstances under which they were made,

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not misleading; or

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C. engaging in any transaction, practice, or course of business which operates
or would operate as a fraud or deceit upon the purchaser;

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in violation of Section 17(a) of the Securities Act, 15 U.S.C. § 77q(a).

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III.
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IT IS FURTHER ORDERED that Defendants Emilio Francisco; PDC Capital
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Group, LLC; Caffe Primo International, Inc.; SAL Assisted Living, LP; SAL Carmichael,
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LP; SAL Citrus Heights, LP; SAL Kern Canyon, LP; SAL Phoenix, LP; SAL Westgate,
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LP; Summerplace as Sarasota, LP; Summerplace at Clearwater, LP; Summerplace at

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Correll Palms, LP; TRC Tucson, LP; Clear Currents West, LP; Caffe Primo

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Management, LP; Caffe Primo Management 102, LP; Caffe Primo Management 103, LP;

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Caffe Primo Management 104, LP; Caffe Primo Management 105, LP; Caffe Primo

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Management 106, LP; Caffe Primo Management 107, LP; Caffe Primo Management 108,

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LP, and their officers, agents, servants, employees, attorneys, subsidiaries and affiliates,

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and those persons in active concert or participation with any of them, who receive actual

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notice of this Order, by personal service or otherwise, and each of them, be and hereby

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are preliminarily enjoined from, directly or indirectly, in connection with the purchase or

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sale of any security, by the use of any means or instrumentality of interstate commerce,

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or of the mails, or of any facility of any national securities exchange:

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A. employing any device, scheme or artifice to defraud;

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B. making any untrue statement of a material fact or omitting to state a material

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fact necessary in order to make the statements made, in the light of the

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circumstances under which they were made, not misleading; or

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C. engaging in any act, practice, or course of business which operates or would
operate as a fraud or deceit upon any person;

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in violation of Section lO(b) of the Exchange Act, 15 U.S.C. § 78j(b), and Rule lOb-5

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thereunder, 17 C.F.R. § 240.lOb-5.

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IV.
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IT IS FURTHER ORDERED that Defendants Emilio Francisco and PDC Capital
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Group, and their officers, agents, servants, employees, attorneys, subsidiaries and
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affiliates, and those persons in active concert or participation with any of them, who
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receive actual notice of this Order, by personal service or otherwise, and each of them, be

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and hereby are preliminarily enjoined from aiding and abetting any violations of Section

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1O(b) of the Exchange Act, 15 U.S.C. § 78j(b ), and Rule 1Ob-5 thereunder, 17 C.F .R. §

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240.1 Ob-5, by knowingly or recklessly providing substantial assistance to any person

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who, directly or indirectly, in connection with the purchase or sale of any security, by the

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use of any means or instrumentality of interstate commerce, or of the mails, or of any

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facility of any national securities exchange:

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A. employing any device, scheme or artifice to defraud;

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B. making any untrue statement of a material fact or omitting to state a material

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fact necessary in order to make the statements made, in the light of the

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circumstances under which they were made, not misleading; or

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C. engaging in any act, practice, or course of business which operates or would
operate as a fraud or deceit upon any person.

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v.

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IT IS FURTHER ORDERED that Defendants Emilio Francisco; PDC Capital

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Group, LLC; Caffe Primo International, Inc.; SAL Assisted Living, LP; SAL Carmichael,

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LP; SAL Citrus Heights, LP; SAL Kern Canyon, LP; SAL Phoenix, LP; SAL Westgate,

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LP; Summerplace as Sarasota, LP; Summerplace at Clearwater, LP; Summerplace at

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Correll Palms, LP; TRC Tucson, LP; Clear Currents West, LP; Caffe Primo

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Management, LP; Caffe Primo Management 102, LP; Caffe Primo Management 103, LP;

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Caffe Primo Management 104, LP; Caffe Primo Management 105, LP; Caffe Primo

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Management 106, LP; Caffe Primo Management 107, LP; Caffe Primo Management 108,

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LP, and their officers, agents, servants, employees, attorneys, subsidiaries and affiliates,
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and those persons in active concert or participation with any of them, who receive actual
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notice of this Order, by personal service or otherwise, and each of them, be and hereby

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are preliminarily enjoined from, directly or indirectly, participating in the offer or sale of

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any security which constitutes an investment in a "commercial enterprise" under the

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United States Government EB-5 visa program administered by the United States

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Citizenship and Immigration Service ("USCIS"), including engaging in activities with a

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broker, dealer, or issuer, or a Regional Center designated by the USCIS, for purposes of

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issuing, offering, trading, or inducing or attempting to induce the purchase or sale of any

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such EB-5 investment.

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VI.

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IT IS FURTHER ORDERED that, except as otherwise ordered by this Court,

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Defendants Emilio Francisco; PDC Capital Group, LLC; Caffe Primo International, Inc.;

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SAL Assisted Living, LP; SAL Carmichael, LP; SAL Citrus Heights, LP; SAL Kern

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Canyon, LP; SAL Phoenix, LP; SAL Westgate, LP; Summerplace as Sarasota, LP;

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Summerplace at Clearwater, LP; Summerplace at Correll Palms, LP; TRC Tucson, LP;

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Clear Currents West, LP; Caffe Primo Management, LP; Caffe Primo Management 102,

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LP; Caffe Primo Management 103, LP; Caffe Primo Management 104, LP; Caffe Primo

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Management 105, LP; Caffe Primo Management 106, LP; Caffe Primo Management 107,

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LP; Caffe Primo Management 108, LP, and their officers, agents, servants, employees,

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attorneys, subsidiaries and affiliate, and those persons in active concert with them, who

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receive actual notice of this Order, by personal service or otherwise, and each of them, be

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and hereby are preliminarily enjoined from, directly or indirectly, transferring, assigning,

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selling, hypothecating, changing, wasting, dissipating, converting, concealing,

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encumbering, or otherwise disposing of, in any manner, any funds, assets, securities,

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claims or other real or personal property, including any notes or deeds of trust or other

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interest in real property, wherever located, of any one of the Defendants, or their

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subsidiaries or affiliates, owned by, controlled by, managed by or in the possession or
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8:16-cv-02257-CJC-DFM Document 36 Filed 01/23/17 Page 10 of 26 Page ID #:3026

custody of any of them and from transferring, encumbering dissipating, incurring charges
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or cash advances on any debit or credit card of the credit arrangement of any one of the

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Defendants, or their subsidiaries and affiliates.

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\TII.

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IT IS FURTHER ORDERED that, except as otherwise ordered by this Court, the

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freeze previously ordered in the TRO shall continue and shall be placed on all monies

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and assets (with an allowance for necessary and reasonable living expenses to be granted

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only upon good cause shown by application to the Court with notice to and an

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opportunity for the SEC to be heard) in all accounts at any bank, financial institution or

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brokerage firm, or third-payment payment processor, all certificates of deposit, and other

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funds or assets, held in the name of, for the benefit of, or over. which account authority is

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held by Defendants, including but not limited to the accounts listed below:

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BANK NAME

ACCOUNT NAME

ACCOUNT NO.

Wells Fargo

PDC Capital Group, LLC

9230366966

Wells Fargo

PDC Capital, Inc.

2682210253

Wells Fargo

PDC Capital, Inc.

2682210261

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California United Bank PDC Capital Group LLC

1194433634

Bank of America

PDC Capital Group LLC

3250 3761 1008

Bank of America

Peter Van Schultze Sole Prop dba

XXXX XXXX 9417

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PDC Capital

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Bank of America

Emilio N. Francisco & Associates 0011 0127 1806
LLC
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c c se 8:16-cv-02257-CJC-DFM Document 36 Filed 01123/17 Page 11of26 Page ID #:3027

BANK NAME

ACCOUNT NAME

ACCOUNT NO.

Bank of America

SAL Assisted Living LP

3250 0854 994 7

Bank of America

Summerplace at Lincoln LLC

3250 0854 9921

Bank of America

SAL Citrus Heights LP

3250 3112 5927

Bank of America

SAL Citrus Heights, LLC

3250 3112 5930

Bank of America

SAL Kern Canyon LP

3250 3112 5765

Bank of America

SAL Kern Canyon, LLC

3250 3112 5778

Bank of America

SAL Westgate, LP

3250 3112 5781

Bank of America

SAL Westgate, LLC

3250 3112 5794

Bank of America

Summerplace at Clearwater LP

3250 5947 5361

Bank of America

Summerplace at Clearwater LLC

3250 5940 8299

Bank of America

Clear Currents West LP

3250 3020 9815

Bank of America

Clear Currents Wests LLC

3250 3020 9828

Bank of America

TRC Tucson LP

3250 4843 8348

Bank of America

Summerplace Development LLC

3250 3761 0863

Bank of America

SAL Phoenix LP

3250 4192 5395

Bank of America

SAL Carmichael LP

3250 6144 4319

Bank of America

SAL Carmichael LLC

3250 9144 4335

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Document 36 Filed 01/23/17 Page 12 of 26 Page ID #:3028

ACCOUNT NO.

BANK NAME

ACCOUNT NAME

Bank of America

Summerplace at Correll Palms LP 3250 4837 8945

Bank of America

Summerplace at Correll Palms

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4

5

3250 4837 8806

LLC

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Summerplace at Sarasota LP

3506 6698 7004

Bank of America

Summerplace at Sarasota, LLC

3250 6698 7088

Bank of America

Caffe Primo Management LP

3250 0855 0952

Bank of America

Caffe Primo 102 LP

3250 3020 9543

Bank of America

Caffe Primo Management 103 LP

3250 3514 2171

Bank of America

Caffe Primo Management 104 LP

3250 3514 2155

Bank of America

Caffe Primo Management 105 LP

3250 3514 2168

Caffe Primo Management 106 LP

3250 3761 1273

Bank of America

Caffe Primo Management 107 LP

3250 3514 2142

Bank of America

Caffe Primo Management 108 LP

3250 4325 6994

Bank of America

Caffe Primo Management 109 LP

3250 4325 7922

Bank of America

Caffe Primo Management 110 LP

3250 4325 8730

JPMorgan Chase

Caffe Primo International Inc.

0000000000081876732

JPMorgan Chase

8

Bank of America

Bank of America

7

Caffe Primo International Inc.

0000000000030911101

JPMorgan Chase

Caffe Primo 101, LLC

00000000000252162095

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Document 36 Filed 01/23/17 Page 13 of 26 Page ID #:3029

BANK NAME

ACCOUNT NAME

ACCOUNT NO.

JPMorgan Chase

Caffe Primo 101, LLC

00000000002972536727

JPMorgan Chase

Caffe Primo 102, LLC

00000000000510087211

JPMorgan Chase

Caffe Primo 102, LLC

00000000002981125972

JPMorgan Chase

Caffe Primo 103, LLC

00000000000568775311

JPMorgan Chase

Caffe Primo 103, LLC

00000000003075710359

JPMorgan Chase

Caffe Primo 104, LLC

00000000000568602291

JPMorgan Chase

Caffe Primo 104, LLC

00000000003075617273

JPMorgan Chase

Caffe Primo 105, LLC

00000000000577317220

JPMorgan Chase

Caffe Primo 105, LLC

00000000003082933796

JPMorgan Chase

Caffe Primo 106, LLC

00000000000596335153

JPMorgan Chase

Caffe Primo 106, LLC

00000000003092716165

JPMorgan Chase

Caffe Primo 107, LLC

00000000000577322758

JPMorgan Chase

Caffe Primo 107, LLC

00000000003082938100

JPMorgan Chase

Caffe Primo 108, LLC

00000000000613027783

JPMorgan Chase

Caffe Primo 108, LLC

00000000003300977369

JPMorgan Chase

Caffe Primo 110, LLC

00000000000607812133

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Any bank, financial institution or brokerage firm, or third-party payment processor
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holding such monies and assets described above shall hold and retain within their control
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and prohibit the withdrawal, removal, transfer or other disposal of any such funds or

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other assets except as otherwise ordered by this Court.

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5
6

VIII.
IT IS FURTHER ORDERED that, except as otherwise ordered by this Court, each

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of the Defendants Emilio Francisco; PDC Capital Group, LLC; Caffe Primo

8

International, Inc.; SAL Assisted Living, LP; SAL Carmichael, LP; SAL Citrus Heights,

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LP; SAL Kern Canyon, LP; SAL Phoenix, LP; SAL Westgate, LP; Summerplace as

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Sarasota, LP; Summerplace at Clearwater, LP; Summerplace at Correll Palms, LP; TRC

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Tucson, LP; Clear Currents West, LP; Caffe Primo Management, LP; Caffe Primo

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Management 102, LP; Caffe Primo Management 103, LP; Caffe Primo Management 104,

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LP; Caffe Primo Management 105, LP; Caffe Primo Management 106, LP; Caffe Primo

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Management 107, LP; Caffe Primo Management 108, LP, and their officers, agents,

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servants, employees, attorneys, subsidiaries and affiliates, and those persons in active

16

concert or participation with any of them, who receive actual notice of this Order, by

17

personal service or otherwise, and each of them, be and hereby are preliminarily enjoined

18

from, directly or indirectly: destroying, mutilating, concealing, transferring, altering, or

19

otherwise disposing of, in any manner, any documents, which includes all books, records,

20

computer programs, computer files, computer printouts, contracts, emails,

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correspondence, memoranda, brochures, or any other documents of any kind in their

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possession, custody or control, however created, produced, or stored (manually,

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mechanically, electronically, or otherwise), pertaining in any manner to Defendants

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Emilio Francisco; PDC Capital Group, LLC; Caffe Primo International, Inc.; SAL

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Assisted Living, LP; SAL Carmichael, LP; SAL Citrus Heights, LP; SAL Kern Canyon,

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LP; SAL Phoenix, LP; SAL Westgate, LP; Summerplace as Sarasota, LP; Summerplace

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at Clearwater, LP; Summerplace at Correll Palms, LP; TRC Tucson, LP; Clear Currents

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West, LP; Caffe Primo Management, LP; Caffe Primo Management 102, LP; Caffe
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Primo Management 103, LP; Caffe Primo Management 104, LP; Caffe Primo
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Management 105, LP; Caffe Primo Management 106, LP; Caffe Primo Management 107,

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LP; Caffe Primo Management 108, LP.

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5
6

IX.
IT IS FURTHER ORDERED that Mr. Thomas Seaman is appointed as permanent

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receiver of Defendants PDC Capital Group, LLC; Caffe Primo International, Inc.; SAL

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Assisted Living, LP; SAL Carmichael, LP; SAL Citrus Heights, LP; SAL Kern Canyon,

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LP; SAL Phoenix, LP; SAL Westgate, LP; Summerplace as Sarasota, LP; Summerplace

10

at Clearwater, LP; Summerplace at Correll Palms, LP; TRC Tucson, LP; Clear Currents

11

West, LP; Caffe Primo Management, LP; Caffe Primo Management 102, LP; Caffe

12

Primo Management 103, LP; Caffe Primo Management 104, LP; Caffe Primo

13

Management 105, LP; Caffe Primo Management 106, LP; Caffe Primo Management 107,

14

LP; Caffe Primo Management 108, LP, and their subsidiaries and affiliates including but

15

not limited to Summerplace Management, LLC, PDC Partners Management, Inc.; and

16

FDC Partners Management, Inc., with full powers of an equity receiver, including, but

17

not limited to, full power over all funds, assets, collateral, premises (whether owned,

18

leased, occupied, or otherwise controlled), choses in action, books, records, papers and

19

other property belonging to, being managed by or in the possession of or control of

20

Defendants PDC Capital Group, LLC; Caffe Primo International, Inc.; SAL Assisted

21

Living, LP; SAL Carmichael, LP; SAL Citrus Heights, LP; SAL Kern Canyon, LP; SAL

22

Phoenix, LP; SAL Westgate, LP; Summerplace as Sarasota, LP; Summerplace at

23

Clearwater, LP; Summerplace at Correll Palms, LP; TRC Tucson, LP; Clear Currents

24

West, LP; Caffe Primo Management, LP; Caffe Primo Management 102, LP; Caffe

25

Primo Management 103, LP; Caffe Primo Management 104, LP; Caffe Primo

26

Management 105, LP; Caffe Primo Management 106, LP; Caffe Primo Management 107,

21

LP; Caffe Primo Management 108, LP and their subsidiaries and affiliates including but

28

not limited to Summerplace Management, LLC, PDC Partners Management, Inc.; and
-15-

C

e 8:16-cv-02257-CJC-DFM Document 36 Filed 01123/17 Page 16 of 26 Page ID #:3032

FDC Partners Management, Inc., and that such receiver is immediately authorized,
2

empowered and directed:

3
4

A.

to have access to and to collect and take custody, control, possession, and

5

charge of all funds, assets, collateral, premises (whether owned, leased,

6

pledged as collateral, occupied, or otherwise controlled), choses in action,

7

books, records, papers and other real or personal property, wherever located,

8

of or managed by Defendants PDC Capital Group, LLC; Caffe Primo

9

International, Inc.; SAL Assisted Living, LP; SAL Carmichael, LP; SAL

10

Citrus Heights, LP; SAL Kern Canyon, LP; SAL Phoenix, LP; SAL

11

Westgate, LP; Summerplace as Sarasota, LP; Summerplace at Clearwater,

12

LP; Summerplace at Correll Palms, LP; TRC

13

West, LP; Caffe Primo Management, LP; Caffe Primo Management 102,

14

LP; Caffe Primo Management 103, LP; Caffe Primo Management 104, LP;

15

Caffe Primo Management 105, LP; Caffe Primo Management 106, LP;

16

Caffe Primo Management 107, LP; Caffe Primo Management 108, LP and

17

their subsidiaries and affiliates including but not limited to Summerplace

18

Management, LLC, PDC Partners Management, Inc.; and FDC Partners

19

Management, Inc. (collectively, the "Assets"), with full power to sue,

20

foreclose, marshal, collect, receive, and take into possession all such Assets

21

(including access to and taking custody, control, and possession of all such

22

Assets);

Tucs~n,

LP; Clear Currents

23

24

B.

to assume full control of Defendants PDC Capital Group, LLC; Caffe Primo

25

International, Inc.; SAL Assisted Living, LP; SAL Carmichael, LP; SAL

26

Citrus Heights, LP; SAL Kern Canyon, LP; SAL Phoenix, LP; SAL

27

Westgate, LP; Summerplace as Sarasota, LP; Summerplace at Clearwater,

28

LP; Summerplace at Correll Palms, LP; TRC Tucson, LP; Clear Currents
-16-

C

e 8:16-cv-02257-CJC-DFM Document 36 Filed 01/23/17 Page 17 of 26 Page ID #:3033

West, LP; Caffe Primo Management, LP; Caffe Primo Management 102,
2

LP; Caffe Primo Management 103, LP; Caffe Primo Management 104, LP;

3

Caffe Primo Management 105, LP; Caffe Primo Management 106, LP;

4

Caffe Primo Management 107, LP; Caffe Primo Management 108, LP and

5

their subsidiaries and affiliates including but not limited to Summerplace

6

Management, LLC, PDC Partners Management, Inc.; and FDC Partners

7

Management, Inc. by removing, as the receiver deems necessary or

8

advisable, any director, officer, attorney, independent contractor, employee,

9

or agent of any of Defendants PDC Capital Group, LLC; Caffe Primo

10

International, Inc.; SAL Assisted Living, LP; SAL Carmichael, LP; SAL

11

Citrus Heights, LP; SAL Kern Canyon, LP; SAL Phoenix, LP; SAL

12

Westgate, LP; Summerplace as Sarasota, LP; Summerplace at Clearwater,

13

LP; Summerplace at Correll Palms, LP; TRC Tucson, LP; Clear Currents

14

West, LP; Caffe Primo Management, LP; Caffe Primo Management 102,

15

LP; Caffe Primo Management 103, LP; Caffe Primo Management 104, LP;

16

Caffe Primo Management 105, LP; Caffe Primo Management 106, LP;

17

Caffe Primo Management 107, LP; Caffe Primo Management 108, LP and

18

their subsidiaries and affiliates including but not limited to Summerplace

19

Management, LLC, PDC Partners Management, Inc.; and FDC Partners

20

Management, Inc., and any named Defendant, from control of, management

21

of, or participation in, the affairs of Defendants PDC Capital Group, LLC;

22

Caffe Primo International, Inc.; SAL Assisted Living, LP; SAL Carmichael,

23

LP; SAL Citrus Heights, LP; SAL Kern Canyon, LP; SAL Phoenix, LP;

24

SAL Westgate, LP; Summerplace as Sarasota, LP; Summerplace at

25

Clearwater, LP; Summerplace at Correll Palms, LP; TRC Tucson, LP; Clear

26

Currents West, LP; Caffe Primo Management, LP; Caffe Primo

27

Management 102, LP; Caffe Primo Management 103, LP; Caffe Primo

28

Management 104, LP; Caffe Primo Management 105, LP; Caffe Primo
-17-

C

e 8:16-cv-02257-CJC-DFM Document 36 Filed 01/23/17 Page 18 of 26 Page ID #:3034

Management 106, LP; Caffe Primo Management 107, LP; Caffe Primo
2

Management 108, LP and their subsidiaries and affiliates including but not

3

limited to Summerplace Management, LLC, PDC Partners Management,

4

Inc.; and FDC Partners Management, Inc:;

5
6

c.

to have control of, and to be added as the sole authorized signatory for, all

7

accounts of the entities in receivership, including all accounts at any bank,

8

title company, escrow agent, financial institution or brokerage firm

9

(including any futures commission merchant) which has possession, custody

10

or control of any Assets, or which maintains accounts over which

11

Defendants PDC Capital Group, LLC; Caffe Primo International, Inc.; SAL

12

Assisted Living, LP; SAL Carmichael, LP; SAL Citrus Heights, LP; SAL

13

Kern Canyon, LP; SAL Phoenix, LP; SAL Westgate, LP; Summerplace as

14

Sarasota, LP; Summerplace at Clearwater, LP; Summerplace at Correll

15

Palms, LP; TRC Tucson, LP; Clear Currents West, LP; Caffe Primo

16

Management, LP; Caffe Primo Management 102, LP; Caffe Primo

17

Management 103, LP; Caffe Primo Management 104, LP; Caffe Primo

18

Management 105, LP; Caffe Primo Management 106, LP; Caffe Primo

19

Management 107, LP; Caffe Primo Management 108, LP and their

20

subsidiaries and affiliates including but not limited to Summerplace

21

Management, LLC, PDC Partners Management, Inc.; and FDC Partners

22

Management, Inc., and/or any of its employees or agents have signatory

23

authority;

24

25

D.

to conduct such investigation and discovery as may be necessary to locate

26

and account for all of the assets of or managed by Defendants PDC Capital

27

Group, LLC; Caffe Primo International, Inc.; SAL Assisted Living, LP; SAL

28

Carmichael, LP; SAL Citrus Heights, LP; SAL Kern Canyon, LP; SAL
-18-

C

e 8:16-cv-02257-CJC-DFM Document 36 Filed 01/23/17 Page 19 of 26 Page ID #:3035

Phoenix, LP; SAL Westgate, LP; Summerplace as Sarasota, LP;
2

Summerplace at Clearwater, LP; Summerplace at Correll Palms, LP; TRC

3

Tucson, LP; Clear Currents West, LP; Caffe Primo Management, LP; Caffe

4

Primo Management 102, LP; Caffe Primo Management 103, LP; Caffe

5

Primo Management 104, LP; Caffe Primo Management 105, LP; Caffe

6

Primo Management 106, LP; Caffe Primo Management 107, LP; Caffe

7

Primo Management 108, LP and their subsidiaries and affiliates including

8

but not limited to Summerplace Management, LLC, PDC Partners

9

Management, Inc.; and FDC Partners Management, Inc., and to engage and

10

employ attorneys, accountants and other persons to assist in such

11

investigation and discovery;

12
13

E.

to take such action as is necessary and appropriate to preserve and take

14

control of and to prevent the dissipation, concealment, or disposition of any

15

Assets;

16

17

F.

to choose, engage, and employ attorneys, accountants, appraisers, and other

18

independent contractors and technical specialists, as the receiver deems

19

advisable or necessary in the performance of duties and responsibilities

20

under the authority granted by this Order;

21

22

G.

to make an accounting, as soon as practicable, to this Court and the SEC of

23

the assets and financial condition of Defendants PDC Capital Group, LLC;

24

Caffe Primo International, Inc.; SAL Assisted Living, LP; SAL Carmichael,

25

LP; SAL Citrus Heights, LP; SAL Kern Canyon, LP; SAL Phoenix, LP;

26

SAL Westgate, LP; Summerplace as Sarasota, LP; Summerplace at

27

Clearwater, LP; Summerplace at Correll Palms, LP; TRC Tucson, LP; Clear

28

Currents West, LP; Caffe Primo Management, LP; Caffe Primo
-19-

C

e 8:16-cv-02257-CJC-DFM Document 36 Filed 01/23/17 Page 20 of 26 Page ID #:3036

Management 102, LP; Caffe Primo Management 103, LP; Caffe Primo
2

Management 104, LP; Caffe Primo Management 105, LP; Caffe Primo

3

Management 106, LP; Caffe Primo Management 107, LP; Caffe Primo

4

Management 108, LP and their subsidiaries and affiliates including but not

5

limited to Summerplace Management, LLC, PDC Partners Management,

6

Inc.; and FDC Partners Management, Inc., and to file the accounting with

7

the Court and deliver copies thereof to all parties;

8
9

H.

to make such payments and disbursements from the Assets taken into

10

custody, control, and possession or thereafter received by him or her, and to

11

incur, or authorize the making of, such agreements as may be necessary and

12

advisable in discharging his or her duties as permanent receiver;

13
14

I.

to investigate and, where appropriate, to institute, pursue, and prosecute all

15

claims and causes of action of whatever kind and nature that may now or

16

hereafter exist as a result of the activities of present or past employees or

17

agents of Defendants PDC Capital Group, LLC; Caffe Primo International,

18

Inc.; SAL Assisted Living, LP; SAL Carmichael, LP; SAL Citrus Heights,

19

LP; SAL Kern Canyon, LP; SAL Phoenix, LP; SAL Westgate, LP;

20

Summerplace as Sarasota, LP; Summerplace at Clearwater, LP;

21

Summerplace at Correll Palms, LP; TRC Tucson, LP; Clear Currents West,

22

LP; Caffe Primo Management, LP; Caffe Primo Management 102, LP; Caffe

23

Primo Management 103, LP; Caffe Primo Management 104, LP; Caffe

24

Primo Management 105, LP; Caffe Primo

25

Primo Management 107, LP; Caffe Primo Management 108, LP and their

26

subsidiaries and affiliates including but not limited to Summerplace

27

Management, LLC, PDC Partners Management, Inc.; and FDC Partners

28

Management, Inc.;
-20-

~1anagement

106, LP; Caffe

C

e 8:16-cv-02257-CJC-DFM Document 36 Filed 01/23117 Page 21of26 Page ID #:3037

J.

to institute, compromise, adjust, appear in, intervene in, or become party to

2

such actions or proceedings in state, federal, or foreign courts, which (i) the

3

receiver deems necessary and advisable to preserve or recover any Assets, or

4

(ii) the receiver deems necessary and advisable to carry out the receiver's

5

mandate under this Order; and

6

7

K.

to have access to and monitor all mail, electronic mail, and video phone of

8

the entities in receivership in order to review such mail, electronic mail, and

9

video phone which he or she deems relates to their business and the

10

discharging of his or her duties as permanent receiver.

II

12
13

x.

14

IT IS FURTHER ORDERED that Defendants Emilio Francisco; PDC Capital

15

Group, LLC; Caffe Primo International, Inc.; SAL Assisted Living, LP; SAL Carmichael,

16

LP; SAL Citrus Heights, LP; SAL Kern Canyon, LP; SAL Phoenix, LP; SAL Westgate,

17

LP; Summerplace as Sarasota, LP; Summerplace at Clearwater, LP; Summerplace at

18

Correll Palms, LP; TRC Tucson, LP; Clear Currents West, LP; Caffe Primo

19

Management, LP; Caffe Primo Management 102, LP; Caffe Primo Management 103, LP;

20

Caffe Primo Management 104, LP; Caffe Primo Management 105, LP; Caffe Primo

21

Management 106, LP; Caffe Primo Management 107, LP; Caffe Primo Management 108,

22

LP, and their subsidiaries and affiliates, including all of the other entities in receivership,

23

and their officers, agents, servants, employees and attorneys, and any other persons who

24

are in custody, possession or control of any assets, collateral, books, records, papers or

25

other property of or managed by any of the entities in receivership, shall forthwith give

26

access to and control of such property to the permanent receiver.

27
28

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C

e 8:16-cv-02257-CJC-DFM Document 36 Filed 01/23/17 Page 22 of 26 Page ID #:3038

XI.
2

IT IS FURTHER ORDERED that no officer, agent, servant, employee or attorney

3

of Defendants Emilio Francisco; PDC Capital Group, LLC; Caffe Primo International,

4

Inc.; SAL Assisted Living, LP; SAL Carmichael, LP; SAL Citrus Heights, LP; SAL Kern

s

Canyon, LP; SAL Phoenix, LP; SAL Westgate, LP; Summerplace as Sarasota, LP;

6

Summerplace at Clearwater, LP; Summerplace at Correll Palms, LP; TRC Tucson, LP;

7

Clear Currents West, LP; Caffe Primo Management, LP; Caffe Primo Management 102,

8

LP; Caffe Primo Management 103, LP; Caffe Primo Management 104, LP; Caffe Primo

9

Management 105, LP; Caffe Primo Management 106, LP; Caffe Primo Management 107,

10

LP; Caffe Primo Management 108, LP shall take any action or purport to take any

11

action, in the name of or on behalf of Defendants without the written consent of the

12

permanent receiver or order of this Court.

13
14

15

XII.
IT IS FURTHER ORDERED that, except by leave of this Court, during the

16

pendency of this receivership, all clients, investors, trust beneficiaries, note holders,

17

creditors, claimants, lessors and all other persons or entities seeking relief of any kind, in

18

law or in equity, from Defendants Emilio Francisco; PDC Capital Group, LLC; Caffe

19

Primo International, Inc.; SAL Assisted Living, LP; SAL Carmichael, LP; SAL Citrus

20

Heights, LP; SAL Kern Canyon, LP; SAL Phoenix, LP; SAL Westgate, LP;

21

Summerplace as Sarasota, LP; Summerplace at Clearwater, LP; Summerplace at Correll

22

Palms, LP; TRC Tucson, LP; Clear Currents West, LP; Caffe Primo Management, LP;

23

Caffe Primo Management 102, LP; Caffe Primo Management 103, LP; Caffe Primo

24

Management 104, LP; Caffe Primo Management 105, LP; Caffe Primo Management 106,

25

LP; Caffe Primo Management 107, LP; Caffe Primo Management 108, LP, or their

26

subsidiaries or affiliates, and all persons acting on behalf of any such investor, trust

21

beneficiary, note holder, creditor, claimant, lessor, consultant group or other person,

28

including sheriffs, marshals, servants, agents, employees and attorneys, are hereby
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C

e 8:16-cv-02257-CJC-DFM Document 36 Filed 01/23/17 Page 23 of 26 Page ID #:3039

enjoined from, directly or indirectly, with respect to these persons and entities:
2
3

A. commencing, prosecuting, continuing or enforcing any suit or proceeding

4

(other than the present action by the SEC or any other action by the

5

government) against any of them;

6
7

B. using self-help or executing or issuing or causing the execution or issuance

8

of any court attachment, subpoena, replevin, execution or other process for

9

the purpose of impounding or taking possession of or interfering with or

10

creating or enforcing a lien upon any property or property interests owned

11

by or in the possession of Defendants Emilio Francisco; PDC Capital Group,

12

LLC; Caffe Primo International, Inc.; SAL Assisted Living, LP; SAL

13

Carmichael, LP; SAL Citrus Heights, LP; SAL Kern Canyon, LP; SAL

14

Phoenix, LP; SAL Westgate, LP; Summerplace as Sarasota, LP;

15

Summerplace at Clearwater, LP; Summerplace at Correll Palms, LP; TRC

16

Tucson, LP; Clear Currents West, LP; Caffe Primo Management, LP; Caffe

17

Primo Management l 02, LP; Caffe Primo Management 103, LP; Caffe

18

Primo Management 104, LP; Caffe Primo Management 105, LP; Caffe

19

Primo Management 106, LP; Caffe Primo Management 107, LP; Caffe

20

Primo Management 108, LP; and

21

22

C. doing any act or thing whatsoever to interfere with taking control,

23

possession or management by the permanent receiver appointed hereunder

24

of the property and assets owned, controlled or managed by or in the

25

possession of Defendants Emilio Francisco; PDC Capital Group, LLC; CafD

26

Primo International, Inc.; SAL Assisted Living, LP; SAL Carmichael, LP;

27

SAL Citrus Heights, LP; SAL Kern Canyon, LP; SAL Phoenix, LP; SAL

28

Westgate, LP; Summerplace as Sarasota, LP; Summerplace at Clearwater,
-23-

C

e 8:16-cv-02257-CJC-DFM Document 36 Filed 01/23/17 Page 24 of 26 Page ID #:3040

LP; Summerplace at Correll Palms, LP; TRC Tucson, LP; Clear Currents
2

West, LP; Caffe Primo Management, LP; Caffe Primo Management 102,

3

LP; Caffe Primo Management 103, LP; Caffe Primo Management 104, LP;

4

Caffe Primo Management 105, LP; Caffe Primo Management 106, LP;

5

Caffe Primo Management 107, LP; Caffe Primo Management 108, LP, or in

6

any way to interfere with or harass the permanent receiver or his attorneys,

7

accountants, employees, or agents or to interfere in any manner with the

8

discharge of the permanent receiver's duties and responsibilities hereunder.

9

10
11

XIII.

12

IT IS FURTHER ORDERED that Defendants Emilio Francisco; PDC Capital

13

Group, LLC; Caffe Primo International, Inc.; SAL Assisted Living, LP; SAL Carmichael,

14

LP; SAL Citrus Heights, LP; SAL Kern Canyon, LP; SAL Phoenix, LP; SAL Westgate,

15

LP; Summerplace as Sarasota, LP; Summerplace at Clearwater, LP; Summerplace at

16

Correll Palms, LP; TRC Tucson, LP; Clear Currents West, LP; Caffe Primo

17

Management, LP; Caffe Primo Management 102, LP; Caffe Primo Management 103, LP;

18

Caffe Primo Management 104, LP; Caffe Primo Management 105, LP; Caffe Primo

19

Management 106, LP; Caffe Primo Management 107, LP; Caffe Primo Management 108,

20

LP, and their subsidiaries, affiliates, officers, agents, servants, employees and attorneys,

21

shall cooperate with and assist the permanent receiver and shall take no action, directly or

22

indirectly, to hinder, obstruct, or otherwise interfere with the permanent receiver or his or

23

her attorneys, accountants, employees or agents, in the conduct of the permanent

24

receiver's duties or to interfere in any manner, directly or indirectly, with the custody,

25

possession, management, or control by the permanent receiver of the funds, assets,

26

collateral, premises, and choses in action described above.

27
28

//

-24-

C

e 8:16-cv-02257-CJC-DFM Document 36 Filed 01/23/17 Page 25 of 26 Page ID #:3041

XIV.
2

IT IS FURTHER ORDERED that Defendants PDC Capital Group, LLC; Caffe

3

Primo International, Inc.; SAL Assisted Living, LP; SAL Carmichael, LP; SAL Citrus

4

Heights, LP; SAL Kern Canyon, LP; SAL Phoenix, LP; SAL Westgate, LP;

5

Summerplace as Sarasota, LP; Summerplace at Clearwater, LP; Summerplace at Correll

6

Palms, LP; TRC Tucson, LP; Clear Currents West, LP; Caffe Primo Management, LP;

7

Caffe Primo Management 102, LP; Caffe Primo Management 103, LP; Caffe Primo

8

Management 104, LP; Caffe Primo Management 105, LP; Caffe Primo Management 106,

9

LP; Caffe Primo Management 107, LP; Caffe Primo Management 108, LP and their

10

subsidiaries and affiliates including but not limited to Summerplace Management, LLC,

11

PDC Partners Management, Inc.; and FDC Partners Management, Inc., shall pay the

12

costs, fees and expenses of the permanent receiver incurred in connection with the

13

performance of his duties described in this Order, including the costs and expenses of

14

those persons who may be engaged or employed by the permanent receiver to assist him

15

in carrying out his duties and obligations. All applications for costs, fees, and expenses

16

for services rendered in connection with the receivership other than routine and necessary

17

business expenses in conducting the receivership, such as salaries, rent, and any and all

18

other reasonable operating expenses, shall be made by application setting forth in

19

reasonable detail the nature of the services and shall be heard by the Court.

20
21
22

xv.
IT IS FURTHER ORDERED that no bond shall be required in connection with the

23

appointment of the permanent receiver. Except for an act of gross negligence, the

24

permanent receiver shall not be liable for any loss or damage incurred by any of the

25

defendants, their officers, agents, servants, employees and attorneys or any other person,

26

by reason of any act performed or omitted to be performed by the permanent receiver in

27

connection with the discharge of his duties and responsibilities.

28

-25-

C

e 8:16-cv-02257-CJC-DFM Document 36 Filed 01/23/17 Page 26 of 26 Page ID #:3042

XVI.
2

IT IS FURTHER ORDERED that representatives of the SEC and any other

3

government agency are authorized to have continuing access to inspect or copy any or all

4

of the corporate books and records and other documents of Defendants PDC Capital

5

Group, LLC; Caffe Primo International, Inc.; SAL Assisted Living, LP; SAL Carmichael,

6

LP; SAL Citrus Heights, LP; SAL Kern Canyon, LP; SAL Phoenix, LP; SAL Westgate,

7

LP; Summerplace as Sarasota, LP; Summerplace at Clearwater, LP; Summerplace at

8

Correll Palms, LP; TRC Tucson, LP; Clear Currents West, LP; Caffe Primo

9

Management, LP; Caffe Primo Management 102, LP; Caffe Primo Management 103, LP;

10

Caffe Primo Management 104, LP; Caffe Primo Management 105, LP; Caffe Primo

11

Management 106, LP; Caffe Primo Management 107, LP; Caffe Primo Management 108,

12

LP and their subsidiaries and affiliates including but not limited to Summerplace

13

Management, LLC, PDC Partners Management, Inc.; and FDC Partners Management,

14

Inc.,, and the other entities in receivership, and continuing access to inspect their funds,

15

property, assets and collateral, wherever located.

16
11

XVII.

18

IT IS FURTHER ORDERED that this Court shall retain jurisdiction over this

19

action for the purpose of implementing and carrying out the terms of all orders and

20

decrees which may be entered herein and to entertain any suitable application or motion

21

for additional relief within the jurisdiction of this Court.

22

23
24

DATED:

January 23, 2017

25

CORMAC J. CARNEY

26
27

UNITED STATES DISTRICT WDGE

28
-26-