Unites States v. Pokerstars, et al

Filing 307

STIPULATION AND ORDER OF SETTLEMENT IN REGARD TO ROBB EVANS: 1. The FDIC shall immediately transfer funds from the Sunfirst Accounts as follows: (1). $6,812,227.82 to a seized asset account operated by the United States Marshal Service, and (2)$6,812,227.82 to the Claimant Robb Evans. 2. Wells Fargo shall immediately transfer to a seized asset account operated by the U.S. Marshals all funds in its possession that are, or were, held on deposit in the Wells Fargo Triple Seven Account or the Wells Fargo Kombi Capital Account. 3. The Government is hereby authorized to seize and take possession of the funds held in the Cyprus Triple Seven Account and the Cyprus Golden Shores Account. 4. Upon receipt of such funds set forth in paragraphs 2 and 3, the Government shall transfer to the Claimant fifty percent of the total assets obtained from the Wells Fargo Triple Seven Account, the Cyprus Triple Seven Account, and the Wells Fargo Kombi Capital Account (together with the funds transferred by the FDIC to the Claimant pursuant to Paragraph 1, the "Claimant Funds"). And as set forth herein. SO ORDERED. (Signed by Judge Kimba M. Wood on 7/25/2013) (ama)

UNITED STATES DISTRICf COURT
SOUTHERN DISTRICf OF NEW YORK

UNITED STATES OF AMERICA,
Plaintiff,

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USDSSDNY
DOCUMENT
ELECTRONICALLY FILED
DOC#: ______~~~_
DATE FILED: 7
113

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STIPULATION AND ORDER
OF SETILEMENT IN REGARD
TO ROBB EVANS

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POKERSTARS, et al.,
Defendants;
ALL RIGHT, lTfLE AND INTEREST IN
THE ASSETS OF POKERSTARS, et a1.,
Defendants-in-rem.

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II Civ. 2564 (KMW)

WHEREAS, on or about April 14. 2011, a verified complaint, 11 Civ. 2564 (LBS) (the
"Complaint") was filed under seal in the United States District Court for the Southern District of
New York seeking the forfeiture ofcertain property pursuant to Title 18. United States Code,
Sections 1955(d), 981(a)(I)(A), and 981 (a)(I)(C) ("Forfeiture Action");
WHEREAS, included in such property were all funds held on deposit in the following
accounts:
Account numbered 12900584 held at Sunfirst Banl. Sl George, Utah, formerly in the
name ofSunfirst Bank ITF Powder MonkeysIFull Tilt, now in the name of Sunfirst Bank, and all
funds traceable thereto ("Account 1j;
Account numbered 129000576 on deposit at Sunfirst Bank., S1. George, Utah, formerly in
the name ofSunfirst Bank ITF Mastery MerchantIPstars, now in the name ofSunfirst Bank., and
all funds traceable thereto ("Account 2");
Account numbered 121015408 held at 8unfirst Bank, 81. George, Utah, in the name of
Triple Seven LP dIbIa Netwebfunds.com. and all funds traceable thereto ("Account 3");

Account numbered 1210] 5390 held at Sunfirst Bank. Sl George, Utah. in the name of
Triple Seven LP d/b/a A WEB DEBIT, and all funds traceable thereto ("Account 4j;
Account numbered 5510045221 held at Wells Fargo, NA., in the name of Triple Seven
L.P., and all funds tnJceable thereto ("Account 5");
Account numbered CYI211501 00 1065983USDCACC002 held at FBME Bank Lill,
Cyprus, in the name of Triple Seven Inc., and all funds traceable thereto ("Account 6");
Account numbered 7478010312 held at Wells Fargo, N.A., in the name of Kombi
Capital, and all funds traceable thereto ("Account r);
Account numbered 27351910081015 held at Societe Generale Cyprus LTD, Cyprus, in
the name ofGolden Shores Properties Limited. and all funds traceable thereto ("Account 8,,);
(Accounts 1·8 collectively, the "Defendant Accounts"; the funds in, or traceable to, the
Defendant Accounts, "the Defendant Funds"; Accounts 1-4 together, the "Sunfirst Accounts";
Account 5, "the Wells Fargo Triple Seven Account"; Account 6, the "Cyprus Triple Seven
Account"; Account 7, the "Wells Fargo Kombi Capital Account"; and Account 8, the "Cyprus
Golden Shores Account").
WHEREAS, the Federal Deposit and Insurance Commission (the "FDIC") currently
maintains the funds that were held in the Sunfirst Accounts;
WHEREAS, the FDIC has represented that it maintains funds in the aggregate amount 0

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$13,624,455.64 that were held in the Sunfirst Accounts; with $8,495,522.22 from Account I.
$5,112,102.97 from Account 2, $9,025.26 from Account 3, and $7,805.19 from Account 4;
WHEREAS, beginning on May 17, 2011, and for thirty consecutive days thereafter.
pursuant to Rule G (4) (a) of the Supplemental Rules for Certain Admira1ty and Maritime Claims
and Asset Forfeiture Actions, plaintiff United States of America posted notice ofthe Verified
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Complaint against the defendants-in-~ on www.forfeiture.gov. the government internet site,
and proof of publication was filed with the Clerk of the Court on November 22, 20 II;
WHEREAS, on or about October 5, 2011. Robb Evans ofRobb Evans and Associates
LLC ("Robb Evans" or "Claimant"), a receiver appointed by the United States District Court for
the District of Nevada in the action Federal Trade Commission v. Jeremy JohnWtt. 2:10 Civ.
2203-MMD-GWF) (D. Nev. 2010) (the "FTC Action"), filed a verified claim for the Defendant
Funds asserting an ownership in said property;
WHEREAS. the Claimant was tasked as receiver in the FTC Action to take possession of,
and maintain the assets of, Jeremy Johnson and a number of corporate entities in order to assure
that such assets are available for restitution to victims of Johnson's alleged internet fraud scheme
as set forth in the FTC Action;
WHEREAS, included within the scope ofthe Claimant's receivership are all assets of
Kombi Capital LP, Mastery Merchant, LLC, Powder Monkeys, LLC, Triple Seven LPILLC. and
Triple Seven, Inc. (collectively, the "Receivership Entities");
WHEREAS, on or about September 21,2011, a verified amended complaint (the
"Amended Complaint") in the Forfeiture Action was filed seeking the forfeiture of, inter alia, th '
Defendant Funds;
WHEREAS, on or about September 10,2012, a verified second amended complaint (the
"Second Amended Complaint") in the Forfeiture Action was filed seeking the forfeiture of, inter
alia, the Defendant Funds;
WHEREAS, the Claimant represents that, in his capacity as receiver in the FTC Action,
he believes that he will have separately collected funds sufficient to cover costs and fees relating
to the Claimant's work as receiver and that most, ifnot all, funds collected from the Defendant

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Accounts will therefore be utilized to provide restitution for victims of the internet fraud scheme
alleged in the FTC Action and payment on allowed creditor claims. in connection with a claims
allowance and distribution procedure to be administered by Claimant and/or a distribution
procedure to be managed by the FTC;
WHEREAS, the Government and the Claimant have agreed to settle this matter; therefore
IT IS HEREBY STIPULATED, ORDERED AND AGREED, by and between Plaintiff
United States of America (the "Government"), by its attorney Preet Bharara, United States
Attorney, Assistant United States Attorneys, Sharon Cohen Lev:in. Michael D. Lockard, Jason H.
Cowley, and Christine I. Magdo, ofcounsel, and the Claimant, by his counsel, McKenna Long &

Aldridge LLP by Gary Caris, Esq., that:
1.

The FDIC shall immediately transfer funds from the Sunfirst Accounts as follows:

(t) $6,812;2.27.82 to a seized asset account operated by the United States Marshal Service, and

(2) $6,812;2.27.82 to the Claimant Robb Evans.
2.

Wells Fargo shall immediately transfer to a seized asset account operated by the

U.S. Marshals all ftmds in its possession that are, or were, held on deposit in the Wells Fargo
Triple Seven Account or the Wells Fargo Kombi Capital Account.
3.

The Government is hereby authorized to seize and take possession of the funds

held in the Cyprus Triple Seven Account and the Cyprus Golden Shores Account.
4.

Upon receipt of such funds set forth in paragraphs 2 and 3, the Government shall

transfer to the Claimant ftfty percent of the total assets obtained from the Wells Fargo Triple
Seven Account, the Cyprus Triple Seven Account, and the Wells Fargo Kombi Capital Account
(together with the funds transferred by the FDIC to the Claimant pursuant to Paragraph I, the
"Claimant Funds").
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5.

The remaining funds obtained by the Government from the Defendant Accounts

(the "'Forfeited Funds") shall be forfeited to the United States for disposition according to law,
pursuant to Title 18, United States Code, Section 981.
6.

Upon a notification filed by the Claimant in the Forfeiture Action that an order

has been obtained in the FTC Action which provides that the FTC is the prevai ling party such

that the Claimant and/or the FTC can undertake distribution to victims of the internet fraud
scheme aUeged in the FTC Action and to other creditors with allowed claims in the FTC Action,
the Claimant shall have clear title to the Claimant Funds. In the event that a final and non­
appealable order is issued in the FTC Action which provides that the FTC is not the prevailing
party such that the Claimant and/or the FTC cannot undertake distribution to victims and other

creditors in the FTC Action. the Claimant shall file a notification ofsuch in the Forfeiture
Action, and upon such notification. the Claimant Funds shall be transferred to a seized asset
account maintained by the United States Marshall Service and shall be forfeited to the United
States for disposition according to law, pursuant to Title 18, United States Code, Section 981,
The Claimant shall not be required to retmn any interest generated from the Claimant Funds
while in the possession ofthe Claimant.
7.

The Claimant's claim to the funds in Cyprus Golden Shores Account is hereby

dismissed with prejudice.
8.

Upon the Claimant's receipt of Claimant Funds, the Claimant's claim for the

Forfeited Funds shall be deemed to be dismissed with prejudice.
9.

Upon the Claimant obtaining clear title to the Claimant Funds, the Claimant's

claim in this action shall be deemed fully and finally satisfied.

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10.

The Claimant is bereby barred from asserting any claim against the United States

or any of its agents and employees (includiJl& without limitation, the Federal Bureau of
Investigation ("'FBr) and the United States Attorney's Office for the Southern District of New
York ("USAO-SDNY"» in connection with or arising out of the United States' seizure, restraint,
and/or constructive possession of the Defendant Funds, including, without limitation. any claim
that the United States did not have probable cause to seize and/or forfeit the Defendant Funds
(including the Forfeited Funds), that the Claimant is a prevailing party or that the Claimant is
entitled to attorneys' fees or any award of interest.
11.

The Government is hereby barred from asserting any claim to any property. assets

or funds presently in the actual possession of Claimant in connection with the FTC Action as of
the date of the entry of the Stipulation and Order.
12.

The Claimant hereby agrees that it shall not file any claim or petition for

restoration or remission relative to the Forfeited Funds, or any action or motion seeking to
collaterally attack the seizure, restraint, or forfeiture of the Forfeited Funds. Furthennore. the
parties hereby waive all rights to appeal or to otherwise challenge or contest the validity of this
Stipulation and Order of Settlement
13.

Each party shall bear its own costs and attorneys' fees.

14.

The signature pages of this Stipulation and Order may be executed in one or more

counterparts. each of which will be deemed an original but all of which together will constitute
one and the same instrument. Signature pages may be by fax or electronic transmission and such
signatures shall be deemed as valid originals.
15.

In the event that the Claimant learns that the amount that the FDIC currently holds

relating to the Sunfirst Accounts (the ··Actual Amount") is less than the amount represented by

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the FDIC and set forth in this Stipulation and Order (the "Represented Amount"), and the
Represented Amount exceeds the Actual Amount by $10,000 or more, the Claimant, within ten
days of learning that the Represented Amount exceeds the Actual Amount by $10,000 or more,

shall file a notice (the "Discrepancy Notice,,) in the Forfeiture Action setting forth the Actual
Amount. Within ten days of the filing of the Discrepancy Notice, either party may file a
withdrawal notice stating that as a result of such discrepancy that party no longer wishes to enter
into this agreement and the Stipulation and Order shall become null and void. If neither party
timely files such withdrawal notice, the Stipulation and Order shall remain in full force and
effect, and in such event the FDIC shall immediately transfer 50010 of the Actua1 Amount to the
United States Marshal Service and 50% of the Actua1 Amount to the Claimant Robb Evans. If
the Actual Amount differs from the Represented Amount, but the Represented Amount does not
exceed the Actual Amount by $10,000 or more, then in such event the FDIC shall immediately
transfer 50% of the Actual Amount to the United States Marshal Service and 50% of the Actual
Amount to the Claimant Robb Evans.

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16.

After entry ofthe Stipulation and Order, the Claimant, who was appointed as a

receiver in the FfC Action by the United States District Court for the District ofNevada (the
"Nevada Court"), shall submit this Stipulation and Order for approval to the Nevada Court. In
the event that the Nevada Court does not approve ofthe Claimant's entry into this Stipulation
and Order. this Stipulation and Order shall become null and void and the Defendant Funds shall
be returned to, and maintained in. a seized asset account maintained by the United States

Marshal Service pending disposition of this matter.
AGREED AND CONSENfED TO:
PREET BHARARA
United States A

Southern Di .
By:

Cowley
stine I. Magdo
t United States Attorneys

One t. Andrew's Plaza

New York. New York 10007

(212) 637-] 060121931247912297
mI61[l;:n.

[ADDITIONAL SIGNATURES ON FOLLOWING PAGE]

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By:
Caris, Esq.
Me
Long &. Aldridge LLP
300 South Grand Avenue 14th Floor
Los Angeles., CA 90011
Tel: [phone]
Attorney for Claimant

SO ORDERED:

THE HONORABLE KIMBA W. WOOD
UNITED STATES DISTRICT JUOOE