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United States v. Hoffman et al.: US District Court : CIVIL PROCEEDURE - preliminary injunction regarding alleged real estate fraud scheme

UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA
Civil No. 08-1316 (DSD/SRN)
United States of America,
Plaintiff,
v. ORDER
James Warren Hoffman,
Teresa Gay Hoffman,
Accredited Financial Services, Inc.,
aka AFS Co., aka AFS, Inc.,
Encore Acquisitions, LLC, aka
Encore LLC, Bessord Partnership,
LLC, aka Bessord,
Heartland Consulting, aka
Hartland Consulting,
GRD Management, aka GRD Property
Management, Chad Wegscheider,
Patrick Dols, Minnesota One
Mortgage, Inc., Wegs Enterprise, LLC,
Wegs Properties, LLC, aka
Wegs Property Management, LLC, and
Wissota Property Management, LLC,
KMC Properties, LLC,
Defendants.
Gregory G. Brooker, Assistant U.S. Attorney, 300 South
Fourth Street, Suite 600, Minneapolis, MN 55415, counsel
for plaintiff.
John C. Brink, Esq. and Brink & Gerdts, 331 Second Avenue
South, Suite 110, Minneapolis, MN 55401, counsel for
defendants.
This matter is before the court on plaintiffs motion for a
preliminary injunction and for appointment of a receiver. Based
upon a review of the file, record and proceedings herein, and for
the following reasons, the court grants plaintiffs motion.
1 18 U.S.C. 1345 provides:
(a)(1) If a person is--
(A) violating or about to violate this chapter or
section 287, 371 (insofar as such violation
involves a conspiracy to defraud the United States
or any agency thereof), or 1001 of this title;
(B) committing or about to commit a banking law
violation (as defined in section 3322(d) of this
title); or
(C) committing or about to commit a Federal health
care offense;
the Attorney General may commence a civil action in any
Federal court to enjoin such violation.
(2) If a person is alienating or disposing of property,
or intends to alienate or dispose of property,
obtained as a result of a banking law violation (as
defined in section 3322(d) of this title) or a
Federal health care offense or property which is
traceable to such violation, the Attorney General
may commence a civil action in any Federal court
(A) to enjoin such alienation or disposition of
property; or
(B) for a restraining order to
(i) prohibit any person from withdrawing,
transferring, removing, dissipating, or
disposing of any such property or property of
equivalent value; and
(ii) appoint a temporary receiver to
administer such restraining order.
(3) A permanent or temporary injunction or restraining
order shall be granted without bond.
(b) The court shall proceed as soon as practicable to
the hearing and determination of such an action,
and may, at any time before final determination,
enter such a restraining order or prohibition, or
take such other action, as is warranted to prevent
(continued...)
2
BACKGROUND
I. Procedural Posture
On May 13, 2008, plaintiff United States of America filed this
civil action under the antifraud injunction statute, 18 U.S.C.
13451, against defendants James Warren Hoffman; Teresa Gay
1(...continued)
a continuing and substantial injury to the United
States or to any person or class of persons for
whose protection the action is brought. A
proceeding under this section is governed by the
Federal Rules of Civil Procedure, except that, if
an indictment has been returned against the
respondent, discovery is governed by the Federal
Rules of Criminal Procedure.
3
Hoffman; Accredited Financial Services, Inc.; Encore Acquisitions,
LLC; Bessord Partnership, LLC; Heartland Consulting; GRD
Management; Chad Wegscheider; Patrick Dols; Minnesota One Mortgage,
Inc.; Wegs Enterprise, LLC; Wegs Properties, LLC; Wissota Property
Management, LLC; and KMC Properties, LLC. The United States
alleged that defendants were committing large-scale mail, wire and
bank fraud through a property purchasing and selling scheme and
moved for an ex parte temporary restraining order (TRO). The
court granted the TRO on May 13 and scheduled a hearing for a
preliminary injunction on May 23, 2008. After extending the TRO
until June 13, 2008, the court heard argument on the United States
motion for preliminary injunction and appointment of a receiver on
June 2, 2008.
II. Findings of Fact
The findings of fact here or in the subsequent legal analysis
as well as any conclusions of law forming part of the courts
determination of the propriety of a preliminary injunction in this
case are subject to the general rule that the findings of fact
4
and conclusions of law made by a court granting a preliminary
injunction are not binding at trial on the merits. Henderson v.
Bodine Aluminum, Inc., 70 F.3d 958, 962 (8th Cir. 1995) (quoting
Univ. of Tex. v. Camenisch, 451 U.S. 390, 395 (1981)).
The United States presented evidence detailing defendants
fraudulent schemes related to the purchase and sale of real
property, and the court accepts the following as its findings of
fact:
Beginning in June 2006, James and Teresa Hoffman created
entities to purchase apartment buildings, convert them into
condominiums and sell the individual condominiums for sizable
profit.
C To finance the venture, the Hoffmans - along with Chad
Wegscheider and Patrick Dols - fraudulently obtained mortgages
from financial institutions and mortgage lenders in the names
of third parties. The Hoffmans directed the third party
buyers to cooperating mortgage brokers to apply for mortgages.
Often, the buyers met with Wegscheider and Dols, each of whom
facilitated the processing of the buyers loan applications.
C The loan applications in question contained multiple material
false statements, including inflation of the buyers income
and bank account balances, failure to list other properties
being purchased at or near the time of the current property,
failure to disclose other mortgages or liabilities and false
5
characterization of the source of down payment provided at
closing. The Hoffmans, for example, occasionally gave buyers
the money for their down payment while the loan application
failed to reflect such outside involvement.
C The Hoffmans used this method on at least three occasions,
representing more than fifty condominium units, from January
to August 2007. They also employed this method to structure
the purchase of a single-family residence in Willmar, MN, and
to protect their own home from foreclosure in August 2006 -
fraudulently obtaining 9,000 in the process.
C Generally, the Hoffmans inherited or placed renters in the
condominium units, received their rental payments and then
paid the rent to third-party buyers to be applied as mortgage
payments. The Hoffmans and others have routinely diverted
portions of such rental payments, often causing the thirdparty
buyers to become delinquent on the mortgage payments.
C The United States believe that the amount traceable to
defendants fraudulent activities is approximately .5
million.
Based upon these facts, the United States argues that the
court should order a preliminary injunction to prevent the
immediate and irreparable harm resulting from defendants ongoing
6
mail, wire and bank fraud. The United States also seeks
appointment of a receiver to take control of defendants businesses
and protect innocent third parties.
DISCUSSION
I. Preliminary Injunction
The court examines four factors when considering whether to
grant preliminary injunctive relief. See Dataphase Sys., Inc. v.
C L Sys., Inc., 640 F.2d 109, 112-14 (8th Cir. 1981); Northland
Ins. Cos. v. Blaylock, 115 F. Supp. 2d 1108, 1116 (D. Minn. 2000).
Those factors are (1) the threat of irreparable harm to the movant
in the absence of relief, (2) the balance between that harm and the
harm that the relief would cause to the other litigants, (3) the
likelihood of the movants ultimate success on the merits and
(4) the public interest. See Dataphase, 640 F.2d at 112-14. The
movant bears the burden of proof concerning each factor. See Gelco
v. Coniston Partners, 811 F.2d 414, 418 (8th Cir. 1987). No single
factor is determinative. See Dataphase, 640 F.2d at 113. Instead,
the court considers the particular circumstances of each case,
remembering that the primary question is whether the balance of
equities so favors the movant that justice requires the court to
intervene to preserve the status quo until the merits are
determined. Id. If the threat of irreparable harm to the movant
is slight when compared to likely injury to the other party, the
7
movant carries a particularly heavy burden of showing a likelihood
of success on the merits. See ASICS Corp. v. Target Corp., 282 F.
Supp. 2d 1020, 1025 (D. Minn. 2003).
A. Threat of Irreparable Harm
Plaintiffs must first establish that irreparable harm will
result without injunctive relief and that such harm will not be
compensable by money damages. See Blaylock, 115 F. Supp. 2d at
1116. Possible or speculative harm is not enough. See Graham Webb
Intl v. Helene Curtis, Inc., 17 F. Supp. 2d 919, 924 (D. Minn.
1998). Rather, the party seeking the injunctive relief must show
a significant risk of harm exists. Johnson v. Bd. of Police
Commrs, 351 F. Supp. 2d 929, 945 (E.D. Mo. 2004). The absence of
such a showing alone is sufficient to deny a preliminary
injunction. See Gelco, 811 F.2d at 420. When the United States
seeks an injunction pursuant to 1345, the threat of substantial
injury to a class of persons for whose protection the government
initiates the action may substitute for the irreparable harm
injury. See United States v. Barnes, 912 F. Supp. 1187, 1197 (N.D.
Iowa 1996).
The court finds that the threat of substantial injury weighs
in favor of granting a preliminary injunction. The evidence here
demonstrates that defendants have used the fraudulent scheme to
purchase property in at least four Minnesota cities and jeopardize
the financial stability of renters, purchasers, sellers, escrow
8
agents and banking institutions. Defendants actions have already
led to straw buyers defaulting on mortgages, and the scheme also
threatens renter stability. In this time of stress in the housing
and mortgage markets, the impact of defendants fraud on innocent
third parties is especially great. For these reasons, the United
States has demonstrated the probability of substantial injury, and
this factor weighs in favor of injunctive relief.
B. Balance of Harms
Under the second factor, the court considers whether the
irreparable harm to the movant outweighs any potential harm to the
nonmovants should the injunction issue. See Dataphase, 640 F.2d at
114. In 1345 terms, this factor is comparable to the ongoing
fraudulent scheme requirement. See Barnes, 912 F. Supp. at 1197
(relating the balance of harms factor to the possible continuing
threat of defendants actions).
Defendants argue that there is no ongoing scheme because the
instances of alleged mail or wire fraud occurred in months past and
further maintain that a preliminary injunction would greatly harm
their businesses. The evidence demonstrates, however, that the
overall scheme of wire, mail and bank fraud was continuing until
the issuance of the TRO. Specifically, defendants only recently
cancelled real estate transactions in Alexandria and Winona,
Minnesota, and were working on a deal in Chippewa Falls, Wisconsin,
at the time the TRO issued. Moreover, because renters occupy many
9
of defendants properties and vacancies exist at such locations,
there is potential for continuing and future harm to these innocent
third parties that outweighs the harm to defendants. Accordingly,
this factor also supports the issuance of an injunction.
C. Likelihood of Success on the Merits
The third factor questions whether the movant will likely
prevail on the merits. While not overriding the other factors, the
likelihood of success on the merits is preeminent. See Halikas v.
Univ. of Minn., 856 F. Supp. 1331, 1335 (D. Minn. 1994). The
United States may demonstrate a likelihood of success on the merits
under 1345 by proving a violation of the predicate offense statue
by a preponderance of the evidence. See Barnes, 912 F. Supp. at
1197; United States v. Brown, 988 F.2d 658, 663 (6th Cir. 1993).
As detailed above in the factual findings, the United States has
offered evidence to demonstrate that defendants have devised a
fraudulent scheme for purchasing and selling property, in violation
of 18 U.S.C. 1341, 1343 and 1344. Accordingly, the United
States has demonstrated a reasonable likelihood of success on the
merits, and this factor supports the issuance of injunctive relief.
D. Public Interest
Finally, the court considers the public interest. Here, there
is a substantial public interest in protecting innocent parties
from predatory and fraudulent schemes. Further, the public
10
interest is served by a prompt and appropriate response to such
actions. Therefore, this factor also weighs in favor of a
preliminary injunction.
After a careful review of the file, record and issues raised
at oral argument, as well as the Dataphase factors and 1345, the
court determines that issuance of a preliminary injunction is
appropriate in this case.
II. Appointment of a Receiver
The United States argues that the appointment of a receiver is
appropriate in this case to protect innocent third parties
associated with defendants. Defendants argue that James Hoffmans
assistant, Katherine Marie Caswell, can manage the business of the
properties without the intervention of a receiver.
A receiver is an extraordinary equitable remedy that is only
justified in extreme situations. Aviation Supply Corp. v.
R.S.B.I. Aerospace, Inc., 999 F.2d 314, 316 (8th Cir. 1993). There
is no precise formula for determining when appointment of a
receiver is appropriate, but courts generally consider the
following factors:
(1) a valid claim by the party seeking the appointment,
(2) the probability that fraudulent conduct has occurred
or will occur to frustrate that claim, (3)imminent danger
that property will be concealed, lost, or diminished in
value, (4) inadequacy of legal remedies, (5) lack of a
less drastic equitable remedy, and (6) likelihood that
appointing the receiver will do more good than harm.
Id. at 316-17.
11
Here, many of these factors overlap with the preliminary injunction
inquiry, and although appointment of a receiver is an extraordinary
remedy, the court determines that it is appropriate at this time.
Due to the complex financial structure of defendants holdings,
involvement of third-party renters and straw buyers and the
possibility of legitimate business coexisting with fraudulent
schemes, the court finds that a neutral party is best equipped to
organize and administer the various holdings at issue in this
action. Further, because the fraud alleged involves rent skimming
and potential foreclosures, there is a danger of continuing harm to
property interests that necessitates intervention. For these
reasons, the court grants the United States motion to appoint a
receiver.
CONCLUSION
Therefore, IT IS HEREBY ORDERED that:
1. Plaintiffs motion for a preliminary injunction and
appointment of a receiver [Doc. No. 10] is granted.
2. All defendants; their agents; their officers; their
employees; and all persons in active concert or participating with
defendants in their affairs are hereby enjoined from continuing to
perpetrate a fraudulent scheme involving real estate by violating
the mail fraud statute, 18 U.S.C. 1341; the wire fraud statute,
18 U.S.C. 1343; and the bank fraud statute, 18 U.S.C. 1344.
12
3. All defendants; their agents, including financial and
banking institutions and other entities having possession or
control of defendants assets; their officers; their employees; and
all persons in active concert or participating with defendants in
their affairs are hereby restrained and enjoined:
a. from withdrawing or transferring up to and including
.5 million that is on deposit with or held on
defendants behalf by any financial or banking
institution, trust fund, brokerage agency, or other
financial agency, public or private, unless specifically
authorized by order of the court;
b. from transferring, selling, assigning, dissipating,
concealing, encumbering, impairing, or otherwise
disposing of, in any manner, assets in real or personal
property, owned, gained, or acquired by defendants up to
and including .5 million, unless specifically
authorized by order of the court; and
c. from opening or causing to be opened any safe
deposit boxes or storage facilities titled in the name of
defendants, or subject to access by defendants or under
their control, without providing the United States prior
notice and an opportunity to inspect the contents in
order to determine that they contain no assets covered by
13
this preliminary injunction, unless specifically
authorized by order of the court.
4. All assets, including bank accounts, of defendants
Accredited Financial Services, Inc., aka AFS Co., aka AFS, Inc.;
Encore Acquisitions, LLC, aka Encore LLC; Bessord Partnership, LLC,
aka Bessford; Heartland Consulting, aka Hartland Consulting; GRD
Management, aka GRD Property Management; Minnesota One Mortgage,
Inc.; Wegs Enterprise LLC; Wegs Properties, LLC, aka Wegs Property
Management, LLC; Wissota Property Management, LLC; and/or KMC
Properties, LLC are deemed to be property of the Receivership and
subject to the administration by the Receiver, as detailed in this
Preliminary Injunction and Order.
5. The receiver shall also temporarily assume control over
all bank and other accounts to which defendant Chad Wegscheider is
a signatory. The receiver shall determine the status of these
accounts and if any legitimate obligations exist regarding these
accounts.
6. Any financial or brokerage institution, bank, business
entity, or person having possession, custody, or control of any
account, safe deposit box, or other asset of any of the defendants
shall:
14
a. Hold and retain within its control and prohibit the
transfer, encumbrance, pledge, assignment, removal,
withdrawal, dissipation, sale, or other disposal of any
such account or other asset, except:
i. for transfers or withdrawals directed by
the receiver for those assets over which the
receiver has control pursuant to this order or
any order of the court; or
ii. by further order of the court;
b. Deny access to any safe deposit box titled in the
name of Defendants or otherwise subject to access by
defendants;
c. Provide to the receiver, with ten (10) business days
of notice of this preliminary injunction and order, a
statement setting forth:
i. The identification of each account or
asset titled in the name of any and all named
defendants;
ii. The balance of each account or a
description of the nature and value of each
asset under the name of any and all named
defendants; and
iii. The identification of any safe deposit
box or storage facility that is either titled
15
in the name of or subject to access by each
named defendant.
d. Allow the receiver immediate access to inspect or
copy any records or other documentation pertaining to
such account or asset owned or controlled by each named
defendant, including, but not limited to, originals or
copies of account applications, account statements,
signature cards, checks, drafts, deposit tickets,
transfers to and from the accounts, all other debit and
credit instruments or slips, currency transaction
reports, 1099 forms, and safe deposit box logs. Any such
financial institution, account custodian, or other
aforementioned entity may arrange for the receiver to
obtain copies of any such records which the receiver
seeks, provided that such institution or custodian may
charge a reasonable fee not to exceed twenty five (25)
cents per page copied;
e. At the direction of the receiver, and without
further order of the court, convert any stocks, bonds,
options, mutual funds, or other securities owned by each
named defendant; and
f. cooperate with all reasonable requests of the
receiver relating to implementation of this preliminary
injunction and order, including transferring funds at the
16
receivers direction and producing records related to all
accounts owned by each named defendant.
7. Defendants; their agents, including financial and banking
institutions and other entities having possession or control of
defendants assets; their officers; their employees; and all
persons in active concert or participating with defendants in their
affairs are hereby restrained and enjoined from:
a. failing to maintain all business, corporate,
foundation, banking, financial, and/or accounting records
in their possession that could be material to this cause
of action;
b. altering any business, corporate, foundation,
banking, financial, and/or accounting records in their
possession that could be material to this cause of
action;
c. disposing of any business, corporate, foundation,
banking, financial, and/or accounting records in their
possession that could be material to this cause of
action.
8. Andy Luger, of Greene Espel LLP, is appointed receiver
for defendants Accredited Financial Services, Inc., aka AFS Co.,
aka AFS, Inc.; Encore Acquisitions, LLC, aka Encore LLC; Bessord
Partnership, LLC, aka Bessford; Heartland Consulting, aka Hartland
Consulting; GRD Management, aka GRD Property Management; Minnesota
17
One Mortgage, Inc.; Wegs Enterprise LLC; Wegs Properties, LLC, aka
Wegs Property Management, LLC; Wissota Property Management, LLC;
and/or KMC Properties, LLC and any affiliates, subsidiaries,
divisions, sales, entities, successors, or assigns, with the full
power of an equity Receiver. The receiver shall solely be the
agent of the court in acting as receiver under this order. The
receiver shall be accountable directly to the court and shall
comply with any local rules of the court governing receivers, as
well as the Federal Rules of Civil Procedure.
9. The receiver is directed and authorized to accomplish the
following:
a. Assume full control of the operations of defendants
Accredited Financial Services, Inc., aka AFS Co., aka
AFS, Inc.; Encore Acquisitions, LLC, aka Encore LLC;
Bessord Partnership, LLC, aka Bessford; Heartland
Consulting, aka Hartland Consulting; GRD Management, aka
GRD Property Management; Minnesota One Mortgage, Inc.;
Wegs Enterprise LLC; Wegs Properties, LLC, aka Wegs
Property Management, LLC; Wissota Property Management,
LLC; and/or KMC Properties, LLC removing, as the receiver
deems necessary or advisable, any director, officer,
independent contractor, employee, or agent of these
18
defendants from control of, management of, or
participation in, the business affairs of each of these
defendants;
b. Take exclusive custody, control, and possession of
all the assets in the possession, custody, or under the
control of defendants Accredited Financial Services,
Inc., aka AFS Co., aka AFS, Inc.; Encore Acquisitions,
LLC, aka Encore LLC; Bessord Partnership, LLC, aka
Bessford; Heartland Consulting, aka Hartland Consulting;
GRD Management, aka GRD Property Management; Minnesota
One Mortgage, Inc.; Wegs Enterprise LLC; Wegs Properties,
LLC, aka Wegs Property Management, LLC; Wissota Property
Management, LLC; and/or KMC Properties, LLC, wherever
situated, except those assets seized by the United States
pursuant to valid orders of a court. The receiver shall
have full power to divert mail and to sue for, collect,
receive, take in possession, hold, and manage all assets
of defendants Accredited Financial Services, Inc., aka
AFS Co., aka AFS, Inc.; Encore Acquisitions, LLC, aka
Encore LLC; Bessord Partnership, LLC, aka Bessford;
Heartland Consulting, aka Hartland Consulting; GRD
Management, aka GRD Property Management; Minnesota One
Mortgage, Inc.; Wegs Enterprise LLC; Wegs Properties,
LLC, aka Wegs Property Management, LLC; Wissota Property
19
Management, LLC; and/or KMC Properties, LLC, and other
persons or entities whose interests are now held by or
under the direction, possession, custody, or control of
these defendants; PROVIDED, HOWEVER, the receiver shall
not attempt to collect any amount from a person if the
receiver believes the person was a victim of the mail,
wire, or bank fraud scheme alleged in the Amended
Complaint in this matter;
c. Take all steps necessary to secure the business
premises of defendants Accredited Financial Services,
Inc., aka AFS Co., aka AFS, Inc.; Encore Acquisitions,
LLC, aka Encore LLC; Bessord Partnership, LLC, aka
Bessford; Heartland Consulting, aka Hartland Consulting;
GRD Management, aka GRD Property Management; Minnesota
One Mortgage, Inc.; Wegs Enterprise LLC; Wegs Properties,
LLC, aka Wegs Property Management, LLC; Wissota Property
Management, LLC; and/or KMC Properties, LLC. Such steps
may include, but are not limited to, the following as the
receiver deems necessary or advisable: (a) completing a
written inventory of all assets; (b) obtaining pertinent
information from all employees and other agents and all
accrued and unpaid commissions and compensation of each
such employee or agent; (c) videotaping all portions of
the above-referenced business locations; (d) securing the
20
above-referenced business locations by changing the locks
and disconnecting any computer modems or other means of
access to the computer or other records maintained at the
locations;
d. Conserve, hold, and manage all receivership assets,
and perform all acts necessary or advisable to preserve
the value of those assets in order to prevent any
irreparable loss, damage, or injury to consumers or
creditors of defendants Accredited Financial Services,
Inc., aka AFS Co., aka AFS, Inc.; Encore Acquisitions,
LLC, aka Encore LLC; Bessord Partnership, LLC, aka
Bessford; Heartland Consulting, aka Hartland Consulting;
GRD Management, aka GRD Property Management; Minnesota
One Mortgage, Inc.; Wegs Enterprise LLC; Wegs Properties,
LLC, aka Wegs Property Management, LLC; Wissota Property
Management, LLC; and/or KMC Properties, LLC, including
but not limited to obtaining an accounting of the assets
and preventing transfer, withdrawal, or misapplication of
assets;
e. Manage and administer the operations of defendants
Accredited Financial Services, Inc., aka AFS Co., aka
AFS, Inc.; Encore Acquisitions, LLC, aka Encore LLC;
Bessord Partnership, LLC, aka Bessford; Heartland
Consulting, aka Hartland Consulting; GRD Management, aka
21
GRD Property Management; Minnesota One Mortgage, Inc.;
Wegs Enterprise LLC; Wegs Properties, LLC, aka Wegs
Property Management, LLC; Wissota Property Management,
LLC; and/or KMC Properties, LLC, until further order of
the court, by performing all incidental acts that the
receiver deems to be advisable or necessary;
f. Choose, engage, and employ attorneys, accountants,
appraisers, property managers, and other independent
contractors and technical specialists, with regard to the
operations of defendants Accredited Financial Services,
Inc., aka AFS Co., aka AFS, Inc.; Encore Acquisitions,
LLC, aka Encore LLC; Bessord Partnership, LLC, aka
Bessford; Heartland Consulting, aka Hartland Consulting;
GRD Management, aka GRD Property Management; Minnesota
One Mortgage, Inc.; Wegs Enterprise LLC; Wegs Properties,
LLC, aka Wegs Property Management, LLC; Wissota Property
Management, LLC; and/or KMC Properties, LLC as the
receiver deems advisable or necessary in the performance
of duties and responsibilities under the authority
granted by this preliminary injunction and order;
g. Make payments and disbursements from the
receivership estate that are necessary or advisable for
carrying out the directions of or exercising the
authority granted by this preliminary injunction and
22
order. The receiver shall apply to the court for prior
approval of any payment of any debt or obligation
incurred by defendants Accredited Financial Services,
Inc., aka AFS Co., aka AFS, Inc.; Encore Acquisitions,
LLC, aka Encore LLC; Bessord Partnership, LLC, aka
Bessford; Heartland Consulting, aka Hartland Consulting;
GRD Management, aka GRD Property Management; Minnesota
One Mortgage, Inc.; Wegs Enterprise LLC; Wegs Properties,
LLC, aka Wegs Property Management, LLC; Wissota Property
Management, LLC; and/or KMC Properties, LLC, prior to the
date of entry of this Preliminary Injunction and Order,
except payments that the receiver deems necessary or
advisable to secure assets of each of these defendants,
such as rental payments;
h. Communicate with, and respond to communications
from, all alleged victims of defendants fraud;
i. Maintain accurate records of all receipts and
expenditures that the receiver makes as the receiver
under this order; and
j. Liquidate and close any of the operations of
defendants Accredited Financial Services, Inc., aka AFS
Co., aka AFS, Inc.; Encore Acquisitions, LLC, aka Encore
LLC; Bessord Partnership, LLC, aka Bessford; Heartland
Consulting, aka Hartland Consulting; GRD Management, aka
23
GRD Property Management; Minnesota One Mortgage, Inc.;
Wegs Enterprise LLC; Wegs Properties, LLC, aka Wegs
Property Management, LLC; Wissota Property Management,
LLC; and/or KMC Properties, LLC that were involved in
violating 18 U.S.C. 1341 (mail fraud), 1343 (wire
fraud), or 1344(bank fraud).
10. Defendants and their officers, agents, directors,
servants, employees, salespersons, independent contractors,
corporations, subsidiaries, affiliates, successors, and assigns
shall fully cooperate with and assist the receiver.
11. Upon service of a copy of this preliminary injunction and
order, all banks, broker-dealers, savings and loans, escrow agents,
title companies, commodity trading companies, or other financial
institutions shall cooperate with all reasonable requests of the
receiver relating to implementation of this preliminary injunction
and order, including transferring funds at the receivers direction
and producing records related to the assets of defendants.
12. The receiver and all personnel hired by the receiver as
herein authorized, including counsel to the receiver and
accountants, are entitled to reasonable compensation for the
performance of duties pursuant to this preliminary injunction and
order and for the cost of actual out-of-pocket expenses incurred by
them, from the assets now held by or in the possession or control
of, or which may be received by, defendants. The receiver shall
24
file with the court and serve on defendants, periodic requests for
the payment of such reasonable compensation, with the first such
request filed no more than sixty (60) days after the date of this
preliminary injunction and order. The receiver shall not increase
the hourly rates used as the bases for such fee applications
without prior approval of the court.
13. The receiver shall file with the Clerk of Court a bond in
the sum of ,000 with sureties to be approved by the court,
conditioned that the receiver will well and truly perform the
duties of the office and abide by and perform all acts the court
directs.
14. The court shall retain jurisdiction of this matter for
all purposes.
15. Civil discovery during the pendency of this preliminary
injunction is stayed.
Dated: June 12, 2008
s/David S. Doty
David S. Doty, Judge
United States District Court
 

 
 
 

  What day were you injured?

  / /


  What caused your injuries?
Traffic/Bicycle Accident
Work-Related Injury
Wrongful Death
Dog Bite
Slip and Fall
Other:


  How have your injuries affected

  your life?

 


  What kinds of medical care
  professionals have you seen?

 


  What has your treatment cost?

 

  Is Insurance Involved?
My insurance may cover
        this.

Someone else's insurance
        may cover this.

I already filed a claim.
I rejected a settlement
        offer.

I accepted a settlement
        offer.

  Were there any witnesses?
Bystanders Witnessed This.
Police Responded and Filed
        a Police Report

Police Responded but Did
        Not File a Police Report


 

 

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Copyright © Michael E. Douglas, Attorney at Law, Saint Paul MN. All Rights Reserved.
Minnesota Law Firm representing Personal Injury, Car / Auto Accident, Workers Compensation, Medical Malpractice, Social Security Disability claims.
Dedicated to Injured Workers, Victims of Negligence, Car Accidents, Victims of Fraud, and those in need of legal assistance.