UNITED STATES DISTRICT COURT EASTERN DISTRICT OF CALIFORNIA SACRAMENTO
April 27, 2010
SECURITIES AND EXCHANGE COMMISSION, PLAINTIFF
ANTHONY VASSALLO, ET AL, DEFENDANTS.
ORDER DIRECTING STRONG MCPHERSON & COMPANY TO PROVIDE DOCUMENTS AND INFORMATION PERMITTING RECEIVER TO TRACE $423,320.80 RECEIVED ON OR ABOUT NOVEMBER 9, 2007 Judge Lawrence K. Karlton
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"). 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.
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.
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 "JD Centuries, LLC" (Doc. Nos. 149 and 219), which remain in full force and effect.
Receiver has determined that on November 8, 2007, $800,000 of the Ferentz funds were wired to the U.S. Bank client trust account of Nevada law firm Hale, Lane, Peek, Dennison and Howard ("Hale Lane"). This Court previously issued an order directing Hale Lane to provide information and documentation concerning the November 8, 2007 wire from JD Centuries, LLC to the Hale Lane client trust account for $800,000, sufficient to permit Receiver to trace those funds (Doc. No. 258), which remains in full force and effect.
On November 9, 2007, of the $800,000 of Ferentz funds wired to Hale Lane, $423,320.80 was transferred to the Nevada certified public accounting firm of Strong McPherson & Company ("Strong McPherson") at the direction of Ron Laspina. These funds were transferred via two separate checks issued from the Hale Lane client trust account in the amounts of $35,000.00 and $388,320.80.
To further assist Receiver's investigation in tracing the EIMT funds transferred Ferentz, the Court directs Strong McPherson to provide to Receiver information and documentation concerning the November 9, 2007 transfer of $423,320.80 from Hale Lane, sufficient to permit Receiver to trace those funds, including but not limited to account statements related to the transfers and/or reflecting receipt and disbursement of the $35,000.00 and the $388,320.80, any 28 correspondence or other documentation concerning the disbursement of the transfers, the name and contact information of any Strong McPherson client for whom it received the funds, and information and other documentation facilitating Receiver's tracing of these funds.
Strong McPherson is further directed to cooperate fully with Receiver in Receiver's activities, investigation and inquiries on behalf of this Court.
IT IS SO ORDERED.
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