Federal Trade Commission v. Ivy Capital, Inc. et al

Filing 186

ORDER Regarding Release of Frozen Funds for Living Expenses. IT IS HEREBY ORDERED that 168 Order affirming 163 Receivers Recommendations in its entirety is hereby AMENDED. Signed by Judge James C. Mahan on 5/12/2011. (Copies have been distributed pursuant to the NEF - SLR)

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WILLARD K. TOM
2 General Counsel
3 EMILY COPE BURTON

[e-mail]
4 SHAMEKA L. GAINEY
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[e-mail]
ROBERT G. SCHOSHINSKI
[e-mail]
Federal Trade Commission
600 Pennsylvania Avenue, NW, H-286
Washington, DC 20580
202-326-2728 (Burton)
202-326-2570 (Gainey)
202-326-3219 (Schoshinski)
202-326-3395 (Fax)

11 BLAINE T.WELSH

[e-mail]
12 Assistant United States Attorney

Nevada Bar No. 4790
333 Las Vegas Blvd. South, Suite 5000
14 Las Vegas, NV 89101
702-388-6336
15 702-388-6787 (Fax)
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16 Attorneys for Plaintiff Federal Trade Commission
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UNITED STATES DISTRICT COURT
DISTRICT OF NEVADA

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FEDERAL TRADE COMMISSION,

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Plaintiff,
v.
IVY CAPITAL, INC., et al.,
Defendants, and

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CHERRYTREE HOLDINGS, LLC, et al.,
Relief Defendants.

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) Case No. 2:11-cv-00283-JCM -GWF
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) [PROPOSED] ORDER REGARDING
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RELEASE OF FROZEN FUNDS
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FOR LIVING EXPENSES
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Upon consideration of the receiver’s recommendations regarding living expenses and

2 related matters (Doc. #163) (“receiver’s recommendations”) and plaintiff’s opposition to
3 receiver’s recommendations regarding the release of frozen funds for living expenses (Doc.
4 #169), and for good cause shown,
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IT IS HEREBY ORDERED, that the April 21, 2011 order affirming the receiver’s

6 recommendations in its entirety is hereby AMENDED as set forth below;
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IT IS FURTHER ORDERED, that section III (asset freeze) of the preliminary

8 injunction (Doc. #91) entered on March 25, 2011 in this matter is hereby amended to permit the
9 limited release of certain personal living expenses, as set forth below, to six individual
10 defendants – Kyle G. Kirschbaum, John H. Harrison, Steven E. Lyman, Christopher M. Zelig,
11 Steven R. Sonnenberg and James G. Hanchett – and three individual relief defendants – Kierston
12 Kirschbaum, Tracy Lyman and Melyna Harrison:
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(1) No individual defendant or relief defendant shall be permitted to access receivership

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defendants’ funds to pay for their personal living expenses. Any receivership

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defendants’ funds already released to defendants shall be returned to the receiver

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promptly. All personal living expenses to be released pursuant to this order shall be

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paid from the particular defendant’s and/or relief defendant’s frozen personal

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accounts, including, if necessary, any retirement, IRA, 401(k) or other personal

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accounts. The amounts set forth in paragraph 3 below shall be reduced by the amount

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of any funds already received from personal accounts pursuant to the April 21, 2011

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order.

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(2) The release of such living expenses shall be for a period of four months, beginning

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April 21, 2011, with the final release of funds on or about July 21, 2011 to cover

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expenses through August 21, 2011.

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(3) The court has reviewed the proposed monthly budgets, submitted with the receiver’s

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recommendations, for the Kirschbaum, Harrison, Lyman, Sonnenberg, Hanchett and

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Zelig households. Personal funds for these individuals shall be unfrozen in the
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amounts necessary to cover reasonable monthly living expenses not to exceed the

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following amounts:

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a. Kyle and Kierston Kirschbaum:

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i. Housing (including insurance and utilities): not to exceed $3,892

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ii. Children (diapers, formula, clothing and education): not to exceed

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$310
iii. Vehicles: costs associated with gas, maintenance and insurance for one

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vehicle not to exceed $581

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iv. Food: not to exceed $1,000

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v. Insurance/Health Expenses: not to exceed $1,543

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TOTAL MONTHLY EXPENSES not to exceed $7,326.00

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b. John and Melyna Harrison:

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i. Housing (including insurance and utilities): not to exceed $2,230

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ii. Children (diapers, formula, clothing and education): not to exceed

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$280
iii. Vehicles: costs associated with gas, maintenance and insurance for one

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vehicle not to exceed $425

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iv. Food: not to exceed $1,000

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v. Insurance/Health Expenses: not to exceed $1,593

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TOTAL MONTHLY EXPENSES not to exceed $5,528.00

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c. Steven and Tracy Lyman:

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i. Housing (including insurance and utilities): not to exceed $4,375.55

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ii. Children (diapers, formula, clothing and education): not to exceed

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$285
iii. Vehicles: costs associated with gas, maintenance and insurance for one

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vehicle not to exceed $490

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iv. Food: not to exceed $1,000
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v. Insurance/Health Expenses: not to exceed $1,949.37

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TOTAL MONTHLY EXPENSES not to exceed $8,099.92

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d. Christopher Zelig:

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i. Housing (including insurance and utilities): not to exceed $3,230

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ii. Vehicles: costs associated with payment, gas, maintenance and

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insurance for one vehicle not to exceed $1,260

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iii. Food: not to exceed $500

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iv. Insurance/Health Expenses: not to exceed $250

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TOTAL MONTHLY EXPENSES not to exceed $5,240.00

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e. James Hanchett:

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i. Housing (including insurance and utilities): not to exceed $3,000

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ii. Children (diapers, formula, clothing and education): not to exceed

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$1,100

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iii. Vehicles: costs associated with gas, maintenance and insurance for one

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vehicle not to exceed $325

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iv. Food: not to exceed $800

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v. Insurance/Health Expenses: not to exceed $650

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TOTAL MONTHLY EXPENSES not to exceed $5,875

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f.

Steven Sonnenberg

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i. Housing (including insurance and utilities): not to exceed $3,067

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ii. Children (diapers, formula, clothing and education): not to exceed

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$950
iii. Vehicles: costs associated with payment, gas, maintenance and
insurance for one vehicle not to exceed $1,140.50

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iv. Food: not to exceed $934

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v. Insurance/Health Expenses: not to exceed $670

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TOTAL MONTHLY EXPENSES not to exceed $6,761.50
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(4) The receiver shall provide to the Federal Trade Commission an accounting of any
funds already released pursuant to the April 21, 2011 order.

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IT IS SO ORDERED:

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__________________________
The Honorable James C. Mahan
United States District Judge

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May 12, 2011
Dated: ____________________

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Certificate of Service
I hereby certify that on May 4, 2011, I electronically filed the foregoing document with

3 the Clerk of the Court using CM/ECF, which will send a notice of electronic filing to all counsel
4 of record.
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/s/ Emily Cope Burton
Emily Cope Burton

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