Securities and Exchange Commission v. David B. Kaplan, Esq., et al., Civil Action No. 3:16-cv-00270 (D. Nevada-Reno filed May 19, 2016)

SEC Obtains Asset Freeze Against Attorney Accused of Misrepresenting Investments and Misappropriating Investor Funds

The Securities and Exchange Commission recently announced that it filed fraud charges and obtained an asset freeze against an attorney and Nevada resident David B. Kaplan and three entities that he controls based on an allegedly fraudulent scheme that raised $15.8 million from 26 investors in eight states.

The SEC’s complaint, unsealed yesterday, was filed on May 19, 2016, in the U.S. District Court for the District of Nevada-Reno, and charges Kaplan and the three entities, Synchronized Organizational Solutions International Ltd. (SOSI), Synchronized Organizational Solutions LLC (SOS), and Manna International Enterprises Ltd. According to the complaint, Kaplan repeatedly lied to prospective investors by stating that their funds would be invested in a low-risk, private off-shore trading program that would be provide estimated monthly profits of 10 percent. The complaint alleges that Kaplan did not use investor funds as promised but instead:

• Used at least $2.3 million for his personal benefit, including $592,000 to buy and re-model a condominium in Nevada, and $79,394 wired to a St. Kitts law firm to obtain St. Kitts and Nevis passports and/or citizenship for Kaplan and his wife;
• Sent $1.1 million to his wife, Lisa Kaplan, a purported charitable foundation, and a corporation that Kaplan controlled;
• Invested at least $360,000 in an investment program offered by WMA Enterprises LLC, an allegedly fraudulent scheme at the center of a federal criminal indictment in Ohio; and
• Made approximately $1.8 million in Ponzi-like payments to other investors.

On May 20, 2016, the court issued a temporary restraining order freezing the assets of Kaplan, SOSI, and the other defendant entities, and prohibiting them from soliciting, accepting or depositing any monies from actual or prospective investors while the order is in effect. The order further requires Kaplan and the defendants to repatriate foreign assets within seven days. In addition, the court issued an asset freeze against Lisa M. Kaplan, the Water-Walking Foundation Inc., and Manna Investments LLC, the relief defendants who are alleged to have received investor funds to which they have no legitimate claim.

The SEC brought its emergency enforcement action to ensure that no further securities law violations are committed, to secure assets from potential dissipation, and to safeguard investors from further harm. The SEC’s complaint seeks to have Kaplan, his firms, and the relief defendants return their allegedly ill-gotten gains so that any remaining funds can be returned to victims of the alleged scheme. The SEC also is seeking permanent injunctions against Kaplan, SOSI, SOS and Manna International, and to have them pay a civil penalty.

The SEC’s complaint charges that Kaplan, SOSI, SOS and Manna International violated Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and charges Kaplan with violating Section 15(a) of the Exchange Act.

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With extensive courtroom, arbitration and mediation experience and an in-depth understanding of elder abuse, exploitation and securities law, our firm provides all of our clients with the personal service they deserve. Handling cases worth $25,000 or more, we represent clients throughout Florida and across the United States, as well as for foreign individuals that invested in U.S. banks or brokerage firms. Contact us to arrange your free initial consultation.

At the Boca Raton Law Office of Russell L. Forkey, we represent clients throughout South and Central Florida, including Fort Lauderdale, West Palm Beach, Boca Raton, Sunrise, Plantation, Coral Springs, Deerfield Beach, Pompano Beach, Delray, Boynton Beach, Hollywood, Lake Worth, Royal Palm Beach, Manalapan, Jupiter, Gulf Stream, Wellington, Fort Pierce, Stuart, Palm City, Jupiter, Miami, Orlando, Maitland, Winter Park, Altamonte Springs, Lake Mary, Heathrow, Melbourne, Palm Bay, Cocoa Beach, Vero Beach, Daytona Beach, Deland, New Smyrna Beach, Ormand Beach, Broward County, Palm Beach County, Dade County, Orange County, Seminole County, Martin County, Brevard County, Indian River County, Volusia County and Monroe County, Florida. The law office of Russell L. Forkey also represents South American, Canadian and other foreign residents that do business with U.S. financial institutions, investment advisors, brokerage and precious metal firms.

Securities and Exchange Commission v. Bernard H. Butts, Jr., Fotios Geivelis, Jr., also known as Frank Anastasio, Worldwide Funding III Limited LLC, Douglas J. Anisky, Sidney Banner, Express Commercial Capital LLC, James Baggs (Defendants), Bernard H. Butts, Jr. PA, Butts Holding Corporation, Margaret A. Hering, Global Worldwide Funding Ventures, Inc., and PW Consulting Group LLC (Relief Defendants), Civil Action No. 13-23115-CIV-MARTINEZ-MCALILEY (Southern District of Florida)

Florida-Based Attorney Ordered to Pay Nearly $4 Million in Court Judgment of Prime Bank Investment Scheme Case

The Securities and Exchange Commission recently announced that a federal judge has ordered a Miami-based attorney to pay nearly $4 million in a consent judgment of an SEC case against him for orchestrating a prime bank investment scheme. The money will be returned to harmed investors.

Bernard H. Butts Jr. was charged by the SEC in September 2013 for acting as an escrow agent for a supposed international trading program that raised approximately $3.5 million from investors. However, the program didn’t really exist, and Butts instead doled out investor funds to enrich himself and others. The SEC obtained an emergency order in U.S. District Court for the Southern District of Florida to freeze the assets of Butts and his companies Bernard H. Butts Jr. PA and Butts Holding Corporation before investor proceeds could be fully dissipated.

The Honorable Jose E. Martinez issued an order dated July 10, 2014, requiring Butts and his companies to pay $1,691,608 in disgorgement and $96,232.99 in prejudgment interest as well as a penalty of $2,059,284.19. Butts and his wife Margaret A. Hering also must pay an additional $100,000 in disgorgement and $4,570.82 in prejudgment interest.

The SEC will return the money to investors through a Fair Fund. More than $1.9 million already has been deposited from accounts belonging to Butts and his companies into the registry of the court following the asset freeze instituted at the SEC’s request last year. And the court’s order requires the transfer to the court of more than $2 million separately seized by the U.S. Secret Service from accounts belonging to Butts and his companies. The SEC will then submit a plan to the court for distribution of these collected funds back to investors.

Butts has consented to be barred from the securities industry or offering penny stock, and agreed to be suspended from practicing as an attorney on behalf of any entity regulated by the SEC.

Contact Us:

With extensive courtroom, arbitration and mediation experience and an in-depth understanding of elder abuse, exploitation and securities law, our firm provides all of our clients with the personal service they deserve. Handling cases worth $25,000 or more, we represent clients throughout Florida and across the United States, as well as for foreign individuals that invested in U.S. banks or brokerage firms. Contact us to arrange your free initial consultation.

At the Fort Lauderdale Law Office of Russell L. Forkey, we represent clients throughout South and Central Florida, including Fort Lauderdale, West Palm Beach, Boca Raton, Sunrise, Plantation, Coral Springs, Deerfield Beach, Pompano Beach, Delray, Boynton Beach, Hollywood, Lake Worth, Royal Palm Beach, Manalapan, Jupiter, Gulf Stream, Wellington, Fort Pierce, Stuart, Palm City, Jupiter, Miami, Orlando, Maitland, Winter Park, Altamonte Springs, Lake Mary, Heathrow, Melbourne, Palm Bay, Cocoa Beach, Vero Beach, Daytona Beach, Deland, New Smyrna Beach, Ormand Beach, Broward County, Palm Beach County, Dade County, Orange County, Seminole County, Martin County, Brevard County, Indian River County, Volusia County and Monroe County, Florida. The law office of Russell L. Forkey also represents South American, Canadian and other foreign residents that do business with U.S. financial institutions, investment advisors, brokerage and precious metal firms.

Securities and Exchange Commission v. K2 Unlimited, Inc., 211 Ventures, LLC, Diane Glatfelter, Robert Rice, and Robert Anderson, Civil Action No. 1:11-cv-11649

SEC Obtains Final Judgment Against Defendant in Fictitious Investment Scheme

The Securities and Exchange Commission recently announced that on April 4, 2014, a Massachusetts federal court entered a final judgment by consent against defendant Robert C. Rice, of Tallahassee, Florida, in a securities fraud case filed by the Commission in 2011. The final judgment, entered by the Honorable Mark L. Wolf, imposes on Rice a permanent injunction against future violations of antifraud and other provisions of the federal securities laws and orders him to pay disgorgement, prejudgment interest and a civil penalty totaling $525,896.51.

In its Complaint, filed September 19, 2011, the Commission alleged that beginning in 2007, Rice, with other defendants, purported to offer direct investments in fraudulent trading programs involving “bank guarantees,” promising sky-high returns with guarantees against loss. In fact, the Commission alleges that the bank guarantees were fictional and the trading programs non-existent, and that Rice and other defendants together defrauded investors of more than $1.8 million. The final judgment permanently enjoins Rice from violating Section 17(a) of the Securities Act of 1933; Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder; Sections 5(a) and 5(c) of the Securities Act; and Section 15(a) of the Exchange Act. The final judgment also ordered that Rice is liable for disgorgement in the amount of $310,500, representing profits gained as a result of the conduct alleged in the Complaint, with prejudgment interest of $85,396.51, and imposed a civil penalty in the amount of $130,000. Rice consented to the entry of the final judgment without admitting or denying the allegations in the Commission’s Complaint.

On March 13, 2013, the court entered final judgments by default against defendants 211 Ventures, LLC, and Robert S. Anderson, imposing judgments totaling more than $2.3 million in disgorgement, prejudgment interest and civil penalties, and permanently enjoining both defendants from future violations of the antifraud and other provisions of the federal securities laws. The Commission’s case against defendants Diane Glatfelter and K2 Unlimited, Inc. continues.

Contact Us:

With extensive courtroom, arbitration and mediation experience and an in-depth understanding of elder abuse, exploitation and securities law, our firm provides all of our clients with the personal service they deserve. Handling cases worth $25,000 or more, we represent clients throughout Florida and across the United States, as well as for foreign individuals that invested in U.S. banks or brokerage firms. Contact us to arrange your free initial consultation.

At the Fort Lauderdale Law Office of Russell L. Forkey, we represent clients throughout South and Central Florida, including Fort Lauderdale, West Palm Beach, Boca Raton, Sunrise, Plantation, Coral Springs, Deerfield Beach, Pompano Beach, Delray, Boynton Beach, Hollywood, Lake Worth, Royal Palm Beach, Manalapan, Jupiter, Gulf Stream, Wellington, Fort Pierce, Stuart, Palm City, Jupiter, Miami, Orlando, Maitland, Winter Park, Altamonte Springs, Lake Mary, Heathrow, Melbourne, Palm Bay, Cocoa Beach, Vero Beach, Daytona Beach, Deland, New Smyrna Beach, Ormand Beach, Broward County, Palm Beach County, Dade County, Orange County, Seminole County, Martin County, Brevard County, Indian River County, Volusia County and Monroe County, Florida. The law office of Russell L. Forkey also represents South American, Canadian and other foreign residents that do business with U.S. financial institutions, investment advisors, brokerage and precious metal firms.