December 26, 2013: In the lawsuit filed by the Receiver against Roberto Penedo, Penedo has stipulated that Winsome was operating as a Ponzi scheme. The Receiver agreed to withdraw his attempts to require Penedo to repay amounts Winsome paid to Fundacion Guatemalteco. The Court issued an order today implementing this stipulation, which includes Penedo withdrawing his motion for summary judgment. A copy of the Court’s order can be found here.
December 24, 2013: The Receiver filed a motion today seeking Court approval of a settlement with JoAnn Holly. The settlement recognizes that Holly lacks any income or assets to pay any amount to the Receiver. Accordingly, the Receiver will dismiss the lawsuit against her to cease spending legal fees on the litigation against her. A copy of the motion can be found here.
December 19, 2013: The law firm of King, King, & Jones filed its appeal brief today arguing that it should not be required to return money paid to it by Winsome for the criminal defense of Jesus Baca. A copy of the appeal brief can be found here.
December 18, 2013: The Court today issued two orders in connection with the Receiver’s litigation against Terry Harper. In one, the Court ordered Harper to pay $1,143.75 in attorneys’ fees for requiring the Receiver to respond to frivolous motions Harper had filed with the Court. A copy of that order can be found here. The Court also found Harper had failed to respond to discovery requests issued by the Receiver. The Court gave Harper 15 days to provide the discovery requested by the Receiver under threat of sanctions. A copy of this order can be found here.
December 17, 2013: The Court today set a hearing on the Receiver’s motion proposing a plan of distribution. The hearing is set for February 4, 2014 at 1:45 p.m. The Receiver will post information on the website after the hearing with the results of the hearing.
December 10, 2013: One of the claimants, RCH2, has filed a response to the Receiver’s motion for permission to make an initial distribution. RCH2 opposes the Receiver’s plan to allocate some of the recovered funds to all claimants and urges the Court to have distribution payments allocated solely using the rising tide distribution methodology. A copy of RCH2’s response can be found here.
November 26, 2013: The Court entered judgments today against Warren Chiu and Winnie Chiu. The judgment against Warren Chiu is for $767,570.63. A copy of the judgment can be found here. The judgment against Winnie Chiu is for $110,000. A copy of the judgment can be found here.
November 25, 2013: The Court today issued an order denying a motion by Nunzio Bruno to reconsider the Court’s ruling that Bruno needed to appear at the summary judgment in person. The Court also denied Bruno’s motion to require the judge to recuse or disqualify himself for bias. A copy of the Court’s opinion and order can be found here.
November 25, 2013: The Court entered findings of fact and conclusions of law as part of its summary judgment against Nunzio Bruno and in favor of the Receiver. The Court found that Bruno received $203,052.66 more from Winsome than the amount that he invested with Winsome and that those funds must be returned to the Receiver. A copy of the order can be found here.
November 25, 2013: The Court today granted the fee application of the Receiver and his counsel for the period from May through September 2013. A copy of the order can be found here.
November 22, 2013: The Court today issued an order granting the Receiver’s motion to strike frivolous motions submitted by Terry Harper. In addition to striking Harper’s filings, the Court ordered Harper to pay the Receiver’s attorneys’ fees in responding to Harper’s motions. A copy of the order can be found here.
November 18, 2013: The Court today entered an opinion and orders relating to Warren Chiu and PacificWin Investments. In the opinion, the Court entered a default judgment against PacificWin Investments in the amount of $160,000.00. The Court also entered judgment against Warren Winnie Chiu for their failure to comply with discovery obligations. A copy of the Court order can be found here.
November 13, 2013: The Court today issued a decision granting summary judgment to the Receiver against Texas attorney William T. Cornelius and his law firm, Cornelius & Salhab. The Court found that the monies paid by Winsome to Cornelius for the criminal defense of Jerome Carter was a fraudulent transfer and that Winsome received no benefit from the transfer of monies. The Court granted judgment to the Receivership for $89,845.73 plus costs, fees, and interest. A copy of the ruling can be found here..
November 8, 2013: The Receiver filed a motion today asking the Court to approve a distribution plan for a majority of the funds being held by the Receiver. The motion recommends implementation of a hybrid plan by which a portion of the money recovered to date will be distributed to all claimants on a pro-rata basis and some of the funds will be distributed using the rising tide distribution methodology. A copy of the motion can be found here. An exhibit was filed along with the motion. The exhibit shows how the funds would be distributed to each claimant under the plan proposed by the Receiver. The exhibit can be found here.There are two claimants who are objecting to the Receiver’s recommendation that their claims be denied. The Receiver’s plan proposes that amounts that might otherwise be paid to these claimants be held in reserve until those objections are resolved by the Court. In this manner, distributions to other claimants will not have to be held up pending resolution of these two objections. If the court agrees with the objectors, the Receiver will pay them their share of the funds. If the court denies the objections, those monies will be available for further distribution to other investors.
October 31, 2013: The Court today entered a final judgment against Connie Patterson in the amount of $1,966,417.00. The Receiver has not yet found assets that he can attach in order to satisfy this judgment. A copy of the judgment can be found here.
October 30, 2013: The Court today entered default judgment against Kathryn Payton in the amount of $455,125. It is not known if the Receiver will find any assets that can be used to satisfy the judgment. A copy of the judgment can be found here.
October 29, 2013: The Receiver filed a motion asking the Court to compel Harper to respond to discovery requests issued by the Receiver and to provide documents sought in discovery. A copy of the motion can be found here.
October 28, 2013: The Receiver today filed a motion to strike five new filings by Terry Harper. The motion notes that the Court has ordered Harper to cease filing motions that address issues the Court has already ruled on. The Receiver asks the Court to impose sanctions on Harper for continuing to file frivolous motions that take up the Receiver’s time. A copy of the motion can be found here.
October 28, 2013: The Receiver today filed his reply brief in support of the Receiver’s motion for summary judgment against Roberto Penedo. The Receiver has sued Penedo, seeking the recovery of $197,000 paid to Penedo by Winsome. This lawsuit against Penedo is separate from the claim that Penedo has filed asserting a $4 million claim for a share of funds recovered by the Receiver. A copy of the Receiver’s brief can be found here.
October 25, 2013: The Court today issued an order adopting the report and recommendations of the magistrate judge that numerous court filings submitted by Terry Harper are frivolous. The court ordered that these filings be stricken from the record, ordered that Harper cease filing documents addressing issues that have already been ruled on by the Court, and granted the Receiver’s motion to amend the complaint against Harper. A copy of the Court order can be found here.
October 22, 2013: The Receiver filed his quarterly status report today. The report covers the period from July 15, 2013 to October 15, 2013. A copy of the report can be found here.
October 10, 2013: The Court approved the Receiver’s motion to finalize three settlement agreements. Two of the agreements were with defendants who had demonstrated that they had no assets. The third settlement will bring $10,000 in to the Receivership Estate. A copy of the order can be found here.
October 10, 2013: A federal magistrate judge issued a report and recommended decision denying 11 motions filed by Terry Harper that challenge the authority of the court, the receiver’s standing, and validity of the underlying complaint. The magistrate’s recommended decision states that: i) the Court has already ruled on these issues, ii) Harper’s motions violate court rules, and iii) if Harper continues filing frivolous motions such as these, the Court will impose sanctions. The report also recommends that the Receiver’s motion to amend the complaint to allege that Wings Over the World is an alter ego for Harper. A copy of the ruling can be found here.
October 9, 2013: The Receiver filed an application to be paid fees and expenses for the five months from May through September, 2013. A copy of the fee application can be found here.
October 1, 2013: The Receiver filed a motion asking the Court to approve three settlement agreements entered into by the Receiver. One settlement will bring $10,000 into the Receivership Estate while the other two reflect settlements with defendants who have proven that they have no assets. A copy of the motion can be found here.
September 10, 2013: The Court today granted the Receiver summary judgment against Ursula Andres. The ruling stated “the undisputed evidence in the record demonstrates that Winsome was acting as a Ponzi scheme and, therefore, the transfers made to defendant were made with actual intent to defraud.” The Court also rejected Mrs. Andres’ claim that the money she received was justified as compensation for services Robert Andres provided to Winsome. “[T]his and other courts have rejected similar claims that payments made as compensation for drawing in new investors to a Ponzi scheme constitute an exchange of reasonably equivalent value.” The ruling grants judgment against Mrs. Andres for $311,075.00. A copy of the ruling can be found here.
September 6, 2013: The Court entered a judgment today against Lewis Scogin, based on Scogin’s consent. The judgment is for $1,116,317.78. Scogin will be obligated to make payments pursuant to the judgment whenever his annual income exceeds $50,000. A copy of the judgment can be found here.
September 5, 2013: The Court today approved three settlement agreements the Receiver had negotiated with Nowak, Sarmiento, and Bassett. A copy of the order can be found here.
September 5, 2013: The judge overseeing the Receiver’s lawsuit against Michele Petty issued an opinion today denying her motion to dismiss, her request for a change of venue, and her motion for a more definite statement. The Court’s opinion can be found here.
August 26, 2013: The Receiver filed a motion with the Court asking for approval to finalize settlement of three of the lawsuits filed by the Receiver. The three settlements involve Gerald Nowak, Jose Sarmiento, and Judith Bassett. All three settlements involve payment of reduced amounts based on demonstrated financial hardship. The three settlements will bring $41,000 into the Receivership Estate. A copy of the motion can be found here.
August 23, 2013: The Court entered a default judgment today against William Ison for the $185,501.03 that he received from the Receivership Entities. The Receiver has not yet identified assets that Ison might have. A copy of the judgment can be found here. Separately, the Court also dismissed Patty Ison from the lawsuit due to her filing bankruptcy.
August 21, 2013: In the criminal case, Robert Andres entered a guilty plea today. As part of a plea agreement with the U.S. Department of Justice, Andres pleaded guilty to one count of wire fraud. This charge has a maximum sentence of 20 years in prison. Andres declared that he was, in fact, guilty of the scheme to defraud. He has agreed to pay restitution of up to $3.1 million (recognizing that it is unlikely he will ever be able repay much of that amount). Sentencing is set for January 7, 2014 at 2:30 p.m. Victims are welcome to attend the sentencing hearing and to make statements that they would like the judge to consider in sentencing. A copy of the plea agreement, including the admissions made by Andres as part of the plea, can be found here.
August 19, 2013: The Court today issued an order granting the Receiver’s motion for summary judgment against the Georgia law firm King & King & Jones. The Court decision found that Winsome had no obligation to pay King & King & Jones for its criminal defense of Enrique Baca and that Winsome received no benefit from the payment to the law firm. The Court entered judgment of $25,000 to the Receivership Estate. A copy of the order can be found here.
August 9, 2013: The tenth quarterly status report was filed today. It covers the period from April 16, 2013 to July 15, 2013. A copy can be found here.
August 8, 2013: The Receiver today filed a motion for summary judgment against Bruno, seeking recovery of the $203,000 in excess payments he received. A copy of the Receiver’s motion can be found here.
August 1, 2013: The Court today dismissed the Receiver’s lawsuit against Halo TV based on Halo’s initial compliance with its settlement agreement. A copy of the dismissal order can be found here.
July 30, 2012: The Court today entered an order dismissing the lawsuit against Lauren Bateman based on her settlement with the Receiver and payment of the settlement amount. A copy can be found here.
July 26, 2013: The Receiver today filed with the Court a response to a filing by Terry Harper challenging the jurisdiction of the Court over him. A copy of the Receiver’s response can be found here.
July 17, 2013: Today the Court issued an order granting summary judgment to the Receiver against Connie Patterson. The Court adopted the December 12, 2012 recommendations of a magistrate judge. The judgment against Patterson is in the amount of $1,472,425.96 plus prejudgment interest. The Court’s order can be found here. The magistrate’s recommended order can be found here.
July 16, 2013: Default judgment was entered today against Robert Quinton Cook and Onti Management Group in the amount of $26,366.00. Judgment was entered after the defendants filed to appear and defend themselves in the lawsuit filed by the Receiver. A copy of the motion can be found here.
July 12, 2013: The Court approved three settlement agreements today. The settlements are with Crouse, Bateman, and Scogin. A copy of the order can be found here.
July 12, 2013: The Court today approved paying fees and expenses to the Receiver and his counsel. A copy of the order approving the payment can be found here.
June 25,2013: The Tenth Circuit Appeals Court issued an order today dismissing the appeal filed by Terry Harper. The Court ruled that Harper’s appeal because the trial court case is still ongoing and final judgment had not been entered. A copy of the order can be found here.
June 21, 2013: The Court entered judgment against Clayton Lynn Ballard and Carol Ballard. The judgment is for $577,592.57, which is the amount paid to them by Winsome. The Ballards are required to provide annual financial information to the Receiver and to make payments to the Receiver if their income and assets exceed certain levels. A copy of the judgment can be found here.
June 19, 2013: The Receiver filed a motion seeking approval of three additional settlement agreements negotiated by the Receiver. The settlement agreements provide that i) James and Lorraine Crouse will pay $7,500 in settlement of the Receiver’s claims, ii) Lauren Bateman will return $7,5000 to the Receivership which she received in excess payments, and iii) Lewis Scogin consents to the entry of a judgment in the amount of $1,116,317.78. Scogin has submitted a hardship affidavit, asserting that he has no assets or income. Under the settlement agreement, whenever his income exceeds $50,000 per year, he will send payments to the Receivership. A copy of the motion can be found here.
June 13, 2013: The court today issued an order denying the motion to dismiss filed by Peter and Laurie Widmark. The Court said that the Receiver’s lawsuit against the Widmarks can continue in Utah, where the case was filed. A copy of the Court’s order can be found here.
June 6, 2013: The Receiver is providing the following update regarding the status of making distributions of recovered funds to investors:Three objections to the recommended list of allowable claims have been filed with the Court. These objections must be resolved before any distributions can be made. One of the objections has been resolved with a stipulation that increases the claim amount of RCH2. On June 6, 2013, we had a full-day trial on Roberto Penedo’s claim that Winsome owes him $4.4 million relating to the Guatemala refinery that was being promoted by a different company, RIO Systems, Inc. The judge is expected to issue a ruling in the next few weeks on Mr. Penedo’s claim. For the third objection, the Receiver has submitted additional information to the judge on why Zaman Ali’s claim should be rejected. Mr. Ali has submitted information on why he believes his claim should be recognized. We don’t know when that objection will be resolved.We cannot distribute any money until the Court has decided what share will go to each claimant. And that requires that we know the total amount of valid claims. So, until the objections are all resolved, we cannot ask the Court for permission to send out money. I am unhappy at the delay that is being caused by objectors wanting to claim a share of the recovery fund and how much time is having to be spent to respond to these objections, but it is important not to give a share of the recovered amount to those who do not deserve it. This decision ultimately will be made by the Court. I cannot predict when the payments might go out. It might be by the end of July and it might be several more months.
June 3, 2013: Terry Harper filed a notice of appeal of the Court’s denial of his motion to strike the lawsuit filed against him by the Receiver. A copy of his appeal notice can be found here.
May 31, 2013: The Receiver filed summary judgment today against Texas attorney William Cornelius and his law firm. The motion asks the Court to enter judgment to the Receiver for $89,845.73 that was paid to Cornelius. A copy of the motion can be found here.
May 31, 2013: The Receiver today filed a motion seeking summary judgment against Ursula Andres, the wife of Robert Andres. The motion asks the Court to enter judgment for the Receiver for the $311,075.00 that Ursula Andres was paid by Winsome and other companies controlled by Robert Andres. A copy of the motion can be found here.
May 31, 2013: An application for the payment of fees and recovery of expenses was filed today by the Receiver and his counsel. The application seeks payment for five months of work by the law firm and two months of work by the Receiver and his staff. A copy of the application can be found here.
May 29, 2013: The Receiver filed a motion today seeking summary judgment against Patty Ison for the $185,501.03 she was paid by Winsome. A copy of the motion can be found here.
May 28, 2013: The Court today signed an order approving the Receiver’s request for payment of his fees and reimbursement of his expenses for the period from January 2012 through January 2013. A copy of the order can be found here.
May 28, 2013: The Court today approved the settlements that the Receiver negotiated with Tsakas, Ballard, Halo TV, and Behles. A copy of the order can be found here.
May 21, 2013: The Court entered two orders today relating to the claims process. In the first, he ordered Zaman Ali to provide copies of accounting records showing the monies that were sent to his company, MCubed. A copy of that order can be found here. In the second, the Court approved a settlement between the Receiver and claimant RCH2 in which the Receiver agreed to allow RCH2 75% of the disputed claim relating to payments by Springridge, LLC. A copy of that order can be found here.
May 17, 2013: The Receiver consented to a motion filed today with the Court relating to the amount of claim of the Receiver for RCH2. RCH2 had objected to the Receiver’s determination to deny $435,000 of its claim. After extensive additional investigation, the Receiver determined that the vast majority of monies sent from Springridge, LLC to US Ventures was money that had come from investors in RCH2-related entities. The Receiver has agreed with RCH2 to allow raise its allowed claim to $3,423,538. This still represents a reduction in the amount originally claimed by RCH2. A copy of the motion can be found here and the stipulation can be found here.
May 14, 2013: The Court entered an order denying a motion to strike the Receiver’s lawsuit, which was filed by Terry Harper. The Court ruled that all of Harper’s objections had already been denied previously by the Court. A copy of the Court’s order can be found here.
April 29, 2013: The Receiver today filed a status report covering the period from December 16, 2012 to April 15, 2013. The report discusses the status of plans to make distributions, describes significant settlements obtained recently, and reports on litigation developments. A copy of the report can be found here.
April 26, 2013: The Receiver today filed a motion for summary judgment against Judith Bassett. A copy of the motion can be found here.
April 23, 2013: The Receiver today filed a motion seeking court approval to finalize four additional settlement agreements. These settlement agreements are with Daniel Behles for $62,500, Roxanne Tsakas for $10,000, Halo Film and TV for $15,000, and Clayton Ballard for a judgment that can be enforced against future assets. A copy of the motion can be found here.
April 19, 2013: The Court today ordered Warren Chiu, Winnie, Chiu, Stephen Chiu, Jennifer Chiu, and PacificWin to provide discovery responses to the Receiver by May 3, 2013. If those responses are not provided, the Court will consider requiring the Chius to pay the expenses of the Receiver in filing the motion to compel discovery. The Court also ruled that the requests for admission were deemed admitted since no response was filed. A copy of the court’s order can be found here.
April 19, 2013: The Receiver filed a motion for summary judgment against the Georgia law firm King, King and Jones, seeking recovery of payments made to it by Winsome for the law firm’s work in defending Erique Baca against criminal charges. A copy of the Receiver’s motion can be found here. King, King and Jones also filed a motion for summary judgment. Its motion can be found here.
April 2, 2013: The Receiver today filed an application with the court to be able to recover his expenses advanced on behalf of the receivership and to be paid fees for the his work and the work of his staff for the 13-month period from February 1, 2012 to February 28, 2013. A copy of the fee application can be found here. Accompanying exhibits can be found here.
March 28, 2013 On March 26, the Receiver filed a motion seeking Court approval to finalize eight settlement agreements. These eight agreements include some large settlements. Together, these agreements will bring over $2.4 million into the Receivership Estate. A copy of the motion can be found here. On March 28, the Court entered an order approving the settlements. A copy of the Court order can be found here.
March 27, 2013: The judge in the case against Terry Harper issued a decision denying Harper’s motion to dismiss the lawsuit. A copy of the ruling can be found here.
March 26, 2013: The Court today entered a judgment of $2,279,187.71 against Nancy Howe and Leo Renaud. A copy can be found here. The judgment was entered by default, after Howe and Renaud ceased defending themselves in the Receiver’s lawsuit against them. To date, the Receiver has not found any assets that can be used to satisfy the judgment.
March 25, 2013: The Court today entered a judgment against Nancy I. Howe and Leo Renaud. The orders were obtained by default, after Howe and Renaud failed to provide discovery and did not comply with court orders. The judgment is in the amount of $2,279,187.71. In addition, the Court ordered Howe and Renaud to reimburse the Receiver’s attorney $1,420.50 in fees and costs based on Howe and Renaud’s failure to provide discovery. A copy of the order can be found here.
March 14, 2013: The Court granted a default judgment against Aishwariya Enterprises, Inc. and in favor of the Receiver. The judgment is in the amount of $206,020.40. A copy of the judgment can be found here. The Receiver believes he is unlikely to find any assets to satisfy this judgment.
February 28, 2013: The Court today entered an order dismissing the Receiver’s lawsuit against Emmanuel Mbobi as a result of a settlement agreement signed with the Receiver on December 21, 2012, which was approved by the Court on January 7, 2013. A copy of the dismissal order can be found here.
February 27, 2013: The Court today entered a default judgment against Keith Shaffner in the amount of $362,188.78. This amount represents monies paid to Mildred Rogers and M&K Ventures, a company controlled by Shaffner. The estate of Mildred Rogers (Shaffner’s mother) was dismissed from the litigation because there did not appear to be an estate created. The Receiver previously obtained a judgment against M&K Ventures. Rex Shaffner, a brother, proved that improper payments did not go to him and he was dismissed from the litigation. This case is now concluded against these defendants. A copy of the judgment can be viewed here.
February 26, 2013: The Court today set a trial schedule for the objection that Roberto Penedo filed. Penedo has objected to the Receiver’s recommendations on who are allowable claimants that can share in the funds recovered by the Receiver. The court set the trial for June 6, 2013. Until this matter is resolved, the Receiver cannot finalize the amount of allowable claims.
February 11, 2013: The Receiver today filed a motion asking the court to grant summary judgment against Connie Patterson. The motion alleges that Patterson lacked good faith and should be required to return all amounts she received from Winsome. A copy of the motion can be found here.
February 8, 2013: Today the Receiver filed his response to the three claims objections. The Receiver’s response can be found here. His declaration in support of his motion can be found here. The Court has scheduled a status hearing on February 12, 2013 at 1:20.
February 4, 2013: A third objection was filed today, objecting to the Receiver’s recommendations on the claims process. This objection was filed after the deadline for making objections. The objection was filed by Zaman Ali. A copy can be found here.
January 24, 2013: The court today approved the fee application for Manning Curtis Bradshaw and Bednar, attorneys for the Receiver. A copy of the order can be found here.
January 22, 2013: RCH2, LLC filed an objection to the Receiver’s recommendation on the allowable claim amount. RCH2, through its court-appointed receiver, asks the Court to give it credit for payments sent to US Ventures by a company named Springridge, LLC. The Receiver will be responding to this objection. The RCH2 objection can be found here.
January 21, 2013 Robert Penedo filed an objection to the Receiver’s recommendation on the allowable claim amount. Penedo is asking the Court to grant its claim of $4,615,000 based on a contract Penedo had with RIO Systems. The Penedo objection can be found here.
January 16, 2013: The court today issued an order denying a motion for summary judgment filed by Nina Abdulbaki. Abdulbaki asked the court to rule that cash she provided to Andres in exchange for personal promissory notes should be counted against the payments she received from Winsome. The court allowed the Receiver to conduct further discovery about those transactions. A copy of the court’s order can be found here.
January 11, 2013: A federal judge today denied a motion to dismiss filed by Ravkind and Associates. Ravkind is a law firm that received monies from Winsome to pay for criminal defense services for an associate of Andres. The order denying the motion to dismiss found that the receiver could proceed with his lawsuit against Ravkind. A copy of the order can be found here.
January 4, 2013: The Receiver filed a motion today asking the court to approve two settlement agreements. In the first, John Cook agrees to repay $12,000 to the receivership. In the second, Emmanuel Mbobi demonstrated a financial inability to pay any monies but agreed to assist the receiver in other litigation. If the settlements are approved by the court, the lawsuits will be dismissed against both. A copy of the motion can be found here. A copy of the approval is here.
