Securities and Exchange Commission v. Beasley et al

Filing 310

ORDER Granting #305 Stipulation Plaintiff Securities And Exchange Commission's, The Receiver's, Defendant Christopher Humphries', And Non-Party Jessica Humphries' First Stipulation Concerning Living Expenses. Signed by Judge Cristina D. Silva on 9/15/2022. (Copies have been distributed pursuant to the NEF - YAW)

Case 2:22-cv-00612-CDS-EJY Document 310 Filed 09/15/22 Page 1 of 8

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JARROD L. RICKARD, Bar No. 10203
[e-mail]
KATIE L. CANNATA, Bar No. 14848
[e-mail]
SEMENZA KIRCHER RICKARD
10161 Park Run Drive, Suite 150
Las Vegas, Nevada 89145
Telephone: [phone]
Facsimile: [phone]

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Attorneys for Receiver

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Greenberg Traurig, LLP
10845 Griffith Peak Drive, Suite 600
Las Vegas, NV 89135
[phone]
[phone] (fax)

KARA B. HENDRICKS, Bar No. 07743
[e-mail]
JASON K. HICKS, Bar No. 13149
[e-mail]
KYLE A. EWING, Bar No 14051
[e-mail]
GREENBERG TRAURIG, LLP
10845 Griffith Peak Drive, Suite 600
Las Vegas, Nevada 89135
Telephone: [phone]
Facsimile: [phone]

DAVID R. ZARO*
[e-mail]
JOSHUA A. del CASTILLO*
[e-mail]
MATTHEW D. PHAM*
[e-mail]
*admitted pro hac vice
ALLEN MATKINS LECK GAMBLE
MALLORY & NATSIS LLP
865 South Figueroa Street
Suite 2800
Los Angeles, California 90017-2543
Telephone: [phone]
Facsimile: [phone]

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UNITED STATES DISTRICT COURT

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DISTRICT OF NEVADA

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SECURITIES AND EXCHANGE
COMMISSION,

Case No. 2:22-cv-00612-CDS-EJY
PLAINTIFF SECURITIES AND
EXCHANGE COMMISSION’S, THE
RECEIVER’S, DEFENDANT
CHRISTOPHER HUMPHRIES’, AND
NON-PARTY JESSICA
HUMPHRIES’ FIRST STIPULATION
CONCERNING LIVING EXPENSES

Plaintiff,
vs.
MATTHEW WADE BEASLEY et al.
Defendants;
THE JUDD IRREVOCABLE TRUST et al.
Relief Defendants.

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Plaintiff United States Securities and Exchange Commission (“SEC”, “Commission”, or

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“Plaintiff”), the Court’s appointed Receiver, Geoff Winkler of American Fiduciary Services LLC

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(the “Receiver”), defendant Christopher Humphries (“Mr. Humphries”), relief defendant CJ

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Investments, LLC (“Relief Humphries Company”), and non-party Jessica Humphries (“Mrs.

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Humphries”) (collectively the “Humphries”) hereby provide this first stipulation regarding the
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Case 2:22-cv-00612-CDS-EJY Document 310 Filed 09/15/22 Page 2 of 8

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following and ask this Court to enter an ORDER consistent with this stipulation regarding the

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release of living expenses for Mrs. Humphries, her husband defendant Christopher Humphries,

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and their four children.

Greenberg Traurig, LLP
10845 Griffith Peak Drive, Suite 600
Las Vegas, NV 89135
[phone]
[phone] (fax)

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I.

RECITALS

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WHEREAS, on April 12, 2022, Plaintiff filed its Complaint in this matter, alleging

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violations of the registration and/or antifraud provisions of the federal securities laws by the eleven

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named Defendants (who include Mr. Humphries), and the receipt of ill-gotten proceeds of such

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violations by the eleven Relief Defendants (which include CJ Investments, LLC). (Dkt. No. 1.)

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WHEREAS, on April 13, 2022, the Commission filed an Ex Parte Application for Entry

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of a Temporary Restraining Order and other equitable relief as to Defendants and an asset freeze

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as to Defendants and Relief Defendants (Dkt. No. 2), which was granted by the Court on April 13,

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2022. (Dkt. No. 3.)

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WHEREAS, on or about April 15th, 2022, pursuant to the Court’s asset freeze, Wells
Fargo bank and U.S. Bank froze the following accounts with the following balances:

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a) US Bank Personal Checking xx8067

Balance $1,338,691.24

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b) US Bank Personal Savings xx1591

Balance $500.00

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c) US Bank CJ Investments xx0526

Balance $1,128,269.48

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d) US Bank CJ Humphries Foundation xx0913

Balance $346,704.08

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e) Wells Fargo Personal Checking xx5547

Balance $47,203.75

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f) Wells Fargo Personal Savings xx2164

Balance $1,100.27

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g) Wells Fargo Teen Checking xx0829

Balance $17.65

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h) Wells Fargo Doterra Essential Oils xx8722

Balance $5,186.21

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i) Wells Fargo Anderson Dairy Creamery xx 1189

Balance $2.24

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j) Wells Fargo CJ Investments LLC xx6358

Balance $52,650.58

k) Wells Fargo BugRaiders Checking xx0377

Balance $51,314.74

l) Wells Fargo BugRaiders Savings xx9745

Balance $1,800.34

m) Wells Fargo JCH Consulting LLC xx1243

Balance $8,427.38

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Greenberg Traurig, LLP
10845 Griffith Peak Drive, Suite 600
Las Vegas, NV 89135
[phone]
[phone] (fax)

Case 2:22-cv-00612-CDS-EJY Document 310 Filed 09/15/22 Page 3 of 8

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WHEREAS, on April 21, 2022, the Court issued its Order Entering Preliminary

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Injunction, Asset Freeze, and other Equitable Relief as to Defendants and Relief Defendants,

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which, inter alia, continued the asset freeze imposed by the Court on April 13, 2022. (Dkt. No.

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56.) The Court’s Order provided that “any allowance for necessary and reasonable living expenses

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

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opportunity for the Commission to be heard.”

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WHEREAS, at the show cause hearing before the Court on April 21, 2022, the Court

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directed counsel for the Humphries to discuss the issues with the SEC and seek to resolve the

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issues surrounding the Humphries’ living expenses in an amicable manner. If no voluntary

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arrangement could be reached, then the Humphries could bring the unresolved issues to the Court

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for decision.

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WHEREAS, on June 3, 2022, the Court appointed a Receiver, Geoff Winkler, and ordered

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him to take possession of the personal assets of Mr. Humphries during the pendency of this Action.

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(the “Receivership Order”)(Dkt. 88).

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WHEREAS, on or about June 24, 2022, the Receiver took possession of the following
personal assets from Wells Fargo bank with the following balances transferred to the Receiver:

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a) Wells Fargo Personal Checking xx5547

Balance $47,203.75

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b) Wells Fargo Doterra Essential Oils xx8722

Balance $5,186.21

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c) Wells Fargo CJ Investments LLC xx6358

Balance $52,650.58

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d) Wells Fargo BugRaiders Checking xx0377

Balance $51,314.74

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e) Wells Fargo JCH Consulting LLC xx1243

Balance $8,427.38

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WHEREAS, on June 29, 2022, the SEC filed an Amended Complaint (Dkt. 118).

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WHEREAS, now counsel for Plaintiff, the Receiver, and the Humphries have reached the

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following agreement as to an allowance for living expenses for the Humphries and jointly provide

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this proposed agreement for approval by the Court.

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Case 2:22-cv-00612-CDS-EJY Document 310 Filed 09/15/22 Page 4 of 8

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II.

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1.

Living expenses for Mr. and Mrs. Humphries and their four minor children are

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approved for a six month period in the amount of $6,630 per month for a total of

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$39,780.

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Greenberg Traurig, LLP
10845 Griffith Peak Drive, Suite 600
Las Vegas, NV 89135
[phone]
[phone] (fax)

STIPULATED TERMS

2.

In lieu of paying the living expenses identified above, the $39,780 will be credited

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towards the outstanding amount owed on the mortgage for the Humphries residence

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in Huntington Beach (the precise address is listed in the sealed assets list filed with

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the Court April 20, 2022; DKT 37) and the Receiver will forbear the right to seek

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any remaining amounts from the Humphries relating to the Huntington Beach

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property and will utilize the proceeds of the sale of the property to address any

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deficit.

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3.

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The Receiver and the SEC shall permit the Humphries to retain the following
vehicles. The Humphries agree to maintain insurance on these vehicles:

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a. 2021 Chevrolet Tahoe (NV License Plate ALC402) registered to CJ

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Investments that Mr. Humphries drives as his primary vehicle;

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b. 2020 Tesla Model X (NV License Plate ALC406) registered to CJ

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Investments that Mrs. Humphries drives as her primary vehicle;

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c. 2014 Nissan Frontier (NV License Plate 120U84) registered to BugRaiders

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Pest Control which is used as a work vehicle by the BugRaiders business

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(replacement for the totaled 2022 Chevrolet Colorado work truck); and

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d. 2021 Chevrolet Colorado (NV License Plate 729N71) registered to

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BugRaiders Pest Control which is used as a work vehicle by the BugRaiders

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business.

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4.

The Humphries agree to cooperate with the Receiver and the SEC to turn over no

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later than August 31, 2022, to the Receiver at the Huntington Beach house the

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following vehicles:

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Case 2:22-cv-00612-CDS-EJY Document 310 Filed 09/15/22 Page 5 of 8

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a. 1977 VW Bus (NV License Plate 5Y78) registered to CJ Investments; and

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b. 2021 Tomberlin Golf Cart (CA License Plate 8XYS271) registered to Mr.

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5.

The Humphries agree to cooperate with the Receiver and the SEC to turn over no

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later than September 30, 2022, to the Receiver at the Huntington Beach house the

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following vehicle:

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a. 2021 Jeep Wrangler (NV License Plate xx0242) registered to Mr. and Mrs.

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Humphries which their 16 year old daughter has been using while attending

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high school.

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Greenberg Traurig, LLP
10845 Griffith Peak Drive, Suite 600
Las Vegas, NV 89135
[phone]
[phone] (fax)

and Mrs. Humphries.

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Once they turn over the keys of the vehicles identified in paragraphs 4 and 5 to the

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Receiver, the Humphries have no responsibility to maintain these vehicles, pay

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taxes, insure them, or pay any other costs associated with any of these vehicles.

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7.

The Humphries have moved back into their home in Henderson, Nevada (the

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precise address is listed in the sealed assets list filed with the Court April 20, 2022;

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DKT 37). Mrs. Humphries and their four children have vacated the residence in

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Huntington Beach as promised by August 15, 2022 (the precise address is listed in

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the sealed assets list filed with the Court April 20, 2022; DKT 37) to live full-time

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in the Henderson house. The Humphries agree to turn over the keys and access to

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the house by no later than August 31, 2022. Once they turn over the keys to the

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Receiver, the Humphries have no responsibility to maintain the home, the

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mortgage, the taxes, the insurance or any other costs associated with the Huntington

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Beach house.

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8.

Mrs. Humphries’ parents have also moved into the Henderson house. Mr. and Mrs.

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Humphries have a homestead recorded against their Henderson house. The house

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is owned by the Humphries’ Living Trust. The Receiver and the SEC agree to

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permit the Humphries and their extended family to reside in this Henderson home

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for the time being in light of their cooperation and the large number of

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family members living in the Henderson house. If the Receiver or the SEC wants
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Case 2:22-cv-00612-CDS-EJY Document 310 Filed 09/15/22 Page 6 of 8

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the Humphries to leave the Henderson house, the SEC, the Receiver and the

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Humphries will meet and confer at least 60 days ahead of any requested date to

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leave to discuss the request. While they reside in the Henderson house, the

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Humphries agree to maintain insurance on the Henderson house, pay the property

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taxes, and pay the HOA fees.
9. The Humphries own a rental property in Hurricane, Utah (the precise address is

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listed in the sealed assets list filed with the Court April 20, 2022; DKT 37) which

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currently has a tenant residing in the property; the current lease expires in or about

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February 2022. The Humphries agree to cooperate with the Receiver and the SEC

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to turn over to the Receiver the Hurricane rental property so that the Receiver can

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sell it. It is not responsibility of the Humphries to pay the tenant or evict the tenant.

Greenberg Traurig, LLP
10845 Griffith Peak Drive, Suite 600
Las Vegas, NV 89135
[phone]
[phone] (fax)

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The Humphries agree to turn over the owner’s set of the keys to the Receiver by

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September 9, 2022. Once they turn over the keys to the Receiver, the Humphries

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have no responsibility to maintain the home, the taxes, the insurance or any other

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costs associated with the Hurricane house.

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10. Wells Fargo Bank froze the account of Nathan Hall (Account XXX0420; the full

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account number is listed in the sealed assets list filed with the Court April 20, 2022;

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DKT 37). Nathan Hall, who is Mrs. Humphries’ uncle, needs the funds and has

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supplied a declaration signed by Nathan Hall to the Receiver and the SEC. Within

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10 days of this Order, the monies in this Nathan Hall account shall be unfrozen and

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made available against to Mr. Hall. The account statements for this account shall

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not be subject to the requirements set forth below in paragraph 11.

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11.

Mr. Humphries and Mrs. Humphries must provide to counsel to the Commission

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and counsel to the Receiver, without further request or subpoena, their monthly

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account statements. These consist of (a) Jessica Humphries new checking account

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at Farmers & Merchants and her old Ally Bank account; (b) Christopher Humphries

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new checking account at Ally Bank; and (c) the Bug Raiders new checking account

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at East West Bank, for review and inspection by no later than the 5th of each month

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while this stipulation is in effect. The Humphries agree to provide the earlier

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Case 2:22-cv-00612-CDS-EJY Document 310 Filed 09/15/22 Page 7 of 8

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statements for these accounts from January 1, 2022 or opening of these new

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accounts (whichever is earlier) through the date of this stipulation.

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statements shall be provided to counsel to the Commission by email to Casey R.

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Fronk ([e-mail]) and Tracy S. Combs ([e-mail]).

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statements

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([e-mail]) and to his counsel Kara Hendricks

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([e-mail]).

Greenberg Traurig, LLP
10845 Griffith Peak Drive, Suite 600
Las Vegas, NV 89135
[phone]
[phone] (fax)

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12.

shall

also

be

provided

to

the

These

These
Receiver

To the extent Mr. Humphries and Mrs. Humphries earn additional, going-forward

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income that they demonstrate, to the satisfaction of counsel for the Commission

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and the Receiver, is unconnected to the conduct alleged in the Amended Complaint,

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such income may be used for the payment of necessary and reasonable living

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expenses and a portion of the civil and criminal attorney’s fees and defense costs

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needed for this Action and the pending parallel criminal investigation. As of the

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date of this stipulation, such income consists of the following:

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a. the income and other earnings of Jessica Humphries at her law firm in

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California that began on or about May 18, 2022 and future earnings at a law

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firm in Nevada after the August 2022 move back to Henderson; and

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b. the income and future earnings from the Bug Raiders Pest Control business.

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Case 2:22-cv-00612-CDS-EJY Document 310 Filed 09/15/22 Page 8 of 8

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Before October 31, 2022, the Humphries reserve the right to seek the release of additional
living expenses and housing expenses, and monies for attorneys’ fees and costs.
Dated: September 14, 2022.

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/s/Casey R. Fronk __________________
TRACY S. COMBS
CASEY R. FRONK
Attorneys for Plaintiff U.S. Securities and
Exchange Commission

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Dated: September 14, 2022.

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Defendant Christopher Humphries and relief
Defendant CJ Investments, LLC

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/s/ Kendelee Leascher Works_______________
PETER CHRISTIANSEN
KENDELEE WORKS

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CHRISTIANSEN TRIAL LAWYERS

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Greenberg Traurig, LLP
10845 Griffith Peak Drive, Suite 600
Las Vegas, NV 89135
[phone]
[phone] (fax)

U.S. SECURITIES AND EXCHANGE
COMMISSION

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Dated: September 14, 2022.

/s/ Pamela L. Johnston ___________________
FOLEY & LARDNER LLP
THOMAS CARLUCCI
PAMELA JOHNSTON
555 S. Flower Street, Suite 3300
Los Angeles, CA 90071

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Non-Party Jessica Humphries

Dated: September 14, 2022.

GREENBERG TRAURIG, LLP
By: Kara B. Hendricks___________________
KARA B. HENDRICKS
JASON K. HICKS
KYLE A. EWING
10845 Grifffith Peak Dr. Ste. 600
Las Vegas, NV 89135
Attorneys for Receiver Geoff Winkler
IT IS SO ORDERED:

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CRISTINA D. SILVA
UNITED STATES DISTRICT JUDGE
September 15, 2022
DATED: _________________________
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