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Securities and Exchange Commission v. Vassallo

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF CALIFORNIA SACRAMENTO


April 20, 2010

SECURITIES AND EXCHANGE COMMISSION, PLAINTIFF
v.
ANTHONY VASSALLO, ET AL, DEFENDANTS.

The opinion of the court was delivered by: Judge Lawrence K. Karlton

ORDER DIRECTING WELLS FARGO TO FREEZE USR SITE ACQUISITION, LLC SAVINGS ACCOUNT PENDING FURTHER COURT ORDER

On April 30, 2009, this Court filed the Order Appointing Temporary Receiver for Equity Investment Management and Trading, Inc. ("EIMT") and Order to Show Cause for Appointment of Permanent Receiver ("OAR") and on July 31, 2009, the Court filed an Order permanently appointing Receiver. Pursuant to the OAR, for good cause shown, and in order to empower and authorize the Receiver to carry out his duties and obligations,

THE COURT HEREBY FINDS AND ORDERS AS FOLLOWS:

On November 7, 2007, and November 8, 2007, $2,000,000 of EIMT investor funds were transferred to Jeff Dennis Ferentz (a California attorney) and/or Jeff Dennis Ferentz, Inc. (collectively "Ferentz"), in connection with a "bank sanctioned high yield project funding program." The funds were deposited into the Jeff Dennis Ferentz, Inc. Client Trust Account (the "Ferentz Account"). The unsigned joint venture agreement located by Receiver for this investment lists the parties as Defendant Anthony Vassallo as the investor and Jon Fragosa, Jeff Dennis Ferentz, and Charles Jarvis as the "Facilitator." Receiver's investigation has revealed that another investor "invested" $900,000 with Ferentz in connection with the same transaction on November 7, 2007, the same time as EIMT transferred its $2,000,000 to Ferentz.

This Court previously issued orders authorizing banks and financial institutions to assist Receiver in tracing the EIMT investor funds transferred to Ferentz including funds transferred from Jeffrey Dennis Ferentz, Inc. to entities controlled by Mr. Ferentz, including "USR Site Acquisition, LLC." (Doc. Nos. 149 and 219), which remain in full force and effect.

Receiver's investigation has revealed that the balance of the Ferentz Account at the beginning of November 2007 was $1,111.49 before the $2,900,000 was deposited on November 7 and 8, 2007; at the end of November 2007, the balance was $96,476.49. In short, the vast majority of the funds deposited in the Ferentz Account in November 2007 was transferred out of that account shortly after deposit.

Receiver has determined that $700,000 was transferred from the Ferentz Account to a Wells Fargo savings account in the name of "USR Site Acquisition" on November 26, 2007.

The primary signatory and "Owner/Key Individual" on the account is Charlie Jarvis and the secondary "Owner/Key Individual" on the account is Jeff D. Ferentz ("USR Site Acquisition Account").

The only money deposited into the USR Site Acquisition Account was the $700,000 from the Ferentz Account on November 26, 2007. Since that time, there have been interest payments made on the account and regular withdrawals but no other deposits. As of March 31, 2010, the USR Site Acquisition Account had a balance of $168,055.45.

To assist Receiver in preventing the further transfer of and/or dissipation of EIMT assets, Wells Fargo is hereby directed to freeze the Wells Fargo savings account in the name of "USR Site Acquisition," Account No. ###-####703 (the full number of which will be provided to Wells Fargo from Receiver) until further order of this Court.

Wells Fargo is further directed to cooperate fully with Receiver in Receiver's activities, investigation and inquiries on behalf of this Court.

IT IS SO ORDERED.

20100420

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