Securities and Exchange Commission v. Eric J. EJ Dalius et al, No. 2:2018cv08497 - Document 148 (C.D. Cal. 2023)
Court Description: FINAL JUDGMENT AS TO DEFENDANTS ERIC J. DALIUS AND SAIVIAN LLC by Judge Fred W. Slaughte. IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that Defendants are permanently restrained and enjoined FURTHER ORDERED, ADJUDGED, AND DECREED that Defendants are l iable, jointly and severally, for disgorgement of $20,080,784.41 together with prejudgment interest thereon in the amount of $919,215.59; Defendant Eric J. Dalius is liable for a civil penalty in the amount of $1,500,000 pursuant to Se ction 20(d) of the Securities Act and Section 21(d)(3) of the Exchange Act; and Defendant Saivian LLC is liable for a civil penalty in the amount of $1,500,000 pursuant to Section 20(d) of the Securities Act and Section 21(d)(3) of the Exchange Act. The civil penalties shall be paid to the Securities and Exchange Commission within 30 days after entry of this Final Judgment. The total disgorgement and prejudgment interest of $21,000,000 shall be paid pursuant to the terms of the payment schedule set forth in Section VI below. Related to: Stipulation for Judgment 144 . See document for further information. (jp)
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Securities and Exchange Commission v. Eric J. EJ Dalius et al Doc. 148 1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 CENTRAL DISTRICT OF CALIFORNIA 10 11 12 SECURITIES AND EXCHANGE COMMISSION, Plaintiff, 13 vs. 14 15 16 17 18 19 20 ERIC J. “EJ” DALIUS, PROFESSIONAL REALTY ENTERPRISES, INC., SAIVIAN LLC, SAVINGS NETWORK APP LLC, SAVING NETWORK APP LIMITED, SAIVIAN INT LIMITED, and REALTY SHARE NETWORK LLC, Case No. 2:18-cv-08497-FWS-E Hon. Fred W. Slaughter FINAL JUDGMENT AS TO DEFENDANTS ERIC J. DALIUS AND SAIVIAN LLC Defendants. 21 22 23 /// 24 /// 25 /// 26 27 28 Dockets.Justia.com 1 The Securities and Exchange Commission having filed a Complaint and 2 Defendants Eric J. Dalius and Saivian LLC (together, “Defendants”) having 3 entered a general appearance; consented to the Court’s jurisdiction over 4 Defendants and the subject matter of this action; consented to entry of this Final 5 Judgment without admitting or denying the allegations of the Complaint (except as 6 to jurisdiction and except as otherwise provided herein in paragraph VII); waived 7 findings of fact and conclusions of law; and waived any right to appeal from this 8 Final Judgment: I. 9 10 IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that 11 Defendants are permanently restrained and enjoined from violating, directly or 12 indirectly, Section 10(b) of the Securities Exchange Act of 1934 (the “Exchange 13 Act”) [15 U.S.C. § 78j(b)] and Rule 10b-5 promulgated thereunder [17 C.F.R. 14 § 240.10b-5], by using any means or instrumentality of interstate commerce, or of 15 the mails, or of any facility of any national securities exchange, in connection with 16 the purchase or sale of any security: 17 (a) to employ any device, scheme, or artifice to defraud; 18 (b) to make any untrue statement of a material fact or to omit to state a 19 material fact necessary in order to make the statements made, in the 20 light of the circumstances under which they were made, not 21 misleading; or 22 23 (c) to engage in any act, practice, or course of business which operates or would operate as a fraud or deceit upon any person. 24 IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that, as 25 provided in Federal Rule of Civil Procedure 65(d)(2), the foregoing paragraph also 26 binds the following who receive actual notice of this Final Judgment by personal 27 service or otherwise: (a) Defendants’ officers, agents, servants, employees, and 28 attorneys; and (b) other persons in active concert or participation with Defendants 1 1 or with anyone described in (a). II. 2 3 IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED 4 that Defendants are permanently restrained and enjoined from violating Section 5 17(a) of the Securities Act of 1933 (the “Securities Act”) [15 U.S.C. § 77q(a)] in 6 the offer or sale of any security by the use of any means or instruments of 7 transportation or communication in interstate commerce or by use of the mails, 8 directly or indirectly: 9 (a) to employ any device, scheme, or artifice to defraud; 10 (b) to obtain money or property by means of any untrue statement of a 11 material fact or any omission of a material fact necessary in order to 12 make the statements made, in light of the circumstances under which 13 they were made, not misleading; or 14 (c) to engage in any transaction, practice, or course of business which operates or would operate as a fraud or deceit upon the purchaser. 15 16 IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that, as 17 provided in Federal Rule of Civil Procedure 65(d)(2), the foregoing paragraph also 18 binds the following who receive actual notice of this Final Judgment by personal 19 service or otherwise: (a) Defendants’ officers, agents, servants, employees, and 20 attorneys; and (b) other persons in active concert or participation with Defendants 21 or with anyone described in (a). III. 22 23 IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED 24 that Defendants are permanently restrained and enjoined from violating Section 5 25 of the Securities Act [15 U.S.C. § 77e] by, directly or indirectly, in the absence of 26 any applicable exemption: 27 28 (a) Unless a registration statement is in effect as to a security, making use of any means or instruments of transportation or communication in 2 1 interstate commerce or of the mails to sell such security through the 2 use or medium of any prospectus or otherwise; 3 (b) Unless a registration statement is in effect as to a security, carrying or 4 causing to be carried through the mails or in interstate commerce, by 5 any means or instruments of transportation, any such security for the 6 purpose of sale or for delivery after sale; or 7 (c) Making use of any means or instruments of transportation or 8 communication in interstate commerce or of the mails to offer to sell 9 or offer to buy through the use or medium of any prospectus or 10 otherwise any security, unless a registration statement has been filed 11 with the Commission as to such security, or while the registration 12 statement is the subject of a refusal order or stop order or (prior to the 13 effective date of the registration statement) any public proceeding or 14 examination under Section 8 of the Securities Act [15 U.S.C. § 77h]. 15 IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that, as 16 provided in Federal Rule of Civil Procedure 65(d)(2), the foregoing paragraph also 17 binds the following who receive actual notice of this Final Judgment by personal 18 service or otherwise: (a) Defendants’ officers, agents, servants, employees, and 19 attorneys; and (b) other persons in active concert or participation with Defendants 20 or with anyone described in (a). 21 22 IV. IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that pursuant 23 to Section 21(d)(5) of the Exchange Act [15 U.S.C. § 78u(d)(5)], Defendants are 24 permanently restrained and enjoined from offering, operating, or participating in a 25 pyramid scheme defined for purposes of this order as any marketing or sales 26 program wherein a participant is compensated or promised compensation solely or 27 primarily (a) for inducing another person to become a participant in the program, 28 or (b) if such induced person induces another to become a participant in the 3 1 program.1 2 IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that, as 3 provided in Federal Rule of Civil Procedure 65(d)(2), the foregoing paragraph also 4 binds the following who receive actual notice of this Final Judgment by personal 5 service or otherwise: (a) Defendants’ officers, agents, servants, employees, and 6 attorneys; and (b) other persons in active concert or participation with Defendants 7 or with anyone described in (a). 8 V. 9 IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED 10 that Defendants are liable, jointly and severally, for disgorgement of 11 $20,080,784.41 together with prejudgment interest thereon in the amount of 12 $919,215.59; Defendant Eric J. Dalius is liable for a civil penalty in the amount of 13 $1,500,000 pursuant to Section 20(d) of the Securities Act and Section 21(d)(3) of 14 the Exchange Act; and Defendant Saivian LLC is liable for a civil penalty in the 15 amount of $1,500,000 pursuant to Section 20(d) of the Securities Act and Section 16 21(d)(3) of the Exchange Act. The civil penalties shall be paid to the Securities 17 and Exchange Commission within 30 days after entry of this Final Judgment. The 18 total disgorgement and prejudgment interest of $21,000,000 shall be paid pursuant 19 to the terms of the payment schedule set forth in Section VI below. 20 Defendants may transmit payment electronically to the Commission, which 21 will provide detailed ACH transfer/Fedwire instructions upon request. Payment 22 may also be made directly from a bank account via Pay.gov through the SEC 23 website at http://www.sec.gov/about/offices/ofm.htm. Defendants may also pay by 24 certified check, bank cashier’s check, or United States postal money order payable 25 to the Securities and Exchange Commission, which shall be delivered or mailed to 26 27 28 1 See In re Koscot Interplanetary, Inc., 86 F.T.C. 1106 (1975); SEC v. Glenn W. Turner Enterprises, Inc., 474 F.2d 476 (9th Cir. 1973); Webster v. Omnitrition Int’l, Inc., 79 F.3d 776 (9th Cir. 1996) and subsequent cases. 4 1 2 Enterprise Services Center Accounts Receivable Branch 6500 South MacArthur Boulevard Oklahoma City, OK 73169 3 4 and shall be accompanied by a letter identifying the case title, civil action number, 5 and name of this Court; Defendant’s name as a defendant in this action; and 6 specifying that payment is made pursuant to this Final Judgment. 7 Defendants shall simultaneously transmit photocopies of evidence of 8 payment and case identifying information to the Commission’s counsel in this 9 action. By making this payment, Defendants relinquish all legal and equitable 10 right, title, and interest in such funds and no part of the funds shall be returned to 11 Defendants. 12 The Commission may enforce the Court’s judgment for disgorgement and 13 prejudgment interest by using all collection procedures authorized by law, 14 including, but not limited to, moving for civil contempt at any time after 365 days 15 following entry of this Final Judgment. 16 The Commission may enforce the Court’s judgment for penalties by the use 17 of all collection procedures authorized by law, including the Federal Debt 18 Collection Procedures Act, 28 U.S.C. § 3001 et seq., and moving for civil 19 contempt for the violation of any Court orders issued in this action. 20 The Commission shall hold the funds, together with any interest and income 21 earned thereon (collectively, the “Fund”), pending further order of the Court. The 22 Commission may propose a plan to distribute the Fund subject to the Court’s 23 approval. Such a plan may provide that the Fund shall be distributed pursuant to 24 the Fair Fund provisions of Section 308(a) of the Sarbanes-Oxley Act of 2002. 25 The Court shall retain jurisdiction over the administration of any distribution of the 26 Fund, and the Fund may only be disbursed pursuant to an Order of the Court. 27 28 Regardless of whether any such Fair Fund distribution is made, amounts ordered to be paid as civil penalties pursuant to this Final Judgment shall be treated 5 1 as penalties paid to the government for all purposes, including all tax purposes. To 2 preserve the deterrent effect of the civil penalty, Defendants shall not, after offset 3 or reduction of any award of compensatory damages in any Related Investor 4 Action based on Defendants’ payment of disgorgement in this action, argue that he 5 or it is entitled to, nor shall he or it further benefit by, offset or reduction of such 6 compensatory damages award by the amount of any part of Defendants’ payment 7 of a civil penalty in this action (“Penalty Offset”). If the court in any Related 8 Investor Action grants such a Penalty Offset, Defendants shall, within 30 days after 9 entry of a final order granting the Penalty Offset, notify the Commission’s counsel 10 in this action and pay the amount of the Penalty Offset to the United States 11 Treasury or to a Fair Fund, as the Commission directs. Such a payment shall not 12 be deemed an additional civil penalty and shall not be deemed to change the 13 amount of the civil penalty imposed in this Final Judgment. For purposes of this 14 paragraph, a “Related Investor Action” means a private damages action brought 15 against a Defendant by or on behalf of one or more investors based on substantially 16 the same facts as alleged in the Complaint in this action. 17 18 VI. Defendants shall pay the total of disgorgement and prejudgment interest due 19 of $21,000,000 within 365 days of entry of this Final Judgment. Defendants shall 20 pay post-judgment interest accrued pursuant to 28 U.S.C. § 1961 on any unpaid 21 amount of the total of disgorgement and prejudgment interest due of $21,000,000 22 commencing 30 days after the entry of this Final Judgment. Payments shall be 23 deemed made on the date they are received by the Commission. Prior to making 24 the final payment set forth herein, Defendants shall contact the staff of the 25 Commission for the amount due for the final payment. 26 If Defendants fail to make any payment by the date agreed and/or in the 27 amount agreed according to the schedule set forth above, all outstanding payments 28 under this Final Judgment, as well as post-judgment interest, accrued pursuant to 6 1 28 U.S.C. § 1961 on any unpaid amounts due after 30 days of the entry of Final 2 Judgment, minus any payments made, shall become due and payable immediately 3 at the discretion of the staff of the Commission without further application to the 4 Court. VII. 5 6 IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that, solely 7 for purposes of exceptions to discharge set forth in Section 523 of the Bankruptcy 8 Code, 11 U.S.C. § 523, the allegations in the complaint are true and admitted by 9 Defendants, and further, any debt for disgorgement, prejudgment interest, civil 10 penalty or other amounts due by Defendants under this Final Judgment or any 11 other judgment, order, consent order, decree or settlement agreement entered in 12 connection with this proceeding, is a debt for the violation by Defendants of the 13 federal securities laws or any regulation or order issued under such laws, as set 14 forth in Section 523(a)(19) of the Bankruptcy Code, 11 U.S.C. § 523(a)(19). 15 16 VIII. IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that this 17 Court shall retain jurisdiction of this matter for the purposes of enforcing the terms 18 of this Final Judgment. 19 20 IX. There being no just reason for delay, pursuant to Rule 54(b) of the Federal 21 Rules of Civil Procedure, the Clerk is ordered to enter this Final Judgment 22 forthwith and without further notice. 23 24 25 26 Date: February 6, 2023 Hon. Fred W. Slaughter UNITED STATES DISTRICT JUDGE 27 28 7
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