Securities and Exchange Commission v. Kent R.E. Whitney et al, No. 8:2019cv00499 - Document 319 (C.D. Cal. 2023)

Court Description: FINAL JUDGMENT AS TO DEFENDANT KENT R.E. WHITNEY 303 by Judge James V. Selna, Related to: NOTICE OF MOTION AND MOTION for Judgment Plaintiff's Agreed Motion for Entry of Final Judgments As To Defendants Church For The Healthy Self a /k/a CHS Trust, CHS Asset Management, Inc., Kent Whitney, David L. Parrish, ICare Financial Solution 303 IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that Defendants is permanently restrained and enjoined from violating, directly or indirectly, Sect ion 10(b) of the Exchange Act [15 U.S.C. § 78j(b)] and Rule 10b-5 promulgated thereunder [17 C.F.R. § 240.10b-5], by using any means or instrumentality of interstate commerce, or of the mails, or of any facility of any national securitie s exchange, in connection with the purchase or sale of any security: IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that Defendant is liable, on a joint and several basis with CHS Asset ManagementInc. and The Church for the Healthy Self a/k/a C HS Trust, for disgorgement of illgotten gains in the amount of $10,086,465.95, plus prejudgment interest of $1,828,363.52, for a total of $11,914,829.47. In light of: (1) the Judgment and Probation/Commitment Order entered in the para llel criminal matter, United States v. Kent R. E. Whitney, Crim. No. 20-cr-0052-JLS (C.D. Cali.) (the "Criminal Case"), wherein Defendant was sentenced to a 14-year incarceration period and ordered to pay restitution of $22,662,668.58 ; and (2) the actions of the Court appointed Receiver in this matter to marshal assets for the benefit of investors, said disgorgement and prejudgment interest obligation is deemed satisfied and no civil penalty will be imposed. [SEE JUDGMENT FOR ADDITIONAL INFORMATION] (es)

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Securities and Exchange Commission v. Kent R.E. Whitney et al Doc. 319 1 2 3 4 5 6 7 UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA SOUTHERN DIVISION 8 9 10 11 12 SECURITIES AND EXCHANGE COMMISSION, 13 vs. KENT R.E. WHITNEY, et al., 16 17 18 19 20 FINAL JUDGMENT AS TO DEFENDANT KENT R.E. WHITNEY [303] Plaintiff, 14 15 Case No. 8:19-cv-499-JVS-KES Defendants, and HA T. “KELLY” HOANG, et al., Relief Defendants. 21 22 The Securities and Exchange Commission filed a Complaint and Defendant 23 Kent R.E. Whitney (“Defendant”): entered a general appearance; consented to the 24 Court’s jurisdiction over Defendant and the subject matter of this action; consented 25 to entry of this Final Judgment (“Judgment”); waived findings of fact and 26 conclusions of law; and waived any right to appeal from this Judgment: 27 28 1 Dockets.Justia.com 1 2 I. IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that 3 Defendants is permanently restrained and enjoined from violating, directly or 4 indirectly, Section 10(b) of the Exchange Act [15 U.S.C. § 78j(b)] and Rule 10b-5 5 promulgated thereunder [17 C.F.R. § 240.10b-5], by using any means or 6 instrumentality of interstate commerce, or of the mails, or of any facility of any 7 national securities exchange, in connection with the purchase or sale of any 8 security: 9 (a) to employ any device, scheme, or artifice to defraud; or 10 (b) to make any untrue statement of a material fact or to omit to state a 11 material fact necessary in order to make the statements made, in the 12 light of the circumstances under which they were made, not 13 misleading; or 14 15 (c) to engage in any act, practice, or course of business which operates or would operate as a fraud or deceit upon any person. 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 Order by personal service or 19 otherwise: (a) Defendant’s officers, agents, servants, employees, and attorneys; and 20 (b) other persons in active concert or participation with Defendant or with anyone 21 described in (a). 22 23 II. IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED 24 that Defendant is permanently restrained and enjoined from violating Section 17(a) 25 of the Securities Act [15 U.S.C. § 77q(a)] in the offer or sale of any security by the 26 use of any means or instruments of transportation or communication in interstate 27 commerce or by use of the mails, directly or indirectly: 28 2 1 (a) to employ any device, scheme, or artifice to defraud; or 2 (b) to obtain money or property by means of any untrue statement of a 3 material fact or any omission of a material fact necessary in order to 4 make the statements made, in light of the circumstances under which 5 they were made, not misleading; or 6 7 (c) to engage in any transaction, practice, or course of business which operates or would operate as a fraud or deceit upon the purchaser. 8 IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that, as 9 provided in Federal Rule of Civil Procedure 65(d)(2), the foregoing paragraph also 10 binds the following who receive actual notice of this Order by personal service or 11 otherwise: (a) Defendant’s officers, agents, servants, employees, and attorneys; and 12 (b) other persons in active concert or participation with Defendant or with anyone 13 described in (a). 14 15 III. IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED 16 that Defendant is liable, on a joint and several basis with CHS Asset Management 17 Inc. and The Church for the Healthy Self a/k/a CHS Trust, for disgorgement of ill- 18 gotten gains in the amount of $10,086,465.95, plus prejudgment interest of 19 $1,828,363.52, for a total of $11,914,829.47. In light of: (1) the Judgment and 20 Probation/Commitment Order entered in the parallel criminal matter, United States 21 v. Kent R. E. Whitney, Crim. No. 20-cr-0052-JLS (C.D. Cali.) (the “Criminal 22 Case”), wherein Defendant was sentenced to a 14-year incarceration period and 23 ordered to pay restitution of $22,662,668.58; and (2) the actions of the Court- 24 appointed Receiver in this matter to marshal assets for the benefit of investors, said 25 disgorgement and prejudgment interest obligation is deemed satisfied and no civil 26 penalty will be imposed. 27 IV. 28 3 1 IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that the 2 Consent is incorporated herein with the same force and effect as if fully set forth 3 herein, and that Defendant shall comply with all of the undertakings and 4 agreements set forth therein. 5 V. 6 IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that, for 7 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 Defendant, and further, any debt for disgorgement, prejudgment interest, civil 10 penalty or other amounts due by Defendant under this Final Judgment or any other 11 judgment, order, consent order, decree or settlement agreement entered in 12 connection with this proceeding, is a debt for the violation by Defendant 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 VI. 16 The Asset Freeze provisions of the Court’s March 14, 2019 Temporary 17 Restraining Order and Orders: (1) Freezing Assets; Prohibiting the Destruction of 18 Documents; (3) Granting Expedited Discovery; (4) Requiring Defendants to 19 Surrender Passports; and (5) Requiring Accountings (“TRO”) [Doc. 15], shall 20 terminate only as to Defendant upon the entry of this Judgment. 21 22 23 24 The Court’s March 14, 2019 Order Appointing Receiver [Doc. 16] shall remain in full force and effect pending further order of this Court. VII. IT IS FURTHER ORDERED that this Court shall retain jurisdiction over 25 this action for the purpose of implementing and carrying out the terms of all orders 26 and decrees which may be entered herein and to entertain any suitable application 27 or motion for additional relief within the jurisdiction of this Court. 28 4 1 2 VIII. There being no just reason for delay, pursuant to Rule 54(b) of the Federal 3 Rules of Civil Procedure, the Clerk is ordered to enter this Judgment forthwith and 4 without further notice. 5 IT IS SO ORDERED. 6 7 Dated: July 14, 2023 8 9 10 ________________________________ UNITED STATES DISTRICT JUDGE JAMES V. SELNA 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 5

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