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Eleventh Circuit

Florida Federal Judge Mary Scriven Lets SEC’s $170M Real Estate Ponzi Scheme Lawsuit Continue

Brian Davison of EquiAlt, a Florida real estate company can’t escape claims that he scammed 1,100 investors out of more than $170 million.

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Investors sue Tampa firm accused of $170 million Ponzi scheme

Several investors are seeking class-action status for a federal lawsuit against EquiAlt and financial advisors who brought clients to the company.
FEB 28, 2020 | REPUBLISHED BY LIT: MARCH 9, 2021

Brian Davison is chief executive officer of EquiAlt, a Tampa-based real estate investment firm that faces two lawsuits, one from the U.S. Securities and Exchange Commission and another from a half-dozen investors (voluntarily dismissed) seeking class-action status, in U.S. District Court in Tampa.

Equialt bought this Safety Harbor home in a tax deed sale. Times (2015)

Real Estate Exec Brian Davison of EquiAlt LLC, Can’t Shed SEC Suit, M.D. Fla. Judge Mary Scrivan Says

The chief executive of a purported Florida real estate company can’t escape claims that he scammed 1,100 investors, some of them seniors, out of more than $170 million, a federal judge in Tampa ruled Monday, March 8th, 2021.

TAMPA — A Tampa real estate investment firm recently accused by federal officials of running a $170 million Ponzi scheme is now the focus of a second lawsuit filed by investors.

A half-dozen individual investors this week sued EquiAlt, company owner and chief executive officer Brian Davison, managing director Barry Rybicki and Tony James Michael Kelly, EquiAlt’s chief investment officer, in U.S. District Court in Tampa.

“This is unfortunately a very familiar fact pattern, especially here in Florida,” said the suit, which alleges “a classic Ponzi scheme” that used money from new investors to pay returns to previous investors. It seeks class-action status for more than 1,100 investors, many of them elderly residents of Florida, California and Arizona, who it says moved money out of individual retirement accounts to invest in EquiAlt.

The plaintiffs invested from $60,000 to more than $965,000 in EquiAlt, making them among the largest investors in the company, the suit says. Its lead plaintiff, Steven Rubenstein, is a retired physical education instructor from Arizona “who was seeking a safe source of retirement income” when he and his wife invested $75,000 with EquiAlt, the suit says.

Like the U.S. Securities and Exchange Commission, the investors contend that EquiAlt has not delivered on its promise to deliver annual returns of 8 percent or better. It also claims Davison and Rybicki have used $11 million in investor funds to buy Ferraris, Porsches and a Rolls Royce, as well as for expensive watches and to pay for travel on chartered jets.

The investors, who live in Arizona and California, also say in a court filing that about a half dozen financial advisers in those states played a key role in steering clients to EquiAlt in exchange for commissions of 10 to 14 percent that were not disclosed to investors. One Arizona financial adviser raised more than $15 million for EquiAlt and was paid $1.5 million in commissions by the firm.

Those advisers, who are also named as defendants in the lawsuit, have a responsibility to make sure investments are legitimate and suitable for their clients, said Jeffrey Sonn, an Aventura attorney representing investors.

“In this case, the investment was not legitimate and not suitable for anybody,” he said.

At the moment, the investors’ claims against EquiAlt and its principals have been stayed — essentially blocked — by the judge who put EquiAlt’s affairs into the hands of a receiver in the Securities and Exchange Commission case. But a second attorney for the investors said Friday that his clients can still go after the financial advisers and others, such as accountants, lawyers and bankers, who aided EquiAlt.

“The tip of the iceberg,” said Adam Moskowitz, a Coral Gables attorney whose firm is working on the case with Sonn and Bonnett Fairbourn Friedman & Balint of Phoenix, Ariz. “Even though we have a lot of what happened already, there is still a lot to uncover. … We are continuing our investigation before we add parties.”

Davison told the Tampa Bay Times in 2015 that EquiAlt’s business was based on finding real estate bargains at tax-deed sales, which take place when county officials auction off properties owned by taxpayers who are at least two years behind paying their property taxes.

Federal regulators say EquiAlt and its leaders promised investors that 90 percent of their money would be used to buy real estate in distressed markets, and that they would earn 8 to 10 percent annually as the properties were rented or flipped to new owners. EquiAlt described the opportunities as “secure,” “safe,” “low risk” or “conservative,” though the investors’ suit says they were anything but.

In addition to misappropriating funds for their own use and paying undisclosed commissions to unregistered sales agents, the suit contends that EquiAlt and its executives have:

• Used money from one of its internal real estate funds to buy property for another fund or for third-party entities owned by Davison.

• Using money from one fund to repay investors in another fund.

As a result, the suit says, although EquiAlt has raised more than $170 million to buy real estate, it currently owns only about $55.3 million in real property.

Davison, who earlier this month said “we deny the (Security and Exchange Commission’s) allegations and look forward to our day in court,” did not respond to a voicemail message and detailed text message to his mobile phone on Friday. Kelly did not respond to a request for comment the Times left at EquiAlt’s office.

Washington D.C. attorney Stephen Cohen, who previously said federal regulators presented “an inaccurate picture of Mr. Rybicki’s business dealings” and that “we look forward to addressing these matters with the court,” did not reply to a Times email or voicemail message to his office requesting comment on the investor’s suit.

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Eleventh Circuit

Attorney Lee Segal v. That German Bank and MD Fl. Still Rages On, In This Case.

The judiciary have been moving the motion for sanctions and attorney fees against Segal around the courts and it’s now landed into this case. Once LIF publishes, no doubt it will move again.

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BCP Management, LLC v. Deutsche Bank National Trust Company

(8:21-cv-00276-CPT)

District Court, M.D. Florida

NOV 9, 2021 | REPUBLISHED BY LIT: DEC 18, 2021

ORDER

Under 28 U.S.C. § 455, a judge must disqualify herself in any proceeding in which her impartiality might reasonably be questioned or if the judge has personal knowledge of disputed evidentiary facts concerning the proceeding.
28 U.S.C. § 455(a) & (b)(1).

When proper grounds exist, a judge has an affirmative and self-enforcing obligation to recuse herself sua sponte.

United States v. Kelly, 888 F.2d 732, 744 (11th Cir. 1989).

Today, I presided over a settlement conference for this case. (Doc. 53).

During the settlement conference, at which the parties reached an impasse, I became privy to certain confidential information.

Consequently, recusal is warranted.

The Clerk is directed to reassign this case to another magistrate judge by random draw and provide notice to the parties of the new magistrate judge.

ORDERED in Tampa, Florida on November 9, 2021.

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U.S. District Court
Middle District of Florida (Tampa)
CIVIL DOCKET FOR CASE #: 8:21-cv-00276-CPT

BCP Management, LLC v. Deutsche Bank National Trust Company
Assigned to: Magistrate Judge Christopher P. Tuite
Demand: $860,000

Case in other court:  Eighteenth Judicial Circuit Court, 20-CA-47023

Cause: 28:1441 Notice of Removal- Racketeering (RICO)

Date Filed: 02/02/2021
Date Terminated: 06/08/2021
Jury Demand: Plaintiff
Nature of Suit: 470 Racketeer/Corrupt Organization
Jurisdiction: Diversity
Plaintiff
BCP Management, LLC
as Trustee for 11717 81st Place Land Trust
represented by Lee Segal
Segal & Schuh Law Group, PL
18167 US Hwy 19 N Ste 100
Clearwater, FL 33764
727-824-5775
Fax: 888-672-7347
Email: lee@segalschuh.com
LEAD ATTORNEY
ATTORNEY TO BE NOTICED
V.
Defendant
Deutsche Bank National Trust Company
as Trustee, on behalf of the Registered Holders of GSAMP Trust 2005-HE3, Mortgage Pass-Through Certificates, Series 2005-HE3
represented by Benjamin Bruce Brown
Quarles & Brady, LLP
Suite 300
1395 Panther Ln
Naples, FL 34109-7874
239/659-5026
Fax: 239/213-5426
Email: benjamin.brown@quarles.com
LEAD ATTORNEY
ATTORNEY TO BE NOTICEDJoseph T. Kohn
Quarles & Brady, LLP
Suite 300
1395 Panther Ln
Naples, FL 34109-7874
239/262-5959
Fax: 239/213-5599
Email: joseph.kohn@quarles.com
ATTORNEY TO BE NOTICED

 

Date Filed # Docket Text
11/16/2021 56 NOTICE by Deutsche Bank National Trust Company of Impasse at Settlement Conference (Kohn, Joseph) (Entered: 11/16/2021)
11/10/2021 55 Case Reassigned to Magistrate Judge Christopher P. Tuite. New case number: 8:21-cv-276-CPT. Magistrate Judge Amanda Arnold Sansone no longer assigned to the case. (JNB) (Entered: 11/10/2021)
11/09/2021 54 ORDER of recusal. Signed by Magistrate Judge Amanda Arnold Sansone on 11/9/2021. (SFC) (Entered: 11/09/2021)
11/09/2021 53 Minute Entry. Virtual Proceedings held before Magistrate Judge Amanda Arnold Sansone: SETTLEMENT CONFERENCE held on 11/9/2021. Court declares an impasse. (Via Zoom) (CDM) (Entered: 11/09/2021)
11/08/2021 52 ENDORSED ORDER taking judicial notice of 32 Exhibits for Defendant’s Motion for Sanctions. Signed by Magistrate Judge Amanda Arnold Sansone on 11/8/2021. (SFC) (Entered: 11/08/2021)
11/01/2021 51 ORDER scheduling settlement conference. Settlement Conference set for 11/9/2021 at 10:00 AM in Zoom Video Conference before Magistrate Judge Amanda Arnold Sansone. See order for details. Signed by Magistrate Judge Amanda Arnold Sansone on 11/1/2021. (SFC) (Entered: 11/01/2021)
10/29/2021 50 NOTICE by Deutsche Bank National Trust Company re 47 Order directing compliance Amended Joint Notice of Availability for Status Conference (Kohn, Joseph) (Entered: 10/29/2021)
10/29/2021 49 NOTICE by Deutsche Bank National Trust Company re 47 Order directing compliance JOINT NOTICE OF AVAILABILITY FOR SETTLEMENT CONFERENCE (Kohn, Joseph) (Entered: 10/29/2021)
10/28/2021 48 Minute Entry. Virtual Proceedings held before Magistrate Judge Amanda Arnold Sansone: STATUS CONFERENCE held on 10/26/2021. (Via Zoom) (CDM) (Entered: 10/28/2021)
10/26/2021 47 ORDER directing parties to confer re: scheduling a settlement conference for 31 Motion for Sanctions and Attorneys Fees. See order for details. Response due 10/29/2021 at noon. Signed by Magistrate Judge Amanda Arnold Sansone on 10/26/2021. (SFC) (Entered: 10/26/2021)
10/07/2021 46 ORDER setting status conference for 10/26/2021 at 02:00 PM in Zoom Video Conference before Magistrate Judge Amanda Arnold Sansone. Signed by Magistrate Judge Amanda Arnold Sansone on 10/7/2021. (SFC) (Entered: 10/07/2021)
10/05/2021 45 NOTICE by Deutsche Bank National Trust Company re 44 Order setting status conference JOINT NOTICE OF AVAILABILITY FOR STATUS CONFERENCE (Kohn, Joseph) (Entered: 10/05/2021)
10/04/2021 44 ORDER directing parties to confer re: scheduling a status conference for 31 Motion for Sanctions and Attorneys Fees. See order for details. Signed by Magistrate Judge Amanda Arnold Sansone on 10/4/2021. (SFC) (Entered: 10/04/2021)
07/22/2021 43 RESPONSE in Opposition re 31 MOTION for Sanctions and Attorney’s Fees Against Lee Segal Personally filed by BCP Management, LLC. (Attachments: # 1 Affidavit Affidavit of Zachary Heathcote)(Segal, Lee) (Entered: 07/22/2021)
07/20/2021 42 ORDER denying 41 Motion to Reconsider Order granting in part Motion to File Excess Pages. The plaintiff’s response to the defendant’s 31 Motion for Attorney’s Fees is due by July 23, 2021 and cannot exceed twenty-five pages. Signed by Magistrate Judge Amanda Arnold Sansone on 7/20/2021. (MLM) (Entered: 07/20/2021)
07/16/2021 41 First MOTION for Reconsideration re 38 Order on Motion to Stay Order on Motion to File Excess Pages by BCP Management, LLC. (Segal, Lee) Modified on 7/19/2021 to edit text (CRH). (Entered: 07/16/2021)
06/28/2021 40 NOTICE of Filing Order by BCP Management, LLC. (Attachments: # 1 Order on Motion to Consolidate Cases)(Segal, Lee) Modified on 6/28/2021 to edit text (CRH). (Entered: 06/28/2021)
06/28/2021 39 NOTICE of supplemental authority by BCP Management, LLC. (Segal, Lee) (Entered: 06/28/2021)
06/25/2021 38 ORDER denying 36 Motion to Stay Response Deadline; granting in part 37 Motion to File Excess Pages. The plaintiff’s response to the defendant’s 31 Motion for Sanctions is due by July 12, 2021 and cannot exceed twenty-five pages. See order for further details. Signed by Magistrate Judge Amanda Arnold Sansone on 6/25/2021. (MLM) (Entered: 06/25/2021)
06/21/2021 37 First MOTION for Leave to File Other Document :Response to Defendant’s Motion for Attorney Fees and/or Sanctions to Exceed 20 Pages by BCP Management, LLC. (Segal, Lee) Modified on 6/22/2021 to change event type (CRH). (Entered: 06/21/2021)
06/14/2021 36 Amended MOTION to Stay re 35 Order directing response to motion Order pdf, 31 MOTION for Sanctions and Attorney’s Fees34 Notice (Other) Request to Abate Deadlines to Respond Pending Ruling on Motion to Consolidate by BCP Management, LLC. (Segal, Lee) Modified on 6/15/2021 to edit text (CRH). (Entered: 06/14/2021)
06/08/2021 35 ORDER dismissing the case for failure to prosecute; directing the Clerk to close the case; and directing the plaintiff to respond to 31 Motion for Sanctions and Attorney’s Fees by June 14, 2021. If no response is received, the defendant’s motion will be treated as unopposed. Signed by Magistrate Judge Amanda Arnold Sansone on 6/8/2021. (MLM) (Entered: 06/08/2021)
06/04/2021 34 NOTICE by BCP Management, LLC of Filing (Attachments: # 1 Motion to Consolidate Cases)(Segal, Lee) (Entered: 06/04/2021)
05/24/2021 33 ORDER TO SHOW CAUSE as to BCP Management, LLC. See order for details. Signed by Magistrate Judge Amanda Arnold Sansone on 5/24/2021. (MLM) (Entered: 05/24/2021)
05/24/2021 32 NOTICE to the Courts to take judicial notice regarding 31 MOTION for Sanctions and Attorney’s Fees Def’s Request for Judicial Notice and Notice of Intent to Use Summaries by Deutsche Bank National Trust Company. (Attachments: # 1 Exhibit 1, # 2 Exhibit 2)(Kohn, Joseph) (Entered: 05/24/2021)
05/24/2021 31 MOTION for Sanctions and Attorney’s Fees by Deutsche Bank National Trust Company. (Attachments: # 1 Exhibit 1, # 2 Exhibit 2, # 3 Exhibit 3)(Kohn, Joseph) (Entered: 05/24/2021)
04/21/2021 30 ORDER denying 24 Motion to Stay Adjudication of Motion to Quash and Conduct Discovery; granting 6 Motion to Quash Service; and Vacating Default Judgment entered in state court. See order for further details and deadlines. Signed by Magistrate Judge Amanda Arnold Sansone on 4/21/2021. (MLM) (Entered: 04/21/2021)
04/15/2021 29 CERTIFICATE of interested persons and corporate disclosure statement by BCP Management, LLC. (Segal, Lee) (Entered: 04/15/2021)
04/15/2021 28 NOTICE of a related action per Local Rule 1.07(c) by BCP Management, LLC. Related case(s): No (Segal, Lee) (Entered: 04/15/2021)
04/12/2021 27 RESPONSE in Opposition re 24 MOTION to Stay re 21 Response in Opposition to Motion Adjudication of Motion to Quash, Motion to Allow Subpoena Duces Tecum to CT, Compel Deposition filed by Deutsche Bank National Trust Company. (Kohn, Joseph) (Entered: 04/12/2021)
04/06/2021 26 NOTICE by Deutsche Bank National Trust Company re 18 Notice (Other) of Filing Order Denying Consolidation for Purposes of Appeal (Attachments: # 1 Exhibit)(Kohn, Joseph) (Entered: 04/06/2021)
04/06/2021 25 NOTICE of supplemental authority re 6 MOTION to Quash Service of Process MOTION to Vacate Clerk’s Default and Default Judgment by Deutsche Bank National Trust Company. (Kohn, Joseph) (Entered: 04/06/2021)
03/29/2021 24 MOTION to Stay re 21 Response in Opposition to Motion Adjudication of Motion to Quash, Motion to Allow Subpoena Duces Tecum to CT, Compel Deposition by BCP Management, LLC. (Segal, Lee) (Entered: 03/29/2021)
03/28/2021 23 NOTICE by BCP Management, LLC re 21 Response in Opposition to Motion of Reyes Affidavit Admitting Office (Attachments: # 1 Exhibit)(Segal, Lee) (Entered: 03/28/2021)
03/28/2021 22 NOTICE by BCP Management, LLC re 21 Response in Opposition to Motion of Affidavit of Lior Segal (Attachments: # 1 Exhibit)(Segal, Lee) (Entered: 03/28/2021)
03/26/2021 21 RESPONSE in Opposition re 6 MOTION to Quash Service of Process MOTION to Vacate Clerk’s Default and Default Judgment filed by BCP Management, LLC. (Segal, Lee) (Entered: 03/26/2021)
03/17/2021 20 ENDORSED ORDER granting 19 Motion for Extension of Time to File a Response to the defendant’s 6 Motion to Quash Service of Process and Motion to Vacate Clerk’s Default and Default Judgment. The plaintiff’s response is due by March 26, 2021. Signed by Magistrate Judge Amanda Arnold Sansone on 3/17/2021. (MLM) (Entered: 03/17/2021)
03/17/2021 19 First MOTION for Extension of Time to File Response/Reply as to 6 MOTION to Quash Service of Process MOTION to Vacate Clerk’s Default and Default Judgment, 17 Order directing response to motion to Defendant’s Motion to Quash Service & Incorporated Memorandum of Law by BCP Management, LLC. (Segal, Lee) (Entered: 03/17/2021)
03/17/2021 18 NOTICE by BCP Management, LLC of Filing (Attachments: # 1 Motion to Consolidate Cases)(Segal, Lee) (Entered: 03/17/2021)
03/11/2021 17 ENDORSED ORDER directing the plaintiff to respond to the defendant’s 6 Motion to Quash Service of Process and Motion to Vacate Clerk’s Default and Default Judgment. The plaintiff’s response is due by March 19, 2021. If no response is received, the defendant’s motion will be treated as unopposed. Signed by Magistrate Judge Amanda Arnold Sansone on 3/11/2021. (MLM) (Entered: 03/11/2021)
03/09/2021 16 ORDER approving Consent to Jurisdiction by US Magistrate Judge. Case reassigned to Magistrate Judge Amanda Arnold Sansone. Signed by Judge Charlene Edwards Honeywell on 3/9/2021. (BGS) (Entered: 03/09/2021)
03/09/2021 15 NOTICE of supplemental authority re 6 MOTION to Quash Service of Process MOTION to Vacate Clerk’s Default and Default Judgment (Second Notice) by Deutsche Bank National Trust Company. (Kohn, Joseph) (Entered: 03/09/2021)
03/09/2021 14 CONSENT to trial by U.S. Magistrate Judge by Deutsche Bank National Trust Company. (Kohn, Joseph) (Entered: 03/09/2021)
03/09/2021 13 CASE MANAGEMENT REPORT. (Kohn, Joseph) (Entered: 03/09/2021)
03/03/2021 12 NOTICE of a related action per Local Rule 1.07(c) by Deutsche Bank National Trust Company. Related case(s): Yes (Attachments: # 1 Exhibit)(Kohn, Joseph) (Entered: 03/03/2021)
03/01/2021 11 NOTICE informing the parties that they may consent to the jurisdiction of a United States magistrate judge by filing Form AO 85 Notice, Consent, and Reference of a Civil Action to a Magistrate Judge using the event Consent to Jurisdiction of US Magistrate Judge. (Signed by Deputy Clerk). (BGS) (Entered: 03/01/2021)
03/01/2021 10 NOTICE to Counsel of Local Rule 1.07(c), Local Rule 3.02(a)(2), and Local Rule 3.03.

-Local Rule 1.07(c) requires lead counsel to promptly file a Notice of a Related Action that identifies and describes any related action pending in the Middle District.

-Local Rule 3.02(a)(2) requires the parties in every civil proceeding, except those described in subsection (d), to file a case management report (CMR) using the uniform form at www.flmd.uscourts.gov. The CMR must be filed (1) within forty days after any defendant appears in an action originating in this court, (2) within forty days after the docketing of an action removed or transferred to this court, or (3) within seventy days after service on the United States attorney in an action against the United States, its agencies or employees. Judges may have a special CMR form for certain types of cases. These forms can be found at www.flmd.uscourts.gov under the Forms tab for each judge.

-Local Rule 3.03 requires each party to file a disclosure statement with the first appearance that identifies (1) each person that has or might have an interest in the outcome, (2) each entity with publicly traded shares or debt potentially affected by the outcome, (3) each additional entity likely to actively participate, and (4) each person arguably eligible for restitution. The disclosure statement must include this certification – I certify that, except as disclosed, I am unaware of an actual or potential conflict of interest affecting the district judge or the magistrate judge in this action, and I will immediately notify the judge in writing within fourteen days after I know of a conflict. (Signed by Deputy Clerk). (BGS) (Entered: 03/01/2021)

02/26/2021 9 NOTICE of filing of affidavit in opposition to re 7 Notice of filing supplemental authority, 6 MOTION to Quash Service of Process MOTION to Vacate Clerk’s Default and Default Judgment by BCP Management, LLC (Attachments: # 1 Affidavit of Michael Roth)(Segal, Lee) Modified text on 3/1/2021 (MCB). (Entered: 02/26/2021)
02/26/2021 8 NOTICE of filing of affidavit in opposition to re 7 Notice of filing supplemental authority, 6 MOTION to Quash Service of Process MOTION to Vacate Clerk’s Default and Default Judgment by BCP Management, LLC (Attachments: # 1 Affidavit of Michael Levey)(Segal, Lee) Modified text on 3/1/2021 (MCB). (Entered: 02/26/2021)
02/23/2021 7 NOTICE of supplemental authority re 6 MOTION to Quash Service of Process MOTION to Vacate Clerk’s Default and Default Judgment by Deutsche Bank National Trust Company. (Kohn, Joseph) (Entered: 02/23/2021)
02/22/2021 6 MOTION to Quash Service of Process , MOTION to Vacate Clerk’s Default and Default Judgment by Deutsche Bank National Trust Company. (Attachments: # 1 Exhibit 1, # 2 Exhibit 2, # 3 Exhibit 3, # 4 Exhibit 4, # 5 Exhibit 5, # 6 Exhibit 6, # 7 Exhibit 7, # 8 Exhibit 8, # 9 Exhibit 9, # 10 Exhibit 10, # 11 Exhibit 11, # 12 Exhibit 12, # 13 Exhibit 13, # 14 Exhibit 14, # 15 Exhibit 15, # 16 Exhibit 16, # 17 Exhibit 17, # 18 Exhibit 18)(Kohn, Joseph) Motions referred to Magistrate Judge Amanda Arnold Sansone. (Entered: 02/22/2021)
02/08/2021 5 CORPORATE Disclosure Statement by Deutsche Bank National Trust Company identifying Corporate Parent Deutsche Bank Holdings, Inc., Corporate Parent Deutsche Bank Trust Corporation, Corporate Parent DB USA Corporation for Deutsche Bank National Trust Company.. (Kohn, Joseph) (Entered: 02/08/2021)
02/04/2021 4 ORDER transferring case to Tampa Division. Signed by Judge Anne C. Conway on 2/4/2021. (copies mailed/emailed)(AKC) (Entered: 02/04/2021)
02/03/2021 3 INITIAL CASE ORDER – Notice of Local Rule 3.02(a)(2), which requires the parties in every civil proceeding, except those described in subsection (d), to file a case management report (CMR) using the uniform form at www.flmd.uscourts.gov. The CMR must be filed (1) within forty days after any defendant appears in an action originating in this court, (2) within forty days after the docketing of an action removed or transferred to this court, or (3) within seventy days after service on the United States attorney in an action against the United States, its agencies or employees. Counsel have 14 days from the date of this order to file their disclosure statement (if not already filed) and to notify the court of a related action (not required if there are no related actions). Signed by Judge Anne C. Conway on 2/3/2021. (copies mailed/emailed)(AKC) (Entered: 02/03/2021)
02/02/2021 2 NEW CASE ASSIGNED to Judge Anne C. Conway and Magistrate Judge Embry J. Kidd. New case number: 6:21-cv-0223-ACC-EJK. (SJB) (Entered: 02/02/2021)
02/02/2021 1 COMPLAINT and NOTICE OF REMOVAL from 18th Judicial Circuit Brevard County Florida, case number 20-CA-47023 filed in State Court on 10/19/2020. (Filing Fee $402, Receipt # 113A-17839186) filed by Deutsche Bank National Trust Company. (Attachments: # 1 Exhibit, # 2 Exhibit, # 3 Exhibit, # 4 Exhibit, # 5 Exhibit, # 6 State Court COMPLAINT, # 7 State Court Other Documents, # 8 State Court Other Documents, # 9 State Court Docket Sheet, # 10 Civil Cover Sheet)(Kohn, Joseph) Modified on 2/2/2021 to correct docket text(SJB). Modified on 2/3/2021 (MEJ). (Entered: 02/02/2021)
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Eleventh Circuit

PPP Fraud Sentencing: In Florida an NFL Player Receives 3 Years. In Texas, a Regular Joe, 9 Years.

Former NFL player Josh Bellamy $1.2m PPP Loan Fraud versus $1.6m by Texas citizen Lee Price III, receives 3x the sentence, for the same crime and practically the same financial sum.

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It doesn’t take a rocket scientist to confirm federal judges are dismissing sentencing guidelines and ordering low sentences depending on who is in front of them.

Ex-NFL player Bellamy gets 3 years for COVID relief fraud

DEC 13, 2021 | REPUBLISHED BY LIT: DEC 14, 2021

TAMPA, Fla. (AP) — Former NFL player Josh Bellamy has been sentenced to three years and one month in federal prison for fraudulently obtaining over $1.2 million in COVID-19 relief funds.

Bellamy, 32, of St. Petersburg, Florida, was sentenced Friday in Tampa federal court, according to court records. He pleaded guilty in June to conspiracy to commit wire fraud. Besides serving prison time, Bellamy must also pay restitution.

Bellamy most recently played for the New York Jets, who released him from the reserve/physically unable to play list in September 2020, just days before his arrest.

The wide receiver had been placed on the list in May of that year, ending his season before it began. He signed a two-year deal worth $5 million with New York in 2019 and played in seven games before injuring a shoulder and being placed on the season-ending injured reserve list.

According to court records, Bellamy obtained a Paycheck Protection Program loan of $1.2 million for his company, Drip Entertainment LLC, using falsified documents and false information.

Bellamy admitted to using the loan proceeds on personal items, such as jewelry and a stay at the Seminole Hard Rock Hotel and Casino.

Bellamy also sought loans on behalf of his family members and close associates.

Texas man who bought Lamborghini with $1.6 million PPP loan sentenced to 9 years in prison

NOV 30, 2021 | REPUBLISHED BY LIT: DEC 14, 2021

HOUSTON, Texas — A Houston businessman was sentenced to nine years in prison for a scheme in which he obtained and laundered more than $1.6 million in Paycheck Protection Program (PPP) loans guaranteed by the Small Business Administration (SBA) under the Coronavirus Aid, Relief and Economic Security (CARES) Act.

According to the U.S. Attorney’s office, 30-year-old Lee Price III, who pleaded guilty to wire fraud and money laundering charges, submitted fraudulent PPP applications to banks and other lenders on behalf of three entities: 713 Construction LLC, Price Enterprises Holdings LLC, and Price Logistic Services LLC.

Through the applications, Price sought over $2.6 million and obtained $1.6 million.

The applications allegedly stated each entity had numerous employees and significant payroll expenses. In addition, Price put down the name of a person who died shortly before the application was submitted.

After receiving the money, Price used the money on a Lamborghini Urus, a Ford F-350 truck, a Rolex watch, and to pay off a loan on a residential property. He also spent thousands at strip clubs and other Houston nightclubs.

Price was arrested and charged with making false statements to a financial institution, wire fraud, bank fraud and engaging in unlawful monetary transactions. He pleaded guilty in September to wire fraud and money laundering charges.

The CARES Act was enacted in March to provide emergency financial assistance for Americans due to the COVID-19 pandemic. Congress authorized more than $300 billion in additional PPP funding.

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Appellate Circuit

Judge Jill Pryor on a Panel about Judicial Recusals? That’s a Contradiction, Right There.

Judge Cooke has a conflict of interest based on her financial statements, which revealed interests in companies doing business with one of the defendants.

Published

on

In the
United States Court of Appeals
For the Eleventh Circuit

No. 20-13674
Non-Argument Calendar

JAMES BUCKMAN, MAURICE SYMONETTE,

versus
LANCASTER MORTGAGE CO.,

Plaintiffs-Appellants,

DEUTSCHE BANK NATIONAL TRUST CO.,
as Trustee under the pooling and servicing agreement series rast 2006-A8,

SECURITY AND EXCHANGE COMMISSION,

U.S. TREASURY,

Defendants-Appellees,

ONE WEST BANK, et al.,

Defendants.

OCT 7, 2021 | REPUBLISHED BY LIT: OCT 7, 2021

Appeal from the United States District Court for the Southern District of Florida
D.C. Docket No. 1:19-cv-24184-MGC

Before JILL PRYOR, BRANCH, and LUCK, Circuit Judges. PER CURIAM:

James Buckman and Maurice Symonette (“Buckman and Symonette”) appeal from the district court’s dismissal with prejudice of their second amended complaint as an impermissible shotgun pleading.

They argue that the district court erred and demonstrated bias by dismissing their case because they had filed a motion for an additional three-day extension of time and the district court provided a window for responses to the motion by the defendants, but then dismissed the case before the responses were due.1

After review, we affirm.

1 Over four months after filing their notice of appeal from the dismissal of their complaint, Buckman and Symonette filed two motions for recusal of the district court judge, arguing that she had a conflict of interest based on her financial statements, which revealed interests in companies doing business with one of the defendants. (LIF: THAT DEFENDANT WOULD BE DEUTSCHE BANK)

The district court denied the motions.

Buckman and Symonette did not file an amended or new notice of appeal following entry of that order.

Therefore, we lack jurisdiction to review the district court’s denial of the motion for recusal.

See McDougald v. Jenson, 786 F.2d 1465, 1474 (11th Cir. 1986) (holding that, although we liberally construe notices of appeal under Federal Rule of Appellate Procedure 3 to include orders not expressly designated, that allowance does not extend to an order that was not entered when the notice of appeal was filed);

see also LaChance v. Duffy’s Draft House, Inc., 146 F.3d 832, 837–38 (11th Cir. 1998) (holding that we lacked jurisdiction over a post-judgment order awarding attorney’s fees where the motion for attorney’s fees was not filed until after the notice of appeal and the plaintiff failed to file an amended notice of appeal from the order awarding fees).

I. Background

In October 2019, Buckman and Symonette filed a pro se 45-page complaint against eight defendants including numerous banks, a mortgage company, the Security and Exchange Commission, the U.S. Treasury, and other entities, raising numerous claims including:

(1) quiet title;
(2) slander of title;
(3) unjust enrichment;
(4) violations of the Real Estate Settlement Procedures Act;
(5) fraud and concealment;
(6) violation of timely assignment and lack of consideration;
and
(7) various violations of several Florida statutes.

Thereafter, in December 2019, Buckman and Symonette filed a 51-page amended complaint asserting a total of 11 causes of action.

On July 24, 2020, the district court, sua sponte, struck the amended complaint as an impermissible shotgun pleading.

The district court set forth the pleading rules in its order, and provided that the plaintiffs had until July 31, 2020 to file a second amended complaint.

The district court emphasized that, in the second amended complaint, Plaintiffs are required to make a “short and plain statement of the claim showing that the pleader is entitled to relief . . .”

Fed. R. Civ. P. 8(a).

Plaintiffs must also state each theory of liability separately “in numbered paragraphs, each limited as far as practicable to a single set of circumstances.”

Fed. R. Civ. P. 10(b).

The newly amended complaint should clearly delineate which factual allegations and cited laws are relevant to the asserted cause of action.

This includes specifying which Defendant is liable under each cause of action and which Defendant is implicated in each factual allegation.

Failure to comply with this Order may result in the dismissal of this case with prejudice or other appropriate sanctions.

On July 31, 2020, the plaintiffs filed a motion for an extension of time to file their second amended complaint. The district court granted the motion and ordered that the second amended com- plaint be filed on or before August 6, 2020.

On August 6, 2020, the plaintiffs filed a motion seeking three more days to file their second amended complaint. On the same date, after filing their extension motion, they filed their second amended complaint.

The 92-page second amended complaint added 4 new causes of action and suffered from many of the same issues as the first amended complaint.

On August 17, 2020, the district court dismissed with prejudice the second amended complaint explaining that the second amended complaint “does not cure the defects that required striking of the initial Complaint.”

This appeal followed.2

2 Following the dismissal of their complaint, Buckman and Symonette filed a motion for reconsideration in the district court, which was denied. However, they do not raise any arguments related to the denial of their motion for re- consideration in their brief. Accordingly, the district court’s resolution of the motion for reconsideration is not before us.

II. Discussion

Buckman and Symonette argue that the district court erred and demonstrated bias when it dismissed their case with prejudice while their motion for extension of time was pending.

Specifically, they argue that the district court docketed their motion for a three- day extension of time to file the second amended complaint and set “responses due by 8/20/2020,” but then dismissed the case before that date.

They also raise arguments related to the merits of their underlying claims.

The district court did not err in dismissing the case. On the day the second amended complaint was due, Buckman and Symonette filed the request for a three-day extension of time, but they then filed a second amended complaint the same day.

The filing of the second amended complaint on the day it was due mooted the motion for an extension of time and the related re- sponse period.

Once the second amended complaint was filed, there was nothing left for the district court to do except review the complaint to determine whether the plaintiffs corrected the previously identified pleading issues.

To the extent that Buckman and Symonette’s brief could be liberally construed as challenging the district court’s dismissal of the second-amended complaint as an impermissible shotgun pleading, we review the district court’s decision for abuse of discretion.

Barmapov v. Amuial, 986 F.3d 1321, 1324 (11th Cir. 2021); see also Tannenbaum v. United States, 148 F.3d 1262, 1263 (11th Cir. 1998)

(“Pro se pleadings are held to a less stringent standard than pleadings drafted by attorneys and will, therefore, be liberally construed.”).

“A shotgun pleading is a complaint that violates either Federal Rule of Civil Procedure 8(a)(2) or Rule 10(b), or both.”

Barmapov, 986 F.3d at 1324.

Rule 8 requires that the complaint set forth “a short and plain statement of the claim” demonstrating an entitlement to relief, and Rule 10 requires that a plaintiff “state [his] claims in numbered paragraphs, each limited as far as practicable to a single set of circumstances.”

Fed. R. Civ. P. 8(a)(2) and 10(b).

Rule 10 further provides that each claim be stated in separate counts “[i]f doing so would promote clarity.” Id. R. 10(b).

We have repeatedly condemned the use of shotgun pleadings.

See Barmapov, 986 F.3d at 1324; Magluta v. Samples, 256 F.3d 1282, 1284 (11th Cir. 2001).

When a plaintiff files a shotgun pleading, a district court must give him one chance to replead before dismissing his case with prejudice on shotgun pleading grounds.
Vibe Micro, Inc. v. Shabanets, 878 F.3d 1291, 1295–96 (11th Cir. 2018).

The district court should explain how the pleading violated the shotgun rule so that the plaintiff can remedy his next pleading.

Id.

Where, as here, the plaintiff is provided fair notice of the specific defects in his complaint and a meaningful chance to fix it but fails to correct the defects, the district court does not abuse its discretion by dismissing with prejudice on shotgun pleading grounds.

Jackson v. Bank of Am., N.A., 898 F.3d 1348, 1358–59 (11th Cir. 2018).

Accordingly, the district court did not abuse its discretion in dismissing the second amended complaint with prejudice because Buckman and Symonette failed to correct the pleading defects.

Id.

Consequently, we affirm.

AFFIRMED.

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