Current Cases
Travis Correll
Case Name:
Securities and Exchange Commission v. Travis E. Correll, individually and doing business as Horizon Establishment; Gregory Thompson; Dwight J. Johnson; Harry Robinson "Robbie" Gowdey, individually and doing business as Atlas and Jericho Productions; Grant Cardno; Neuland D. Midkiff; Travis Correll & Company, Inc.; Sovereign Capital Investments, S.A.; TNT Office Supply, Inc. and Joshua Tree Group LLC; Defendants, and Banner Shield, LLC; Hospitality Management Group, Inc.; Creative Wealth Ventures, LLC and JTA Enterprises, Defendants Solely for Purposes of Equitable Relief.
Case Number:
05 CV 472
Court:
United States District Court for Eastern District of Texas
Hays Role:
Receiver Financial Consultants to the Receiver
The Securities & Exchange Commission filed the above reference complaint in December 2005 in the United States District Court in Eastern District of Texas. Mr. Hays was appointed as Receiver by the Honorable Richard A. Schell. The receivership is for six individuals and six entities that sold over $400 million in investments in an offshore bank deposit program. The principal entered a guilty plea. The case generated significant press and TV coverage including stories in the Atlanta Journal Constitution, Sports Illustrated, and the Dallas Morning News.
INVESTOR UPDATE APRIL 20, 2012
Below is an updated listing of the largest remaining case issues and recoveries and where they stand. We still intend to mail one final distribution check upon resolution of these remaining issues but that may change depending on the timing of the recoveries.
(1) Gregory Thompson Oil and Gas Interests – Gregory Thompson holds a lease on producing oil and gas property in South Texas. The Receiver has been administering Thompson’s 8% interest in the lease and collecting the revenue to reduce Thompson’s disgorgement and civil penalty obligation to the Receivership Estate. The Receiver received an offer to purchase the lease for considerable consideration. Soon after the offer was received, the heirs of the grantor (the “Browne Family”) of the lease threatened litigation to terminate the lease. A declaratory judgment action (“the State Court Action”) was commenced in South Texas by the other working interest owners to settle the title. On July 5, 2011, the Receiver removed the State Court Action to federal court, to be determined by Judge Schell, the presiding judge in this action. The Browne family moved to remand the matter to the state court on August 4, 2011. The Receiver and other parties timely responded to the motion to remand on August 22, 2011, the Browne family filed its reply to the response on September 14, 2011 and the Receiver sur-replied on September 21, 2011. On March 31, 2012, Judge Schell entered an Order remanding the case to the state court. The Receiver is currently reviewing his options on this matter.
(2) Dwight Johnson Disgorgement - The Receiver is seeking to collect a $3.9 million disgorgement judgment from Dwight Johnson. One of Mr. Johnson’s remaining assets is his home, which is owned free and clear of liens. Mr. Johnson had the property appraised and is seeking to take a loan against it to pay part of his disgorgement obligation. So far, he has sold some vehicles and raised $12,000, which was paid to the Receiver to be applied to his disgorgement obligation.
(3) Claim by the FBI to funds recovered by the Receiver – The Federal Bureau of Investigation (FBI) has made a claim to a substantial amount of money that was recovered from a third-party in the early stages of this case. In short, there is concern that those funds may have been the proceeds of an unrelated fraudulent scheme. Due to the nature of the ongoing investigation, we are unable to provide any further information at this time about the source or amount of the funds, however, the Receiver continues to work toward resolving this matter.
(4) Sentinel Funds Bankruptcy Claim – On or about March 22, 2012, the Receiver received a distribution check for $1,005,728.68, relating to a claim filed in the Sentinel Funds, Inc. bankruptcy case pending in the Bankruptcy Court for the Southern District of Florida. Prior to receiving the distribution check, an investigative firm hired by Travis Correll prior to the establishment of the Receivership made a demand for payment of $180,000 for their ‘success fee’ relating to the recovery from Sentinel Funds. The Receiver disputes the success fee and intends to file a motion with the District Court for resolution of the disputed claim.
Court Docket Activity
December 7, 2005 – Order Appointing Receiver
December 7, 2005 – Ex Parte Temporary Restraining Order, Order Freezing Assets, Requiring an Accounting, Authorizing Expedited Discovery and Granting Other Emergency Relief
December 7, 2005 – Declaration of Ronda J. Blair
December 7, 2005 – Declaration of Leonard A. Zawistowski, Jr.
December 13, 2005 – Agreed Order of Preliminary Injunction and Other Equitable Relief as to Defendant Gregory Thompson
December 13, 2005 – Agreed Order of Preliminary Injunction and Other Equitable Relief as to Defendant Dwight J. Johnson
December 13, 2005 – Agreed Order of Preliminary Injunction and Other Equitable Relief as to Defendant Harry Robinson “Robbie” Gowdey
December 13, 2005 – Order of Preliminary Injunction and Other Equitable Relief as to Defendants Neulan D. Midkiff and Joshua Tree Group LLC
January 23, 2006 – Receiver’s First Interim Report – January 23, 2006
March 20, 2006 – Joint Motion for an Order to Show Cause and an Order Holding Defendant Neuland D. Midkiff in Civil Contempt – March 20, 2006
Exhibit A
Exhibit B
Exhibit C
Exhibit D
Exhibit E
Exhibit F
March 20, 2006 – Declaration of Marshal Gandy – March 20, 2006
March 20, 2006 – Declaration of Mark C. King – March 20, 2006
March 23, 2006 – Docket Activity Report for the Period from December 7, 2005 to March 23, 2006
June 22, 2006 – Ancestral Trail Order
July 3, 2006 – Amended Complaint
July 14, 2006 – Motion to Settle with New York Hilton
July 26, 2006 – Order Approving Settlement with New York Hilton
October 31, 2006 – Agreed Judgement as to Defendant Dwight Johnson
October 31, 2006 – Agreed Judgement as to Defendant Gregory Thompson
October 31, 2006 – Agreed Judgement as to Defendant Harry “Robbie” Gowdey
October 31, 2006 – Agreed Judgement as to Defendant Travis Correll
December 11, 2006 – Motion for Preliminary Injunction Against Sitton et al
December 11, 2006 – Complaint Against Kerry Sitton et al
December 11, 2006 – Final Judgement by Default Against Sovereign Capital Investments
December 14, 2006 – Order to Consolidate Sitton Case with Correll et al Case
September 21, 2007 – Amended Order Appointing Receiver
April 25, 2008 – Interim MOTION for Attorney Fees for Receiver’s Twenty Fifth Interim Application for Payment of Professional Fees and Expenses Incurred in Lead Case Correll in February 2008 and Brief in Support by S Gregory Hays
Exhibit A – Receiver Invoice for Feb 2008
Exhibit B – HFC Invoice for Feb 2008
Exhibit C – Troutman Sanders Invoice for Feb 2008
Exhibit D – QSCL Invoice for Feb 2008
Exhibit E – Bray and Freeman Invoice Feb 2008
Text of Proposed Order
May 8, 2008 – Receiver’s 26th Interim App for Payment of Fees and Expenses
Exhibit A – Receiver’s 26th Interim App for Payment
Exhibit B – Receiver’s 26th Interim App for Payment
Exhibit C – Receiver’s 26th Interim App for Payment
Exhibit D – Receiver’s 26th Interim App for Payment
Exhibit E – Receiver’s 26th Interim App for Payment
Proposed Order – Receiver’s 26th Interim App for Payment
June 26, 2008 – 27th Fee Application
Exhibit A – 27th Fee Application
Exhibit B – 27th Fee Application
Exhibit C – 27th Fee Application
Exhibit D – 27th Fee Application
Exhibit E – 27th Fee Application
Proposed Order – 27th Fee Application
August 18, 2008 – 28th Fee Application
Exhibit A – 28th Fee Application
Exhibit B – 28th Fee Application
Exhibit C – 28th Fee Application
Exhibit D – 28th Fee Application
Exhibit E – 28th Fee Application
Exhibit F – 28th Fee Application
September 29, 2008 – 29th Fee Application
Exhibit A – 29th Fee Application
Exhibit B – 29th Fee Application
Exhibit C – 29th Fee Application
Exhibit D – 29th Fee Application
Exhibit E – 29th Fee Application
Proposed Order – 29th Fee Application
October 21, 2008 – 30th Fee Application
Exhibit A – 30th Fee Application
Exhibit B – 30th Fee Application
Exhibit C – 30th Fee Application
Exhibit D – 30th Fee Application
Exhibit E – 30th Fee Application
Proposed Order – 30th Fee Application
November 5, 2008 – 31th Fee Application
Exhibit A – 31st Fee Application
Exhibit B – 31st Fee Application
Exhibit C – 31st Fee Application
Exhibit D – 31st Fee Application
Exhibit E – 31st Fee Application
Proposed Order – 31st Fee Application
November 14, 2008- Motion to Approve the Plan for Claims Administration and Distribution of Proceeds
November 14, 2008 – Plan for Claims Administration and Distribution of Proceeds
November 14, 2008 – Notice of the Motion
December 2, 2008 – Court Approved Plan for Claims Administration and Distribution of Proceeds
March 25, 2009 – 34th Fee ApplicationDecember 15, 2008 – 32nd Fee Application
Exhibit A – 32nd Fee Application
Exhibit B – 32nd Fee Application
Exhibit C – 32nd Fee Application
Exhibit D – 32nd Fee Application
Exhibit E – 32nd Fee Application
Proposed Order – 32nd Fee Application
February 9, 2009 – 33rd Fee Application
Exhibit A – 33rd Fee Application
Exhibit B – 33rd Fee Application
Exhibit C – 33rd Fee Application
Exhibit D – 33rd Fee Application
Exhibit E – 33rd Fee Application
Proposed Order – 33rd Fee Application
Exhibit A – 34th Fee Application
Exhibit B – 34th Fee Application
Exhibit C – 34th Fee Application
Exhibit D – 34th Fee Application
Exhibit E – 34th Fee Application
Proposed Order – 34th Fee Application
April 22, 2009 – 35th Fee Application
Exhibit A – 35th Fee Application
Exhibit B – 35th Fee Application
Exhibit C – 35th Fee Application
Exhibit D – 35th Fee Application
Exhibit E – 35th Fee Application
Proposed Order – 35th Fee Application
May 6, 2009 – Motion to Approve Schedule of Claims and Distribution of Proceeds
Exhibit A – Receiver’s Plan for Claims Administration and Distribution of Proceeds
Exhibit B – Schedule of Allowed Investor Claims
Exhibit C – Schedule of Allowed Creditor Claims
Exhibit D – Schedule of Conditionally Allowed Claims
May 14, 2009 – 36th Fee Application
Exhibit A – 36th Fee Application
Exhibit B – 36th Fee Application
Exhibit C – 36th Fee Application
Exhibit D – 36th Fee Application
Exhibit E – 36th Fee Application
Proposed Order – 36th Fee Application
June 20, 2009 – 37th Fee Application
September 4, 2009 – 38th Fee Application
Exhibit A – 38th Fee Application
Exhibit B – 38th Fee Application
Exhibit C – 38th Fee Application
Proposed Order – 38th Fee ApplicationSeptember 4, 2009 – Motion to Approve Schedule of Allowed Supplemental Claims and Distribution of Proceeds (Lead Case Only) and Brief in Support
Exhibit A – Schedule of Allowed Supplemental Claims
October 8, 2009 – 39th Fee Application
Exhibit A – 39th Fee Application
Exhibit B – 39th Fee Application
Exhibit C – 39th Fee Application
Exhibit D – 39th Fee Application
Exhibit E – 39th Fee Application
December 16, 2009 – 40th Fee Application
Exhibit A – 40th Fee Application
Exhibit B – 40th Fee Application
Exhibit C – 40th Fee Application
Exhibit D – 40th Fee Application
Exhibit E – 40th Fee Application
January 21, 2010 – Interim Joint Status Report
February 24, 2010 – 41st Fee Application
Exhibit A
Exhibit B
Exhibit C
Exhibit D
Exhibit EMarch 15, 2010 – MOTION for Entry of Judgment under Rule 54(b) Plaintiff’s Motion for Final Judgment Ordering Disgorgment Plus Prejudgment Interest and a Civil Penalty and Reciting Injunctions Previously Imposed Against Defendants Gregory W. Thompson, Dwight W. Johnson, and Grant Cardno by Securities and Exchange Commission.
Exhibit A Freeman Declaration Regarding Thompson
Exhibit B Thompson Prejudgment Interest Calculation
Exhibit C Askue Declaration Regarding Johnson
Exhibit D Johnson Prejudgment Interest Calculation
Exhibit E Askue Declaration Regarding Grant Cardno
Exhibit F Carndo Prejudgment Interest Calculation
Text of Proposed Order as to Gregory W. Thompson
Text of Proposed Order as to Dwight W. Johnson
Text of Proposed Order as to Grant Cardno
July 9, 2010 – 44th Fee Application
July 19, 2010 – Final Judgment Against Defendant Gregory W. Thompson Setting Monetary Relief and Reciting Previously Imposed Injunctions
July 19, 2010 – Final Judgment Against Defendant Grant Cardno Setting Monetary Relief and Reciting Previously Imposed Injunctions
July 19, 2010 – Final Judgment Against Defendant Dwight J. Johnson Setting Monetary Relief and Reciting Previously Imposed Injunctions
August 26, 2010 – 45th Fee Application
Exhibit A
Exhibit B
Exhibit C
Exhibit D
Exhibit E
Proposed Order
October 29, 2010 – 46th Fee Application
Investor Information
Receiver’s Letter and Investor Declaration Form dated January 6, 2006
Excel Template of Exhibit A of the Investor Declaration
Potential Tax Ramifications to Investors in the Bank Deposit Program
Receiver’s First Interim Report dated January 23, 2006
Receiver’s Second Interim Report dated December 6, 2006
Exhibit A
Bar Order Establishing Bar Date of 2/15/08
January 23, 2008 – Receiver’s Important Tax Notice to Investors
Receiver’s Letter to Investors dated January 25, 2008
Receiver’s Important Tax Notice to Investors dated February 29, 2008
June 27, 2008 – Receiver’s Letter to Investors
October 22, 2008 – Receiver’s Letter to Investors
January 14, 2009 – Receiver’s Letter to Investors
July 1, 2009 – Letter Accompanying the First Interim Distribution
October 8, 2009 – Receiver’s Letter to Investors
January 21, 2010 – Interim Joint Status Report
Non-Investor Claims
Non-Investor Proof of Claim Form
Click here to email the Receiver
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News Articles and Press Releases
SEC Ref Quits Amid Suit By Other SEC
Sports Illustrated
December 15, 2005
SEC Referee Resigns; Guthrie “Terminated”
The Atlanta Journal-Constitution 5G
December 15, 2005
Group Accused of Running Ponzi Investment Scheme
The Dallas Morning News
December 16, 2005
SEC Targets Forest Lake Man in Investment Scheme
Forest Lake Times
January 4, 2006
San Antonio Man’s Assets Frozen in Ponzi Probe
The San Antonio Express-News
January 6, 2005
International Fraud
ABC Eyewitness News 5 Minneapolis, MN
January 11, 2006
Video
How Deep is Ponzi Investment Scheme?
Forest Lake Times
“Apostle” was a Swindler, SEC Says: Forest Lake Church Founder Accused of Financial Scheme
Pioneer Press
January 16, 2006
Local Minister Probed by SEC for Investment Scheme
Securities Law 360
January 17, 2006
Hunt for Investment Scheme Assets Continues
Forest Lake Times
January 18, 2006
Hundreds of Investors Caught Up in Scam
American Press
January 22,
SEC Freezes $2 Million in Midkiff Assets
Forest Lake Times
January 24, 2006
Report Reveals Scam Generated Nearly $400 Million
American Press
January 25, 2006
Nearly $6 Million in Assets
American Press
January 25, 2006
Another Referee Fired in Fraud Probe
The Atlanta Journal-Constitution
January 26, 2006
SEC Referee Fired After Fraud Scheme
Sports Illustrated
January 27, 2006
More Legal Trouble for Neulan Midkiff
Forest Lake Times
April 5, 2006
Settlement in Hand for Assets of Neulan Midkiff Home in Forest Lake
Forest Lake Times
June 21, 2006
Ponzi Scheme Figure Lands in Jail
Forest Lake Times
January 9, 2007
Midkiff, 2nd FL Man Indicted in Bank Fraud Scheme
Forest Lake Times
January 10, 2007
Bank Fraud Investigation Moves to Criminal Phase
Forest Lake Times
January 24, 2007
Forest Lake Man Charged in Fraud Scheme
StarTribune.com
June 22, 2007
Cloud of Fraud Hangs Over Investor
StarTribune.com
September 1, 2007
November 30, 2007 – Local Man Admits to Ponzi Scheme
Atlanta Business Chronicle
November 30, 2007
Atlanta SEC Ref Going to Prison for Wire Fraud
Atlanta Business Chronicle
March 20, 2008
‘Apostle’ believers lost $30 million
Star Tribune
July 13, 2008
Suburban Pastor Guilty of Massive Fraud
Star Tribune
August 1, 2008
Neulan Midkiff handed 15 year prison sentence in Ponzi scheme
Forest Lake Times
October 16, 2008
Man Admits Ponzi Scheme
MySanAntonio.com
July 21, 2011
Other Useful Information and Links
For General Information on Prime Bank Schemes, please click on the following link to the SEC web site:
http://www.sec.gov/divisions/enforce/primebank.shtml
World Bank Group Warns of Fraudulent Investment Schemes Misrepresenting Its Name
The World Bank
Prime Bank Schemes and Financial Instrument Fraud
State of Oregon Division of Finance & Corporate Securites
Click here to email the Receiver
NOTE: If you are unable to view the documents, right click on the link and select the "Save Link As" menu item. You will then be able to download the document to your computer for viewing.