Securities and Exchange Commission v. Ryan et al

Filing 101

MEMORANDUM-DECISION AND ORDER granting the 90 Motion to Intervene and modifying the Court's 11 Order as stated. Signed by Judge Norman A. Mordue on 10/5/2012. (amt) [Deft served via reg. mail]

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF NEW YORK
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SECURITIES AND EXCHANGE COMMISSION,
Plaintiff,
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1:10-CV-513 (NAM/RFT)

MATTHEW JOHN RYAN and PRIME RATE AND
RETURN, LLC, individually and doing business as
AMERICAN INTEGRITY FINANCIAL CO.,
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Defendants,
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UNITED STATES OF AMERICA and COLLEEN
RYAN,
Intervenors.
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CAPITAL COMMUNICATIONS FEDERAL CREDIT
UNION,
Proposed Intervenor.
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APPEARANCES:

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U.S. Securities & Exchange Commission
Kristine M. Zaleskas, Esq., of counsel
Preethi Krishnamurthy, Esq., of counsel
Steven G. Rawlings, Esq., of counsel
3 World Financial Center
New York, New York 10281
Attorneys for Plaintiff
Matthew John Ryan
Defendant, Pro Se
Paul A. Levine, Esq.
Lemery Greisler LLC
50 Beaver Street
Albany, New York 12207
Receiver for Defendant Prime Rate and Return, LLC

Office of United States Attorney
Thomas A. Capezza, Assistant United States Attorney
218 James T. Foley United States Courthouse
445 Broadway
Albany, New York 12207
Attorney for Intervenor United States of America
Pattison, Sampson, Ginsberg & Griffin, PC
Jonathan G. Schopf, Esq., of counsel
22 First Street, P.O. Box 208
Troy, New York 12181
Attorney for Intervenor Colleen Ryan
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Carter, Conboy, Case, Blackmore, Maloney & Laird, PC
Edward M. Connell, Esq., of counsel
20 Corporate Woods Boulevard
Albany, New York 12211
Attorney for Proposed Intervenor Capital Communications
Federal Credit Union

Hon. Norman A. Mordue, U.S. District Judge:
MEMORANDUM-DECISION AND ORDER
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On February 13, 2008, for the purpose of securing the payment to Capital
Communications Federal Credit Union (“CCFCU”) of $95,000, defendant Matthew J. Ryan
(“Ryan”), executed, acknowledged and delivered to CCFCU a promissory note, real property
mortgage and assignment of rents in real property owned by Ryan at 190 Delaware Avenue,
Albany, New York 12205. Ryan has defaulted on his obligations under the promissory note and

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mortgage.
CCFCU moves (Dkt. No. 90) for an order granting leave to intervene in this action for
the limited purpose of seeking modification of the June 7, 2010 Stipulation and Consent Order
(Dkt. No. 11), to permit CCFCU to enforce the assignment of rents contained in the mortgage
and commence a mortgage foreclosure action in New York State Supreme Court. CCFCU is
presently prohibited from taking any action to enforce its rights in the subject property by the

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terms of the June 7, 2010 Stipulation and Consent Order, which, inter alia, imposed a
preliminary injunction and froze all assets of Ryan and Prime Rate and Return, LLC. The Court
had previously issued a temporary restraining order (Dkt. No. 6) in which it appointed Paul A.
Levine, Esq., as receiver of all assets of Prime Rate and Return, LLC.
CCFCU seeks the instant relief on the ground that any right of the receivership estate to
the mortgaged property is subordinate to CCFCU’s mortgage lien and there is no equity in the
mortgaged premises. CCFCU states that, to the extent any equity remains from the sale of the
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mortgaged premises following a state court foreclosure proceeding, the receiver may participate
in surplus funds proceedings on behalf of the receivership estate.
The receiver responds (Dkt. No. 91), stating that he does not oppose the motion, because
it furthers his efforts to wind up the disposition of assets in this case. He explains that he has
determined that there is no equity in the mortgaged premises, and further that, since the
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mortgaged premises are held in Ryan’s name, the criminal forfeiture order in the criminal case
against Ryan (United States v. Ryan, 1:10-CV-319, Dkt. Nos. 26, 28, 31) is an “irreconcilable
cloud” on the title. He requests that the motion be granted.
Plaintiff Securities Exchange Commission responds. It does not object (Dkt. No. 95).
Ryan opposes the motion (Dkt. No. 97). He believes there are obstacles to CCFCU’s
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proceeding with the mortgage foreclosure. He also states that if a foreclosure proceeding is
brought in state court, he will remove it to federal court. These issues do not warrant denial of
CCFCU’s motion.
It is therefore
ORDERED that the motion (Dkt. No. 90) by Capital Communications Federal Credit
Union to intervene is granted; and it is further
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ORDERED that the June 7, 2010 order (Dkt. No. 11) is modified to the limited extent of
allowing the intervenor to enforce the assignment of rents contained in the mortgage on real
property owned by Matthew J. Ryan at 190 Delaware Avenue, Albany, New York 12205, and
to commence an action for the foreclosure of the mortgage against said real property in the New
York State Supreme Court; and it is further
ORDERED that the Clerk of the Court is directed to serve copies of this MemorandumDecision and Order in accordance with the Local Rules of the Northern District of New York.
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IT IS SO ORDERED.
Date: October 5, 2012
Syracuse, New York

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