Securities and Exchange Commission v. 1 Global Capital LLC et al

Filing 2

COPY OF ORDER from USDC-Southern District of Florida appointing Jon A. Sale as receiver over Relief Defendants Bright Smile Financing, LLC, BRR Block Inc., Digi South, LLC, Ganador Enterprises, LLC, Media Pay LLC, and Pay Now Direct LLC. (KLF)

· iLED

UN1TED STATES DJ STRJ CT COU RT
SOUTHER DJSTRICT OF FLORJOA
CASE NO. 0:18-cv-6 1991 -BB

U.S. DISTR ICT COURT
DISTRICT O I 1E8Ht\SI\ A
F

018 SEP -5 AH 10: 08

O lCE OF
'l

r

E CLER!<

SECURITIES AND EXCHANGE COMMISSJO ,
Plaintiff,
V.

1 GLOBAL CAPITAL LLC, and
CARL RUDERMAN,
Defendants, and
l WEST CAPlT AL LLC,
BRIGHT SMILE FINANCING, LLC,
BRR BLOCK INC.,
DIGI SOUTH, LLC,
GANADOR ENTERPRISES, LLC,
MEDIA PAY LLC,
PAY NOW DIRECT LLC, and
RUDERMAN FAMILY TRUST,

Relief Defendants.

- -- - - - - - - - - - - -- - - - - -I
SEALED ORDER GRANTING PLAI TIFF SECURJTJES A l D EXCHA GE
COMMISSION'S EMERGENCY EX PAR TE MOTION FOR APPOJNTMENT OF
RECEIVER
WHEREAS Pl a inti ff Securiti es and Exchange Commi ss ion has filed a mot ion for the

appo intm ent of a Rece iver over Re li ef Defendant s Bright Sm il e Financi ng. LLC, BRR Block
Jn c .. Di gi So uth. LLC, Gan ador Enterpri ses. LL C. IVlcclia Pa) LI .C. and Pay

ow Direct LLC,

(c oll ec tivel y, ''Re li e f Defend ants") wi th full and e., clusivc po\, er. du ty and authority to:
adm ini ster and manage th e bu siness a ffa irs. rund s. assets. ca uses in ac ti on and an) othe r prope 11 y

or th ese

Reli ef Defe ndants: marsha l and sa reg uarcl all

or the ir a~scts: ~
ind

arc nece ssary fo r th e protec ti on o f th e in vestors (""M oti on fo r ,\ ppnintment

tal-; e whateve r acti ons

or Receive r.. ):

CASE NO. 0:18-cv-61991 -BB

WHEREAS, th e Comm iss ion has made a suffi cient and pro per show ing in sup port of the

re li ef req uested;
WHEREAS, th e Commi ss ion has submi1t ed th e crede nti als o l' a ca ndida te to be

appointed as Rece iver of all of th e assets, prope rti es. boo ks and record s. and other items of these
Re li ef Defendants, in cludi ng any propert ies. asse ts and oth er it ems held in their names or th eir
principals' names, and th e Commi ss ion has advi sed th e Co urt th at th is ca ndi date is prepared to
ass um e thi s responsibility if so ord ered by th e Court ;
T he Moti on fo r Appointm ent of Rece iver. ECF N o.

161, is

GR AN T ED IN PART, and

DENIED IN PART, and it is ORDERED AND ADJ UDGED as fo llows: Jon A. Sale,

elson

Mullins Broad and Cassel , 2 South Biscayne Boulevard , On e Bisca yne Tower, 21 st Floor,
Miami, Florida 33131, 305-373-9400, jon .sale@ nelsonmullin s.com is appoin ted the Receiver

over th ese Reli ef Defendants, th eir subs id ia ri es, successors and ass igns, and is hereby auth ori zed,
empowered, and di rected to:
1.

Ta ke immedi ate possess ion of a 11 property. assets and estates of every kind of

th ese Relief Defenda nts, whatsoever and where eve r loca ted be longing to or in the possess ion of
th ese Reli ef Defend ants, in cluding bu t not lim ited to all o ffi ces maintain ed by these Relief
Defenda nts, ri ghts of ac ti on, books. papers. data process in g records. evidences of debt, bank
1ifi
accounts, sav in gs acco unts, ce1 ca tes of deposit. stoc ks. bonds. debentures and oth er sec urit ies,
mort gages, furni ture, fi xtu res, offic e supp li es and eq ui pment. and all rea l propert y o f th ese Relief
De fenda nts wherever situated, and to adm ini ster such assets as is req uired in orde r to comp ly
wi th th e di rect ions contain ed in thi s Orde r. and
th is Co urt :

10

hold all oth er assets pe nding furthe r order of

CASE

2.

0. 0:18-cv-61991-BB

ln ves ti gate th e mann er in v ch th e a ll airs o l' th ese Re li ef Defe ndants were
vhi

co nducted and institute such ac ti ons and lega l proceed in gs. lo r th e benefit and on be half of these
Reli e f Defend ants and th eir investors and oth er cred it ors. as th e Rece iver dee ms necessary
again st those individuals, co rporati ons, partnerships. assoc iati ons and/or unincorporated
orga ni zations, which th e Rece iver may c la im have wro ng full y. ill ega ll y or oth erwise improperly
mi sa ppropri ated or transferred money or oth er proceeds direc tl y or indirectly traceabl e from
investors in Defendant l Gl obal Ca pita l LLC, and Re li ef De fend ant I Wes t Ca pita l LLC, and
these Relief Defendants, th e ir offi ce rs, directors. employees, affili ates, subsidiaries, or any
persons actin g in concert or parti cipati on w ith th em. or aga inst any tra nsfers of money or other
proceeds directly or indirectly traceabl e from in vestors in I G lobal , l West, and these Reli ef
Defendants; provided such ac ti ons may in c lud e, but not be limited to, seeking imposition of
constructive trusts, disgorgement of pro fit s, recove ry and /or avoidance of fraudulent transfers
under Florida Statute § 726 .10 I, et. seq. or oth erw ise. resc iss ion and restitution, the collection of
debts, and such orders from thi s Court as may be necessa ry to enfo rce thi s Order;
3.

Present to thi s Co urt peri odi c report s (no less th an qu arterl y) reflectin g th e

existence and valu e of the assets of th ese Re li e f De fend ant s and of th e ex tent o f li abilities, both
th ose claimed to ex ist by oth ers and th ose the Rece ive r be li eves to be lega l obli gati ons of th ese
Re li ef Defendants;
4.

Appoint one or more s pecia l age nt s. e mploy lega l co unse l. actu ari es, account ants,

c lerk s, consultants and assistant s as th e Rece iver deem s necessa ry and to fi x and pay th e ir
reaso nabl e co mpensati on and reasonab le o:pe nses. as we ll as a ll reaso nabl e ex penses of taki ng
possess io n o f th e asse ts and busin ess of th ese Re lief l)efc nc.lan ts. and exe rcising th e powe r

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CASE NO. 0:18-cv-61991-BB

granted by thi s Ord er, subject to approva l by thi s Co urt.

Thi s inc lud es a ma nage ment or

restru cturin g company or co mpani es;
5.

Engage persons in th e Reccivc r·s di screti on to ass ist the Rece iver in ca rrying out

th e Rece iver's duties and res pon sibiliti es. in clu din g. but not limited to, th e United States
Marshal's Servi ce or a private sec urity firm:
6.

Defe nd , compromi se or settl e lega l ac ti ons. in cludin g the in stant proceeding, in

which th ese Reli ef Defendants or th e Rece iver are a party, commenced ei th er pn or to or
subsequ ent to thi s Order. The Rece iver may also wa ive any attorn ey-client or oth er privilege
held by th ese Reli ef Defendan ts;
7.

Assume control of, and be nam ed as au th ori zed signatory for, all acco unts at any

bank, brokerage firm or fin ancial instituti on whi ch has possess ion, custody or control of any
assets or fund s, wherever situ ated, of th ese Reli ef Defend ants and, upon ord er of this Court, of
any of th eir subsidiaries or affi li ates, prov ided th at the Rece iver deems it necessary;
8.

Make or auth ori ze such payments and di sbursements from th e funds and assets

taken into contro l, or th ereaRer rece ived by th e Rece ive r, and incur, or authori ze the incurrence
of, such expenses and make, or auth ori ze th e making o f. such agreements as may be reasonab le,
necessary, and advisa ble in di scharging th e Re cc ivcr· s du ties;
9.

Have access to and revi ew all mai l of th ese Re li ef Defendants (exce pt for mai l

th at ap pea rs on its face to be pure ly persona l or att orney-c li ent pr ivi leged) rece ived at any office
or add ress of th ese Re li ef Defe nd ant s.

;\II

111 ;:i il that is ope ned by th e Receive r and , upon

in spec ti on, is de termin ed by th e Rece iver to be perso n<1 I or att orn ey-c li ent pri v il eged, shall be
promptl y del ive red to th e addressee and the l{cce iver sha ll not retain any co py.

CASE NO. 0:18-cv-61991-BB

lT JS FURTHER ORD ERED AN D AD.J UDGED th at.

111

connection with the

appointment of th e Rece iver provided for above :
10.

T hese Relie f Defe ndant s and all o r their directors, o ffi cers, agents, employees,

attorn eys, attorn eys- in-fact , sha reho lders. and other persons who are in custody, possession, or
co ntro l of any asse ts, books, reco rds. or other propert y of these Re lief Defenda nts shall del ive r
fo rth w ith upon demand such property. moni es. books and reco rds to th e Rece iver, and shall
forthw ith gra nt to the Receive r aut hori za ti on to be a signato ry as to all acco unts at banks,
brokerage firm s or fi nancia l in stituti ons whi ch have possess ion, custody or co ntro l of any assets
or fund s in th e name of or fo r the benefi t o r these Re li ef Defendants;
11 .

A ll banks, broke rage firm s. fin ancial in stitu tions, an d oth er bus iness entities

which have possession, custody or control of any assets, fund s or accounts in the name of, or fo r
th e benefit of, these Reli ef Defend ant s shall cooperate exped itiously in th e gra ntin g of control
and auth ori zati on as a necessa ry signatory as to sa id assets and acco unts to th e Rece ive r;
12.

Unless auth orized by the Rece ive r, th ese Relief Defendants and their principals

shall take no act ion , nor purport to tak e any ac ti on, in th e name of or on behalf of th ese Reli ef
Defendants;
13.

The Rece ive r fu rth er is a utho ri zed to take depositi ons, subpoena reco rd s, and

oth er di scovery. The Reli ef Defe ndant s and th eir pri ncipa ls, and res pecti ve officers, agents,
employees, attorn eys. and attorneys- in- fact sha ll take no ac tion, direct ly or indi rect ly, to hinder,
obstru ct, or oth erwi se interl e re wi th th e Rece ive r in the co ndu ct or the Rece iver·s duti es or to
interfe re in any man ner. directl y or indirectly. with th e c ustody. posses ion, management , or
con tro l by th e Rece iver o f the rund s. ~ 1s. premises. and choses in ac tion desc ribed above:
1ssc

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CASE NO. 0:18-cv-61991-BB

14.

The Rece iver. and any co un se l whom th e Rece iver may se lect, are entitl ed to

reaso nabl e co mpensati on fr om th e assets now held by or in th e possess ion or contro l of or whic h
may be rece ived by th ese Re li e r Defe nd ants: said amount or amounts of compensation shall be
commensurate with th eir du ti es and ob li ga ti ons und er th e circum stances, subj ect to approval of
th e Court. The Rece iver and hi s co un se l shall file w ith th e Co urt no less th an quarterly an
ap plicati on fo r reasonabl e compensati on and provide to th e Commi ssion and th e Court a copy of
th e Com miss ion's Stand ard Fund Acco untin g Report ;
15.

During th e period o r thi s rece ivership, all persons, including cred itors, banks,

investors, or others, w ith ac tu a l noti ce o f thi s Order, oth er th an th e Receiver, are enj oin ed from
filing a petiti on fo r reli e f und er th e

nited States Bankruptcy Code without prior permiss ion

from thi s Co urt, or from in any way di sturbin g th e asse ts or proceeds of the rece ivership or from
prosecutin g any acti ons or proceedin gs whi ch in vo lve the Rece iver or which affect the property
of th ese Relief Defend ants;
16.

The Rece iver 1 full y auth ori zed to proceed w ith any fil ing the Receiver may
s

deem approp ri ate und er th e Bank rupt cy Code as to th ese Reli ef Defe ndants;
17.

Ti tl e to all propert y. rea l or personal, all co ntrac ts, ri ghts of ac ti on an d all books

and records of th ese Reli e r De le nd ants and th e ir principa ls, wherever located within or with out
thi s state, is vested by operati on o f law in the Rece iver;
18.

Upon request b: th e Rece ive r. any co mpany providing telephone servi ces to these

Relief De fend ant s shall pro vide a re le rcnce o r ca ll s from any number present ly ass igned to th ese
Relief Defe nd ant s to any such nu mber uesignated by th e Receiver or perfo rm any othe r changes
necessa ry to th e co ndu ct o r th e rece ivership:

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CASE NO. 0:18-cv-61991-BB

19.

/\ ny entit y 1
·urni shin g \\alc r. electric. te lephone, sewage, ga rbage or trash remova l

services to th ese Re li e f Defenda nt s shall ma intain such service and tran sfer any such accounts to
th e Rece iver un less in stru cted to th e contrary by th e Rece iver;
20.

The Unit ed States Postal Service is directed to provide any inform atio n req uested

by th e Rece ive r rega rdin g th ese Reli ef Defe ndants, an d to handle future deli veries of th e mai I of
th ese Reli ef Defend ants as directed by the Rece iver;
2 1.

o ba nk. savin gs and loan assoc iati on, oth er financial instituti on, or any oth er

person or entity shall exerci se any form of set-off, all eged set-off, lien, or any form of self-he lp
whatsoever, or refu se lo tran s fe r any fund s or assets of th ese Relief Defendants to the Rece iver ' s
contro l without th e permi ssion of thi s Court ;
22.

No bond shall be required in connection with the appointment of the Receiver.

Exce pt fo r an ac t of gross neg li ge nce or grea ter, th e Rece iver shall not be li able for any loss or
damage in curred by th ese Reli ef Defendants or by th e Rece iver's officers, agents or employees,
or any oth er perso n, by reason o f any act perform ed or omitted to be perform ed by the Receiver
in conn ecti on with th e d ischarge o r th e Rece ive r's duties and respon sibilities;
23 .

Service o f thi s Ord er shall be suffi cient if made upon th ese Reli ef Defe ndants and

th eir prin cipals by personal service. fa csimil e or overni ght co uri er;
24.

In the event that th e Rece ive r di scove rs th at in vestor fu nd s received by th ese

Relief Defe ndant s have been tran s le rred to oth er persons or enti ties, th e Rece iver sha ll app ly to
thi s Co urt fo r an O rde r givin g the Re ceiver possession of such funds and , if th e Rece iver deems
it adv isab le. e.x tending thi s rece ive rship ove r any person or entity holding such in vestor fu nd s:
and
25.

Thi s Co un ::, hall reta in juri sd icti on o t. thi s matter fo r all purposes.

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CASE NO. 0:18-cv-61991-BB

DONE AN D ORDERED in chambe rs in Miam i, Florida thi s 23 rd day of August, 20 18.

BETH BLOOM
UN ITED STA TES DISTRICT JUDGE

Cop ies to:
Robert Levenson. Esq.
Seni or Tria l Counse l
80 I Bri cke ll A venue. Suite 1800
Miami , Florida 33 13 1
Phone: [phone] I
Fax: [phone]
[e-mail]
Counsel for Securities and Exchange Comm ission
Christopher E. Martin, Esq.
Senior Tri al Counse l
801 Bri ckell Avenue, Su ite 1800
Miami , Florida 33 13 l
Phone: [phone]
Fax: [phone]
[e-mail]
Counsel/or Securities and Exchange Commission

Jon A. Sa le. Esq.
elson Mu llins Broad and Cassel
2 South Bi scayne Boul eva rd
1
One Biscay ne To" er - 2 1' Fl oor
Miami. Florida 33 13 1
.l on.sa le@nelsonmu 11 in s.com
Receiver

8