Securities and Exchange Commission v. Beasley et al, No. 2:2022cv00612 - Document 310 (D. Nev. 2022)

Court Description: ORDER Granting 305 Stipulation Plaintiff Securities And Exchange Commission's, The Receiver's, Defendant Christopher Humphries', And Non-Party Jessica Humphries' First Stipulation Concerning Living Expenses. Signed by Judge Cristina D. Silva on 9/15/2022. (Copies have been distributed pursuant to the NEF - YAW)
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Securities and Exchange Commission v. Beasley et al Doc. 310 Case 2:22-cv-00612-CDS-EJY Document 310 Filed 09/15/22 Page 1 of 8 1 2 3 4 5 6 7 12 JARROD L. RICKARD, Bar No. 10203 jlr@skrlawyers.com KATIE L. CANNATA, Bar No. 14848 klc@skrlawyers.com SEMENZA KIRCHER RICKARD 10161 Park Run Drive, Suite 150 Las Vegas, Nevada 89145 Telephone: (702) 835-6803 Facsimile: (702) 920-8669 13 Attorneys for Receiver 8 9 10 11 Greenberg Traurig, LLP 10845 Griffith Peak Drive, Suite 600 Las Vegas, NV 89135 (702) 792-3773 (702) 792-9002 (fax) KARA B. HENDRICKS, Bar No. 07743 hendricksk@gtlaw.com JASON K. HICKS, Bar No. 13149 hicksja@glaw.com KYLE A. EWING, Bar No 14051 ewingk@gtlaw.com GREENBERG TRAURIG, LLP 10845 Griffith Peak Drive, Suite 600 Las Vegas, Nevada 89135 Telephone: (702) 792-3773 Facsimile: (702) 792-9002 DAVID R. ZARO* dzaro@allenmatkins.com JOSHUA A. del CASTILLO* jdelcastillo@allenmatkins.com MATTHEW D. PHAM* mpham@allenmatkins.com *admitted pro hac vice ALLEN MATKINS LECK GAMBLE MALLORY & NATSIS LLP 865 South Figueroa Street Suite 2800 Los Angeles, California 90017-2543 Telephone: (213) 622-5555 Facsimile: (213) 620-8816 14 UNITED STATES DISTRICT COURT 15 DISTRICT OF NEVADA 16 17 18 19 20 21 22 23 SECURITIES AND EXCHANGE COMMISSION, Case No. 2:22-cv-00612-CDS-EJY PLAINTIFF SECURITIES AND EXCHANGE COMMISSION’S, THE RECEIVER’S, DEFENDANT CHRISTOPHER HUMPHRIES’, AND NON-PARTY JESSICA HUMPHRIES’ FIRST STIPULATION CONCERNING LIVING EXPENSES Plaintiff, vs. MATTHEW WADE BEASLEY et al. Defendants; THE JUDD IRREVOCABLE TRUST et al. Relief Defendants. 24 Plaintiff United States Securities and Exchange Commission (“SEC”, “Commission”, or 25 “Plaintiff”), the Court’s appointed Receiver, Geoff Winkler of American Fiduciary Services LLC 26 (the “Receiver”), defendant Christopher Humphries (“Mr. Humphries”), relief defendant CJ 27 Investments, LLC (“Relief Humphries Company”), and non-party Jessica Humphries (“Mrs. 28 Humphries”) (collectively the “Humphries”) hereby provide this first stipulation regarding the Page 1 of 8 Dockets.Justia.com Case 2:22-cv-00612-CDS-EJY Document 310 Filed 09/15/22 Page 2 of 8 1 following and ask this Court to enter an ORDER consistent with this stipulation regarding the 2 release of living expenses for Mrs. Humphries, her husband defendant Christopher Humphries, 3 and their four children. Greenberg Traurig, LLP 10845 Griffith Peak Drive, Suite 600 Las Vegas, NV 89135 (702) 792-3773 (702) 792-9002 (fax) 4 I. RECITALS 5 WHEREAS, on April 12, 2022, Plaintiff filed its Complaint in this matter, alleging 6 violations of the registration and/or antifraud provisions of the federal securities laws by the eleven 7 named Defendants (who include Mr. Humphries), and the receipt of ill-gotten proceeds of such 8 violations by the eleven Relief Defendants (which include CJ Investments, LLC). (Dkt. No. 1.) 9 WHEREAS, on April 13, 2022, the Commission filed an Ex Parte Application for Entry 10 of a Temporary Restraining Order and other equitable relief as to Defendants and an asset freeze 11 as to Defendants and Relief Defendants (Dkt. No. 2), which was granted by the Court on April 13, 12 2022. (Dkt. No. 3.) 13 14 WHEREAS, on or about April 15th, 2022, pursuant to the Court’s asset freeze, Wells Fargo bank and U.S. Bank froze the following accounts with the following balances: 15 a) US Bank Personal Checking xx8067 Balance $1,338,691.24 16 b) US Bank Personal Savings xx1591 Balance $500.00 17 c) US Bank CJ Investments xx0526 Balance $1,128,269.48 18 d) US Bank CJ Humphries Foundation xx0913 Balance $346,704.08 19 e) Wells Fargo Personal Checking xx5547 Balance $47,203.75 20 f) Wells Fargo Personal Savings xx2164 Balance $1,100.27 21 g) Wells Fargo Teen Checking xx0829 Balance $17.65 22 h) Wells Fargo Doterra Essential Oils xx8722 Balance $5,186.21 23 i) Wells Fargo Anderson Dairy Creamery xx 1189 Balance $2.24 24 j) Wells Fargo CJ Investments LLC xx6358 Balance $52,650.58 k) Wells Fargo BugRaiders Checking xx0377 Balance $51,314.74 l) Wells Fargo BugRaiders Savings xx9745 Balance $1,800.34 m) Wells Fargo JCH Consulting LLC xx1243 Balance $8,427.38 25 26 27 28 /// Page 2 of 8 Greenberg Traurig, LLP 10845 Griffith Peak Drive, Suite 600 Las Vegas, NV 89135 (702) 792-3773 (702) 792-9002 (fax) Case 2:22-cv-00612-CDS-EJY Document 310 Filed 09/15/22 Page 3 of 8 1 WHEREAS, on April 21, 2022, the Court issued its Order Entering Preliminary 2 Injunction, Asset Freeze, and other Equitable Relief as to Defendants and Relief Defendants, 3 which, inter alia, continued the asset freeze imposed by the Court on April 13, 2022. (Dkt. No. 4 56.) The Court’s Order provided that “any allowance for necessary and reasonable living expenses 5 will be granted only upon good cause shown by application to the Court with notice and an 6 opportunity for the Commission to be heard.” 7 WHEREAS, at the show cause hearing before the Court on April 21, 2022, the Court 8 directed counsel for the Humphries to discuss the issues with the SEC and seek to resolve the 9 issues surrounding the Humphries’ living expenses in an amicable manner. If no voluntary 10 arrangement could be reached, then the Humphries could bring the unresolved issues to the Court 11 for decision. 12 WHEREAS, on June 3, 2022, the Court appointed a Receiver, Geoff Winkler, and ordered 13 him to take possession of the personal assets of Mr. Humphries during the pendency of this Action. 14 (the “Receivership Order”)(Dkt. 88). 15 16 WHEREAS, on or about June 24, 2022, the Receiver took possession of the following personal assets from Wells Fargo bank with the following balances transferred to the Receiver: 17 a) Wells Fargo Personal Checking xx5547 Balance $47,203.75 18 b) Wells Fargo Doterra Essential Oils xx8722 Balance $5,186.21 19 c) Wells Fargo CJ Investments LLC xx6358 Balance $52,650.58 20 d) Wells Fargo BugRaiders Checking xx0377 Balance $51,314.74 21 e) Wells Fargo JCH Consulting LLC xx1243 Balance $8,427.38 22 WHEREAS, on June 29, 2022, the SEC filed an Amended Complaint (Dkt. 118). 23 WHEREAS, now counsel for Plaintiff, the Receiver, and the Humphries have reached the 24 following agreement as to an allowance for living expenses for the Humphries and jointly provide 25 this proposed agreement for approval by the Court. 26 /// 27 /// 28 /// Page 3 of 8 Case 2:22-cv-00612-CDS-EJY Document 310 Filed 09/15/22 Page 4 of 8 1 II. 2 1. Living expenses for Mr. and Mrs. Humphries and their four minor children are 3 approved for a six month period in the amount of $6,630 per month for a total of 4 $39,780. 5 Greenberg Traurig, LLP 10845 Griffith Peak Drive, Suite 600 Las Vegas, NV 89135 (702) 792-3773 (702) 792-9002 (fax) STIPULATED TERMS 2. In lieu of paying the living expenses identified above, the $39,780 will be credited 6 towards the outstanding amount owed on the mortgage for the Humphries residence 7 in Huntington Beach (the precise address is listed in the sealed assets list filed with 8 the Court April 20, 2022; DKT 37) and the Receiver will forbear the right to seek 9 any remaining amounts from the Humphries relating to the Huntington Beach 10 property and will utilize the proceeds of the sale of the property to address any 11 deficit. 12 3. 13 The Receiver and the SEC shall permit the Humphries to retain the following vehicles. The Humphries agree to maintain insurance on these vehicles: 14 a. 2021 Chevrolet Tahoe (NV License Plate ALC402) registered to CJ 15 Investments that Mr. Humphries drives as his primary vehicle; 16 b. 2020 Tesla Model X (NV License Plate ALC406) registered to CJ 17 Investments that Mrs. Humphries drives as her primary vehicle; 18 c. 2014 Nissan Frontier (NV License Plate 120U84) registered to BugRaiders 19 Pest Control which is used as a work vehicle by the BugRaiders business 20 (replacement for the totaled 2022 Chevrolet Colorado work truck); and 21 d. 2021 Chevrolet Colorado (NV License Plate 729N71) registered to 22 BugRaiders Pest Control which is used as a work vehicle by the BugRaiders 23 business. 24 4. The Humphries agree to cooperate with the Receiver and the SEC to turn over no 25 later than August 31, 2022, to the Receiver at the Huntington Beach house the 26 following vehicles: 27 /// 28 /// Page 4 of 8 Case 2:22-cv-00612-CDS-EJY Document 310 Filed 09/15/22 Page 5 of 8 1 a. 1977 VW Bus (NV License Plate 5Y78) registered to CJ Investments; and 2 b. 2021 Tomberlin Golf Cart (CA License Plate 8XYS271) registered to Mr. 3 4 5. The Humphries agree to cooperate with the Receiver and the SEC to turn over no 5 later than September 30, 2022, to the Receiver at the Huntington Beach house the 6 following vehicle: 7 a. 2021 Jeep Wrangler (NV License Plate xx0242) registered to Mr. and Mrs. 8 Humphries which their 16 year old daughter has been using while attending 9 high school. 10 Greenberg Traurig, LLP 10845 Griffith Peak Drive, Suite 600 Las Vegas, NV 89135 (702) 792-3773 (702) 792-9002 (fax) and Mrs. Humphries. 6. Once they turn over the keys of the vehicles identified in paragraphs 4 and 5 to the 11 Receiver, the Humphries have no responsibility to maintain these vehicles, pay 12 taxes, insure them, or pay any other costs associated with any of these vehicles. 13 7. The Humphries have moved back into their home in Henderson, Nevada (the 14 precise address is listed in the sealed assets list filed with the Court April 20, 2022; 15 DKT 37). Mrs. Humphries and their four children have vacated the residence in 16 Huntington Beach as promised by August 15, 2022 (the precise address is listed in 17 the sealed assets list filed with the Court April 20, 2022; DKT 37) to live full-time 18 in the Henderson house. The Humphries agree to turn over the keys and access to 19 the house by no later than August 31, 2022. Once they turn over the keys to the 20 Receiver, the Humphries have no responsibility to maintain the home, the 21 mortgage, the taxes, the insurance or any other costs associated with the Huntington 22 Beach house. 23 8. Mrs. Humphries’ parents have also moved into the Henderson house. Mr. and Mrs. 24 Humphries have a homestead recorded against their Henderson house. The house 25 is owned by the Humphries’ Living Trust. The Receiver and the SEC agree to 26 permit the Humphries and their extended family to reside in this Henderson home 27 for the time being in light of their cooperation and the large number of 28 family members living in the Henderson house. If the Receiver or the SEC wants Page 5 of 8 Case 2:22-cv-00612-CDS-EJY Document 310 Filed 09/15/22 Page 6 of 8 1 the Humphries to leave the Henderson house, the SEC, the Receiver and the 2 Humphries will meet and confer at least 60 days ahead of any requested date to 3 leave to discuss the request. While they reside in the Henderson house, the 4 Humphries agree to maintain insurance on the Henderson house, pay the property 5 taxes, and pay the HOA fees. 9. The Humphries own a rental property in Hurricane, Utah (the precise address is 6 listed in the sealed assets list filed with the Court April 20, 2022; DKT 37) which 7 currently has a tenant residing in the property; the current lease expires in or about 8 February 2022. The Humphries agree to cooperate with the Receiver and the SEC 9 to turn over to the Receiver the Hurricane rental property so that the Receiver can 10 sell it. It is not responsibility of the Humphries to pay the tenant or evict the tenant. Greenberg Traurig, LLP 10845 Griffith Peak Drive, Suite 600 Las Vegas, NV 89135 (702) 792-3773 (702) 792-9002 (fax) 11 The Humphries agree to turn over the owner’s set of the keys to the Receiver by 12 September 9, 2022. Once they turn over the keys to the Receiver, the Humphries 13 have no responsibility to maintain the home, the taxes, the insurance or any other 14 costs associated with the Hurricane house. 15 10. Wells Fargo Bank froze the account of Nathan Hall (Account XXX0420; the full 16 account number is listed in the sealed assets list filed with the Court April 20, 2022; 17 DKT 37). Nathan Hall, who is Mrs. Humphries’ uncle, needs the funds and has 18 supplied a declaration signed by Nathan Hall to the Receiver and the SEC. Within 19 10 days of this Order, the monies in this Nathan Hall account shall be unfrozen and 20 made available against to Mr. Hall. The account statements for this account shall 21 not be subject to the requirements set forth below in paragraph 11. 22 11. Mr. Humphries and Mrs. Humphries must provide to counsel to the Commission 23 and counsel to the Receiver, without further request or subpoena, their monthly 24 account statements. These consist of (a) Jessica Humphries new checking account 25 at Farmers & Merchants and her old Ally Bank account; (b) Christopher Humphries 26 new checking account at Ally Bank; and (c) the Bug Raiders new checking account 27 at East West Bank, for review and inspection by no later than the 5th of each month 28 while this stipulation is in effect. The Humphries agree to provide the earlier Page 6 of 8 Case 2:22-cv-00612-CDS-EJY Document 310 Filed 09/15/22 Page 7 of 8 1 statements for these accounts from January 1, 2022 or opening of these new 2 accounts (whichever is earlier) through the date of this stipulation. 3 statements shall be provided to counsel to the Commission by email to Casey R. 4 Fronk (fronkc@sec.gov) and Tracy S. Combs (combst@sec.gov). 5 statements 6 (geoff@americanfiduciaryservices.com) and to his counsel Kara Hendricks 7 (hendricksk@gtlaw.com). Greenberg Traurig, LLP 10845 Griffith Peak Drive, Suite 600 Las Vegas, NV 89135 (702) 792-3773 (702) 792-9002 (fax) 8 12. shall also be provided to the These These Receiver To the extent Mr. Humphries and Mrs. Humphries earn additional, going-forward 9 income that they demonstrate, to the satisfaction of counsel for the Commission 10 and the Receiver, is unconnected to the conduct alleged in the Amended Complaint, 11 such income may be used for the payment of necessary and reasonable living 12 expenses and a portion of the civil and criminal attorney’s fees and defense costs 13 needed for this Action and the pending parallel criminal investigation. As of the 14 date of this stipulation, such income consists of the following: 15 a. the income and other earnings of Jessica Humphries at her law firm in 16 California that began on or about May 18, 2022 and future earnings at a law 17 firm in Nevada after the August 2022 move back to Henderson; and 18 b. the income and future earnings from the Bug Raiders Pest Control business. 19 /// 20 /// 21 /// 22 /// 23 /// 24 /// 25 /// 26 /// 27 /// 28 /// Page 7 of 8 Case 2:22-cv-00612-CDS-EJY Document 310 Filed 09/15/22 Page 8 of 8 1 2 3 Before October 31, 2022, the Humphries reserve the right to seek the release of additional living expenses and housing expenses, and monies for attorneys’ fees and costs. Dated: September 14, 2022. 4 /s/Casey R. Fronk __________________ TRACY S. COMBS CASEY R. FRONK Attorneys for Plaintiff U.S. Securities and Exchange Commission 5 6 7 8 Dated: September 14, 2022. 9 Defendant Christopher Humphries and relief Defendant CJ Investments, LLC 11 /s/ Kendelee Leascher Works_______________ PETER CHRISTIANSEN KENDELEE WORKS 12 CHRISTIANSEN TRIAL LAWYERS 10 Greenberg Traurig, LLP 10845 Griffith Peak Drive, Suite 600 Las Vegas, NV 89135 (702) 792-3773 (702) 792-9002 (fax) U.S. SECURITIES AND EXCHANGE COMMISSION 13 14 Dated: September 14, 2022. /s/ Pamela L. Johnston ___________________ FOLEY & LARDNER LLP THOMAS CARLUCCI PAMELA JOHNSTON 555 S. Flower Street, Suite 3300 Los Angeles, CA 90071 15 16 17 18 19 20 21 22 23 24 Non-Party Jessica Humphries Dated: September 14, 2022. GREENBERG TRAURIG, LLP By: Kara B. Hendricks___________________ KARA B. HENDRICKS JASON K. HICKS KYLE A. EWING 10845 Grifffith Peak Dr. Ste. 600 Las Vegas, NV 89135 Attorneys for Receiver Geoff Winkler IT IS SO ORDERED: 25 26 27 28 CRISTINA D. SILVA UNITED STATES DISTRICT JUDGE September 15, 2022 DATED: _________________________ Page 8 of 8