CENTRAL. DISTRICT OF CALIFORNIA
SOUTHERN DIVISION
SECURITIES AND EXCHANGE COMMISSION,
Plaintiff,
V.
HITSGALORE.COM INC. STEPHEN J. BRADFORD, LIFE FOUNDATION TRUST AND JEANETTE B. WILCHER,
Defendants.
Case No. SACV 01-1133 GLT (ANx)
PROPOSED [note: “proposed “ is crossed out in the original] ORDER OF CIVIL CONTEMPT AGAINST DEFENDANTS LIFE FOUNDATION TRUST AND JEANETTE WILCHER; ORDER THAT JEANETTE WILCHER SURRENDER HER PASSPORT(S)
This matter came on for hearing on March 24, 2003, on the motion of Plaintiff Securities And Exchange Commission ("Commission") for order of civil contempt against Defendants Jeanette B. Wilcher ("Wilcher") and Life Foundation Trust ("Life Foundation") based upon their failure to pay disgorgement ordered by this Court in its final judgment entered July 30, 2002; and for an order that Wilcher surrender her passport(s) until she pays the ordered disgorgement and interest.
After considering the parties' memoranda, the evidence submitted by the parties, and the arguments made at the hearing, the Court finds as follows:
1. On July 30, 2002, the Court entered its Final Judgment Of Permanent Injunction And Other Relief Against Defendants Life Foundation Trust and Jeanette B. Wilcher ("Judgment"). Among other things, the Judgment requires each of the defendants to disgorge their ill-gotten gains, plus prejudgment interest thereon, to the Commission. Specifically, defendant Wilcher and Life Foundation were ordered to jointly and severally disgorge $1,024,418.50 together with $167,005.41 in prejudgment interest. (See Judgment, ¶ V.) These amounts were ordered disgorged within thirty days of entry of the Judgment, or by August 29, 2002. (See id.) The Commission presented evidence that none of the defendants has disgorged any monies as required by the Judgment, and that they each had notice of the Judgment.
2. None of the defendants has disgorged any monies or assets as required by the Judgment, and each defendant had notice of the Judgment.
3. During the pendency of this Court's Judgment against Wilcher, Wilcher traveled out of the United States. Given Wilcher's past violations of this Court's orders, including the Judgment, there is a substantial risk that, should Wilcher retain her passport(s), she will leave the United States without satisfying her Court-ordered obligation to pay disgorgement, to the further detriment of defrauded investors.
4. On February 13, 2003, the Commission filed and served its ex parte application for an order to show cause why (1) Wilcher and Life Foundation should not be held in civil contempt based upon their failure to pay any of the ordered disgorgement and prejudgment interest, and (2) defendant Wilcher should not be ordered to surrender her passport(s) until she pays the ordered disgorgement and interest.
5. On February 20, 2003, the Court entered the order to show cause requested by the Commission ("OSC").
6. On February 20, 2003, the Commission received the Court's OSC by facsimile and served that OSC by email, Federal Express, and U.S. mail upon Wilcher and Life Foundation. Wilcher and Life Foundation accordingly had noticeof the Court's OSC.
7. Neither Wilcher nor Life Foundation filed or served on the Commission an opposition to the issuance of the requested judgment of civil
∑ contempt and order that Wilcher surrender her passport(s).
8. The Court has considered all evidence and argument presented by the
∑ parties. In its moving papers, the Commission established its prima facie case that each of the defendants violated and is in contempt of the Judgment in that none of them has paid the ordered disgorgement. The Commission has met its burden to establish, by clear and convincing evidence, and the Court finds, that each Defendant is in contempt of the Judgment.
Based upon the foregoing:
I.
IT IS HEREBY ORDERED that the motion by the Commission for order of civil contempt against Wilcher and Life Foundation and for an order that defendant Wilcher surrender her passport(s) until she pays the ordered disgorgement and interest is GRANTED.
II.
IT IS FURTHER ORDERED that a bench warrant shall immediately issue for defendant Wilcher, and that defendant Wilcher shall be remanded to the custody of
∑ the United States Marshal's Service until she purges herself of contempt by (1) paying the ordered disgorgement and prejudgment interest or (2) making the
∑ required categorical and detailed showing of inability to pay the ordered
∑ disgorgement and interest.
III.
IT IS FURTHER ORDERED that defendant Life Foundation shall pay an escalating daily fine, starting at $1,000 and doubling every day thereafter, for every day following entry of this Order of Contempt that Life Foundation fails purges itself of contempt by (1) paying the ordered disgorgement and prejudgment interest or (2) making the required categorical and detailed showing of inability to pay the ordered disgorgement and interest.
IV.
IT IS FURTHER ORDERED that defendant Wilcher shall immediately surrender all passports she holds to the Court, such passports to be held by the Court until Wilcher pays the ordered disgorgement and interest.
Dated:
GARY L. TAYLOR
HONORABLE GARY L. TAYLOR
UNITED STATES DISTRICT JUDGE |
