Securities and Exchange Commission v. USA Real Estate Fund 1 Inc et al

Filing 68

FINAL JUDGMENT AS TO DEFENDANT USA REAL ESTATE FUND, INC. and DEFENDANT DANIEL F. PETERSON. Signed by Senior Judge Lonny R. Suko. (VR, Courtroom Deputy)

1 JINA L. CHOI (Admitted to N.Y. bar)

SUSAN F. LAMARCA (Admitted to Cal. bar)
[e-mail]
DAVID A. BERMAN (Admitted to N.Y. bar)
[e-mail]
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4 Attorneys for Plaintiff

SECURITIES AND EXCHANGE COMMISSION

5 44 Montgomery Street, 28th Floor

San Francisco, California 94104

6 Telephone: [phone]

Facsimile: [phone]

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UNITED STATES DISTRICT COURT

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FOR THE EASTERN DISTRICT OF WASHINGTON

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12 SECURITIES AND EXCHANGE

Case No. 13-cv-157-LRS

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FINAL JUDGMENT AS TO
DEFENDANT USA REAL
ESTATE FUND, INC. and
DEFENDANT DANIEL F.
PETERSON

COMMISSION,

Plaintiff,

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v.

16 USA REAL ESTATE FUND 1, INC. and
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DANIEL F. PETERSON,
Defendants.

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This matter came before the Court on Plaintiff Securities and Exchange

2 Commission’s (the “Commission” or the “SEC”) Motion for Default Judgment as to
3 Defendant USA Real Estate Fund 1, Inc. (“USA Fund”) and for Final Judgment as
4 to Daniel F. Peterson. Based upon the submissions of the parties, the materials in the
5 record, and good cause appearing therefrom, the Court finds:
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1.

Defendant USA Fund is in default and the Clerk is directed to enter

7 defendant USA Fund’s default.
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2.

The Commission has demonstrated that a default judgment against

9 Defendant USA Fund is appropriate, and on this basis, the Court finds that
10 defendant USA Fund violated Section 10(b) of the Securities Exchange Act, 15
11 U.S.C. § 78j(b), and Exchange Act Rule 10b-5, 17 C.F.R. § 240.10b-5, and Section
12 17(a) of the Securities Act, 15 U.S.C. § 77q(a), as alleged in the complaint. The
13 SEC’s motion for default judgment is therefore GRANTED.
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3.

The Commission has also demonstrated that, unless restrained or

15 enjoined, defendants have each engaged in, and are both likely again to engage in,
16 transactions, acts, practices and courses of business which constitute violations of
17 the federal securities laws, namely Section 10(b) of the Exchange Act and Rule 10b18 5, and Section 17(a) of the Securities Act. Accordingly, after considering the
19 appropriate equitable considerations and giving weight to the public’s interest, the
20 SEC’s motion for final judgment against Defendant Peterson, and the motion for
21 default judgment against Defendant USA Fund, ECF No. 60, are hereby
22 GRANTED.
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IT IS THEREFORE ORDERED:

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I.
Defendant Daniel F. Peterson, his agents, servants, employees, attorneys, and

27 those persons in active concert or participation with any of them, who receive actual
28 notice of this Final Judgment, by personal service or otherwise, and each of them,
FINAL JUDGMENT - PAGE 1

NO. 13-CV-157-LRS

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are permanently restrained and enjoined from directly or indirectly participating in

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the issuance, offer, or sale of any security of USA Real Estate Fund 1, Inc. and its

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subsidiaries.
II.

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Defendant Daniel F. Peterson, his agents, servants, employees, attorneys, and

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those persons in active concert or participation with any of them, who receive actual

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notice of this Final Judgment, by personal service or otherwise, and each of them,

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are permanently restrained and enjoined from directly or indirectly soliciting any

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person or entity to purchase or sell any security.
III.

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Defendant Daniel F. Peterson and USA Real Estate Fund 1, Inc., and each of

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their respective agents, servants, employees, attorneys, and those persons in active

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concert or participation with any of them, who receive actual notice of this Final

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Judgment, by personal service or otherwise, and each of them, are permanently

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restrained and enjoined from directly or indirectly, by the use of any means or

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instrumentality of interstate commerce, or of the mails, or of any facility of any

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national securities exchange:

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a.

employing any device, scheme, or artifice to defraud;

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b.

making any untrue statement of a material fact or omitting to state a

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material fact necessary in order to make the statements made, in the light of

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the circumstances under which they were made, not misleading; or

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c.

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would operate as a fraud or deceit upon any person;

engaging in any act, practice, or course of business which operates or

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in connection with the purchase or sale of any security, in violation of Section 10(b)

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of the Securities Exchange Act of 1934, 15 U.S.C. § 78j(b), and Exchange Act Rule

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10b-5, 17 C.F.R. § 240.10b-5.
IV.

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Defendant Daniel F. Peterson and USA Real Estate Fund 1, Inc., and each of

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their respective agents, servants, employees, attorneys, and those persons in active

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concert or participation with any of them, who receive actual notice of this Final

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Judgment, by personal service or otherwise, and each of them, are permanently

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restrained and enjoined from, in the offer or sale of any securities, by the use of any

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means or instruments of transportation or communication in interstate commerce or

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by the use of the mails, directly or indirectly:

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1.

employing any device, scheme, or artifice to defraud;

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2.

obtaining money or property by means of any untrue statement of a

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material fact or any omission to state a material fact necessary in order to

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make the statements made, in light of the circumstances under which they

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were made, not misleading; or

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3.

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operates or would operate as a fraud or deceit upon the purchaser;

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in violation of Section 17(a) of the Securities Act of 1933, 15 U.S.C. § 77q(a).

engaging in any transaction, practice, or course of business which

V.

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IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that Defendant

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Daniel F. Peterson and USA Real Estate Fund 1, Inc., and each of them, are jointly

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and severally liable for disgorging ill-gotten gains $435,495, together with

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prejudgment interest thereon in the amount of $1,394.70, for a total disgorgement of

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$436,889.70. Defendants shall make payment of the total amount within thirty (30)

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days by certified check, bank cashier’s check, or United States postal money order

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payable to the Securities and Exchange Commission and shall be delivered or

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mailed to the Office of Financial Management, Securities and Exchange

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Commission, Operations Center, 6432 General Green Way, Mail Stop 0-3,

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Alexandria, Virginia 22312, and shall be accompanied by a letter identifying

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Defendant Daniel F. Peterson or USA Real Estate Fund 1, Inc. as a defendant in this

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action; setting forth the title and civil action number of this action and the name of

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this Court; and specifying that payment is made pursuant to this Final Judgment.

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Defendants shall pay post-judgment interest on any delinquent amounts pursuant to

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28 USC § 1961. The Commission shall remit the funds paid pursuant to this

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paragraph to the United States Treasury.
VI.

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IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that Defendant

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Daniel F. Peterson shall pay a civil penalty in the amount of $105,000.00 pursuant to

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Section 21(d) of the Exchange Act [15 U.S.C. § 78u(d)] and Section 20(d) of the

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Securities Act [15 U.S.C. § 77t(d)]. Defendant shall make this payment within

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thirty (30) business days after entry of this Final Judgment by certified check, bank

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cashier’s check, or United States postal money order payable to the Securities and

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Exchange Commission. The payment shall be delivered or mailed to the Office of

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Financial Management, Securities and Exchange Commission, Operations Center,

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6432 General Green Way, Mail Stop 0-3, Alexandria, Virginia 22312, and shall be

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accompanied by a letter identifying Daniel F. Peterson as a defendant in this action;

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setting forth the title and civil action number of this action and the name of this

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Court; and specifying that payment is made pursuant to this Final Judgment.

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Defendant shall pay post-judgment interest on any delinquent amounts pursuant to

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28 USC § 1961. The Commission shall remit the funds paid pursuant to this

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paragraph to the United States Treasury.
VII.

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IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that Defendant

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USA Real Estate Fund 1, Inc. shall pay a civil penalty in the amount of $105,000.00

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pursuant to Section 21(d) of the Exchange Act [15 U.S.C. § 78u(d)] and Section

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20(d) of the Securities Act [15 U.S.C. § 77t(d)]. Defendant shall make this payment

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within thirty (30) business days after entry of this Final Judgment by certified check,

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bank cashier’s check, or United States postal money order payable to the Securities

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and Exchange Commission. The payment shall be delivered or mailed to the Office

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of Financial Management, Securities and Exchange Commission, Operations Center,

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6432 General Green Way, Mail Stop 0-3, Alexandria, Virginia 22312, and shall be

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accompanied by a letter identifying USA Real Estate Fund 1, Inc. as a defendant in

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this action; setting forth the title and civil action number of this action and the name

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of this Court; and specifying that payment is made pursuant to this Final Judgment.

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Defendant shall pay post-judgment interest on any delinquent amounts pursuant to

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28 USC § 1961. The Commission shall remit the funds paid pursuant to this

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paragraph to the United States Treasury.

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The Clerk of the Court is directed to enter this order, forward copies to
counsel of record and CLOSE THE FILE.

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Dated this 12th day of September, 2014.

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s/Lonny R. Suko
_____________________________
LONNY R. SUKO
United States District Judge

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NO. 13-CV-157-LRS