US Commodity Futures Trading Commission v. Simmons et al

Filing 89

CONSENT ORDER TO PERMIT THE SALE OF CERTAIN REAL PROPERTY LOCATED AT 459 ORCHARD DRIVE IN GRANVILLE, OHIO. Signed by Chief Judge Robert J. Conrad, Jr on 10/7/11. (gpb)

UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF NORTH CAROLINA
CHARLOTTE DIVISION

U.S. COMMODITY FUTURES TRADING
COMMISSION,
Plaintiff,
v.
Keith F. Simmons et al.,
Defendants, and
Lawrence Salazar et al.,
Relief Defendants.

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CONSENT ORDER TO PERMIT THE SALE OF CERTAIN REAL PROPERTY
LOCATED AT 459 ORCHARD DRIVE IN GRANVILLE, OHIO
On January 13, 2011, Plaintiff U.S. Commodity Futures Trading Commission
(“Commission”) filed its Complaint for Injunctive Relief, Civil Monetary Penalties, and Other
Equitable Relief in the instant matter. Jonathan Davey and Divine Circulation Services, LLC,
Safe Harbor Ventures, Inc., Safe Harbor Wealth Investments, Inc., Divine Stewardship, LLC,
Safe Harbor Wealth, Inc., and Sovereign Grace, Inc. (collectively, “Davey and the Davey
Entities”) are named defendants and/or relief defendants in the matter. Shiloh Estate, LLC
(“Shiloh”), which is the owner of certain real property located at 459 Orchard Drive, Granville,
Ohio (hereinafter, the “Orchard Drive Property”), is also a named relief defendant in the matter.
On February 11, 2011, the Court entered a Statutory Restraining Order (“SRO”) which,
among other things, froze the assets of all named defendants and relief defendants.

On February 23, 2011, the Commission, the United States, by and through the United
States Attorney for the Western District of North Carolina, Davey and the Davey Entities, and
Thaddeus Claggett and Claggett & Sons, Inc. and Shiloh (collectively, “Claggett and the
Claggett Entities”) filed a Consent Order and Agreement to permit the sale of the Orchard Drive
Property under certain enumerated conditions; however, the sale anticipated under the Consent
Order and Agreement was never consummated and the Consent Order and Agreement was never
entered by the Court.
On March 15, 2011, the Court granted the motion of the United States, by and through
the United States Attorney for the Western District of North Carolina, to intervene in the matter
and to stay civil discovery.
On March 30, 2011, the Court entered a Consent Order of Preliminary Injunction and
Other Equitable Relief (“PI Order”) against Davey and the Davey Entities and Shiloh, among
others. Among other provisions, the PI Order ordered that the SRO shall remain in full force and
effect until further order of this Court, with the exception of certain provisions relating to
discovery. As a result, the freeze on Shiloh’s assets continues.
The Commission, the United States, by and through the United States Attorney for the
Western District of North Carolina, Davey and the Davey Entities, and Claggett and the Claggett
Entities hereby consent to this order amending the PI Order to permit the sale of the Orchard
Drive property. Davey and the Davey Entities and Shiloh affirm that no promises, coercion, or
threats of any kind have been made by the Commission, or by any representative of the
Commission, in consideration of this Consent Order, and that they enter into this Consent Order
freely, knowingly, and willfully.

THE PARTIES AGREE AND IT IS HEREBY ORDERED that:
The PI Order entered by this Court on March 30, 2011, shall be amended as follows:
1.

The Orchard Drive Property is held and/or was held by Davey and the Davey

Entities, who purported to sell the property to Claggett and the Claggett Entities. This
transaction between Davey and the Davey Entities and Claggett and the Claggett Entities is
subject to further scrutiny by both the Commission in this civil action and the United States its
criminal action. Regardless of the nature of the underlying transaction(s) between Claggett and
the Claggett Entities and Davey and the Davey Entities, the parties agree that a contract for the
sale of the Orchard Drive Property should be allowed to go forward under the terms and
conditions set forth herein.
2.

The parties hereto agree that Claggett and the Claggett Entities shall be permitted

to pursue the sale of the Orchard Drive Property to a third party purchaser. Any such sale shall
be subject to a written agreement between the parties to this Consent Agreement.
3.

In the event any such sale is consummated, the parties agree that the “proceeds of

the sale” of Orchard Drive Property should be held in the Registry of the Court pending either
voluntary resolution of the parties’ disputes regarding such proceeds, or further order of the
Court regarding same.
4.

Pursuant to Paragraph 3 above, the Clerk of the Court is hereby ordered to deposit

the “proceeds of sale” into an interest-bearing account in the Court’s Registry pending either
voluntary resolution of the parties’ disputes regarding such proceeds, or further order of the
Court regarding same. 1Upon receipt of the funds, the Clerk of the Court, as soon as the
business of his office allows, shall place the funds in an interest-bearing account at the prevailing

rate of interest. The United States shall serve a copy of this Order upon the Clerk of Court
and/or the Financial Deputy Clerk.
5.

As to any sale of the Orchard Drive Property, the parties hereto agree that the

“proceeds of sale” for purposes of this Order shall be the “net proceeds” (line 603 “Cash to
Seller” of the HUD-1 Settlement Statement) less the total amount of Cognovit Notes outstanding
at the time of sale, materials and subcontractors bills outstanding at the time of sale, and
Cognovit Notes paid prior to the time of sale. Calculation of Cognovit Notes outstanding at the
time of sale, materials and subcontractors bills outstanding at the time of sale, and Cognovit
Notes paid prior to the time of sale shall occur as follows: Prior to the execution of any contract
or occurrence of any scheduled auction to sell the Orchard Drive Property, Claggett and the
Claggett Entities shall provide the Commission and the United States with any and all requested
information concerning the proposed sale or scheduled auction, including documentation
concerning Cognovit Notes outstanding at the time of sale, materials and subcontractors bills
outstanding at the time of sale, and Cognovit Notes paid prior to the time of sale.
6.

Following their review of the aforementioned information, the Commission and

the United States shall state in writing whether they agree with Claggett and the Claggett
Entities’ calculation of what the “proceeds of sale” for purposes of this Order shall be; and
whether they agree that the proposed sale appears to be at arm’s length and reasonable (or, in the
case of an auction, that the scheduled auction will not result in the sale of the property below an
agreed-upon amount). Upon the issuance of such written statements, Claggett and the Claggett
Entities shall be permitted to carry out the sale of the Orchard Drive Property.

7.

The “proceeds of sale,” upon disbursement to Claggett and the Claggett Entities,

shall be immediately transferred to the Clerk of Court, as directed elsewhere in this Consent
Agreement.
8.

Except as amended herein, the PI Order entered March 30, 2011 shall remain in

full force and effect until further order of this Court.
Signed: October 7, 2011

____________________________________

ANNE M. TOMPKINS
UNITED STATES ATTORNEY

FOR THE CFTC

___________________________
Kurt W. Meyers
DC Bar Number: 490500
Mark T. Odulio
State Bar of Maryland
Jennifer A. Youngs
North Carolina Bar Number 23925
Benjamin Bain-Creed
Florida Bar Number 10021436
Assistant United States Attorneys
United States Attorney’s Office
227 West Trade Street, Suite 1650
Charlotte, North Carolina 28202
Telephone: [phone]
Fax: [phone]
E-mail: [e-mail]

________________________
Alan Edelman
Senior Trial Attorney
Anne M. Termine
Chief Trial Attorney
James H. Holl, III
Chief Trial Attorney
1155 21st Street, N.W.
Washington, D.C. 20581
Telephone: [phone]
Fax: [phone]
E-mail: [e-mail]

FOR JONATHAN DAVEY, DIVINE CIRCULATION
SERVICES, LLC, SAFE HARBOR VENTURES, INC.,
SAFE HARBOR WEALTH INVESTMENTS, INC.,
DIVINE STEWARDSHIP, LLC, SAFE HARBOR
WEALTH, INC., AND SOVEREIGN GRACE, INC.

FOR THADDEUS
CLAGGETT, SHILOH
ESTATE, LLC, AND
CLAGGETT & SONS, INC.

_____________________________
Jonathan Davey

_______________________
Thaddeus Claggett

______________________________
E. Fitzgerald Parnell, III, Esq.
Joseph Edward Zeszotarski, Jr., Esq.
Poyner & Spruill
One Wachovia Center, Suite 2300
301 College Street
Charlotte, NC 28202
Telephone: 704.342.525
Fax: [phone]
E-mail: [e-mail]

_______________________
Jacob H. Sussman, Esq.
Tin Fulton Walker & Owen
301 Park Avenue
Charlotte, NC 28203
Telephone: [phone]
Fax: [phone]
E-mail: [e-mail]

CERTIFICATE OF SERVICE
I hereby certify that on this the 19th day of September, 2011, the foregoing document
was served on the opposing parties in this action via ECF filing to:
Alan Edelman
[e-mail]

Joseph H. Nanney , Jr.
[e-mail]

Douglas Michael Beard
[e-mail]

James H. Holl , III
[e-mail]

E. Fitzgerald Parnell, III
[e-mail]

Jacob H. Sussman
[e-mail]

Joseph E. Zeszotarski Jr.
Michael F. Copley
[e-mail] [e-mail]

Additionally, this document was served via email on the opposing parties via their
counsel to:
Brian Bieber
[e-mail]

Rick Winiker, III
[e-mail]

Finally, this document was served via U.S. mail to Defendant Simmons at the following
address:
Keith Franklin Simmons
PID 0000385655
P.O. Box 34429
Charlotte, N.C. 28234-4429
/s/ Jacob H. Sussman
Counsel for Thaddeus Claggett, Shiloh
Estate, LLC, and Claggett & Sons,
Inc.