Free Motion for Order - District Court of Colorado - Colorado

Case 1:04-cv-00354-WDM-BNB

Document 186-3

Filed 04/16/2007

Page 1 of 50

EXHIBIT B SUMMARY OF BILLINGS January 1, 2007 through March 31, 2007

I. CASE BACKGROUND On March 2, 2004, John Paul Anderson, then an associate at Patten, MacPhee & Associates, Inc., was appointed as Receiver by the Honorable Judge Walker D. Miller of the United States District Court for the District of Colorado ("the Court"). The appointment of a receiver was requested by the Securities and Exchange Commission ("SEC") in the instant case captioned: SEC v. Kelsey L. Garman and the Koinonia Income Account, Koinonia Investment Club II, Koinonia 100/200 Club and Koinonia Kingdom Club ("Koinonia Defendants"). The appointment of Mr. Anderson, after the Court determined that a Receiver should be appointed, was made on the mutual consent of attorneys representing the SEC and Mr. Garman. According to a review of the documents provided to date in this case, the purported value to investors in the Koinonia Defendants summed to almost $16 million at the end of January 2004. Upon liquidation of the various investment accounts and their ultimate conversion to cash, the Receiver transferred the funds to an interestbearing account at Colorado Business Bank. The March 31, 2007 balance of cash sums to approximately $657,000, after the deduction of the Receiver's fees and expenses paid through March 31, 2007. Interest earned on the corpus of the Receivership estate totaled approximately $494,605 through the end of December 31, 2006. The interest rate as of March 31, 2007 was 4.250%. See item 38 under Scope of Activities for a discussion of the status of the Interim Distribution as of March 31, 2007. The Receiver was appointed by the Court to: · Ascertain the status of the investments held in the name of Mr. Kelsey L. Garman and/or the Koinonia Defendants and preserve, to the extent possible, the value of those investments; Conduct a full accounting of the current investors' cash deposits and withdrawals; Conduct an analysis of the trading activity and resulting investment returns within the underlying brokerage accounts that represent the assets of the Koinonia Defendants; Conduct an analysis of the purported returns of the Koinonia Defendants;

· ·

·

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SEC v. Garman, et al. Exhibit B, Summary of Billings January 1, 2007 through March 31, 2007 Page 2 · Conduct an analysis of fees earned and/or money transferred to Mr. Garman or entities/persons controlled by Mr. Garman that are not currently under the Receiver's control; and Propose to the Court a distribution plan of available funds to investors after deduction of fees and costs.

·

II. SCOPE OF ACTIVITIES This is the twelfth application for professional fees and expenses. Since our appointment, we have performed the following: 1. Converted to cash all of the investments held by the Koinonia Defendants and transferred the cash to an interest-bearing bank account of a Colorado bank; Communicated with various regulatory personnel regarding documents and related information; Communicated with Mr. Garman's attorney regarding various transactions and documents; Interviewed Mr. Garman regarding various questions regarding the Koinonia Defendants; Communicated with the IRS regarding potential tax issues pertaining to prior transactions and gains asserted by the Koinonia Defendants; Communicated with current and prior brokerage firms to ascertain the status of brokerage accounts and, when available, obtained statements of brokerage account activity; Communicated with Ms. Jan Loser, former bookkeeper of the Koinonia Defendants; Obtained and reviewed various electronic data files and paper files related to the Koinonia Defendants that contain, among other things, investment activity, investor deposits and withdrawals, investor lists, brokerage statements, partnership agreements, tax returns, accounting records and bank statements. To date, over 80,000 documents are in the possession of the Receiver;

2.

3.

4.

5.

6.

7.

8.

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SEC v. Garman, et al. Exhibit B, Summary of Billings January 1, 2007 through March 31, 2007 Page 3 9. Created a database of investor account activity derived from documents and/or electronic files received from either from the SEC, Ms. Loser or Mr. Garman's attorney. This database reflects cash deposits, cash withdrawals, gifts or interaccount transfers that pertain to the Koinonia Defendants. Statements were mailed to investors of account activity during the period that the fee application covers. In addition, there has been ongoing maintenance of this database as additional information is received;

10. Completed construction of several databases that show individual trading activity as well as aggregate trading activity within the investment accounts held in the name of Mr. Garman or the Koinonia Defendants. Ongoing maintenance is conducted on these databases based on additional information received; 11. Completed the construction of a database of bank account activity within the bank accounts held in the name of Mr. Garman or the Koinonia Defendants; 12. Conducted an interview of Mr. Kelsey Garman; 13. Prepared and submitted are report to the Court regarding the activities of the Koinonia Defendants; 14. Filed a motion to have the Koinonia Defendants substantively consolidated for purposes of determining each investor's equitable interest in the Receivership Estate; 15. Provided ongoing communication with investors regarding the status of their investments, including the most recent mailing of statements shortly after the period covered by this report; 16. Submitted a proposed distribution plan to the Court; 17. Commenced the Claims Administration process by mailing out statements to all investors, along with Claim Forms, a Bar Date Notice and the Judge's Order regarding the Claims Process; 18. Appeared before the Court seeking authority to pursue monies held in the name of Parable Investments, Ltd., which are apparently located offshore; 19. Began research and analysis into relevant tax reporting issues regarding the Koinonia Defendants;

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SEC v. Garman, et al. Exhibit B, Summary of Billings January 1, 2007 through March 31, 2007 Page 4 20. Assisted Claimants in preparing their forms and following up with Claimants to ensure that they are participating in the Claims process; 21. Conducted a detailed analysis of investors who withdrew more than they contributed to the funds of the various Koinonia Defendants (the "claw back" analysis); 22. Reviewed submitted claim forms and prepared and transmitted notification to each Claimant regarding Receiver's position on each claim; 23. Prepared and filed, with the assistance of Counsel for the Receiver, the Receiver's Report to the Court Regarding Allowance and Disallowance of Claims; 24. Responded to requests from investors regarding claim forms and procedures; 25. Continued working with Counsel and tax professionals to determine partnership tax treatment of the consolidated receivership estate; 26. Completed the 2004 Partnership Tax Return for Koinonia Investment Club II; 27. Mailed 2004 K-1 forms to individual partners of Koinonia Investment Club II 28. Stipulated to the amount to be claimed by Mrs. Joyce Garman; 29. Attended a status conference in front of the Court; 30. Filed a motion with the Court for a proposed interim distribution; 31. Maintained ongoing communication with investors regarding the status of their claim and the status of the Court's approval of our motion for interim distribution; 32. Completed the 2005 Partnership Tax Return for Koinonia Investment Club II and mailed the associated 2005 K-1s to the individual partners of Koinonia Investment Club II; 33. Attended a status conference in front of the Court on June 26, 2006; 34. Began work on estimating final expenses for the completion the Receiver's work;

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SEC v. Garman, et al. Exhibit B, Summary of Billings January 1, 2007 through March 31, 2007 Page 5 35. Pursuant to the Court's order, mailed interim distribution checks on April 21, 2006, in the aggregate amount of $8,516,635.99. 36. Addressed, through Receiver's counsel, issues related to Mr. Garman's tax deficiency notice from the Internal Revenue Services; 37. Continued to work on recover assets related to Parable investments, including contact counsel for the SEC in Washington, D.C. in order to assist in the recovery of funds located in Hong Kong; 38. As of March 31, 2007, of the $8,516,635.99 disbursed in the interim distribution, all but $80.00 had cleared the Koinonia Investment Club II partnership checking account. The Receiver has contacted the Claimant regarding this check, the Claimant is states that it was deposited and is currently researching to confirm such a deposit; 39. Investigated, through the Receiver's counsel, any issues that the IRS may have with the positions taken y the Receiver in his preparation of the 2004 partnership tax return; 40. Received and deposited $45,000 into the Receivership estate from Mr. Garman pursuant to his settlement with the SEC; Duties Performed During the Period Covered by this Twelfth Fee Application: 41. Compiled information necessary for the completion of the 2006 federal and state partnership income tax returns for Koinonia Investment Club II; 42. Conferred with the Receiver's counsel, tax counsel and tax professional regarding the tasks to be undertaken and matters to be resolved prior to winding down the Receivership, including, but not limited to: a. b. c. d. Completion of the 2007 tax return; Recoveries of monies related to Parable Investments, Ltd.; Determination as to whether the IRS has any issues related to the partnership income tax returns filed for Koinonia Investment Club II; Estimation by the Receiver and his professionals as to the final expenses related to the administration of the Receivership Estate; and, Seeking the Court's approval for the final distribution and performing the final distribution.

e.

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SEC v. Garman, et al. Exhibit B, Summary of Billings January 1, 2007 through March 31, 2007 Page 6 43. Coordinated and completed the mailing of each partner's 2006 K-1 for Koinonia Investment Club II; 44. Responded to specific questions and information requests from the Claimants; 45. Subsequent to the period covered by this twelfth fee application, recovered $15,313 from an account held in Ireland under the name Parable Investments, Ltd.; and, 46. Continue to work on recovering funds held in an account in Hong Kong also under the name Parable Investments, Ltd.

(Remainder of Page Intentionally Left Blank)

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SEC v. Garman, et al. Exhibit B, Summary of Billings January 1, 2007 through March 31, 2007 Page 7 II. SCOPE OF ACTIVITIES AND RELATED PROFESSIONAL FEES Attendance in Court Hours billed in this category relate to preparation and attendance in front of the Court.
Biller John Paul Anderson David A. Hall Ruth H. Nelson Stephanie L. Meinerz Gary M. Schwartz Leslie A. Patten Michael D. Burns Carolyn J. Pharis Rate $ $ $ $ 180.00 320.00 60.00 60.00 Current Application Previous Applications Hours Fees Hours Fees $ $ $ $ 12.1 $ 2,178.00 $ $ $ Cumulative Hours Fees 12.1 $ $ $ $ 2,178.00 -

$ $ $ $

180.00 320.00 160.00 45.00

-

$ $ $ $ $

-

12.10

$ $ $ $

-

12.10

$ $ $ $ $

2,178.00

Totals

$ 2,178.00

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SEC v. Garman, et al. Exhibit B, Summary of Billings January 1, 2007 through March 31, 2007 Page 8 Communication and/or Meeting with Counsel Hours billed in this category relate to either letters sent to or meetings with counsel for the Receiver, the SEC or Mr. Garman. The subject of these communications and meetings relate to filings to be submitted to the Court by the Receiver, the production of documents from the SEC and Mr. Garman and discussions as to the nature and scope of the work to be performed by the Receiver.
Biller John Paul Anderson David A. Hall Ruth H. Nelson Stephanie L. Meinerz Gary M. Schwartz Leslie A. Patten Michael D. Burns Carolyn J. Pharis Rate $ $ $ $ 180.00 320.00 60.00 60.00 Current Application Previous Applications Hours Fees Hours Fees 4.3 $ $ $ $ 774.00 67.1 $ 12,078.00 $ $ $ Cumulative Hours Fees 71.4 $ 12,852.00 $ $ $ -

$ $ $ $

180.00 320.00 160.00 45.00

4.30

$ $ $ $ $

774.00

0.3 67.40

$ $ $ $

13.50

0.3 71.70

$ $ $ $

13.50

Totals

$ 12,091.50

$ 12,865.50

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SEC v. Garman, et al. Exhibit B, Summary of Billings January 1, 2007 through March 31, 2007 Page 9 Communication and or Meeting with Investor(s) Hours billed in this category relate to preparation for a meeting with investors that occurred on April 27, 2004. Also included are time related to the preparation of mailings to investors, telephone conversations with investors and various faceto-face meetings with investors throughout the period covered by this and the previous fee applications.
Biller John Paul Anderson David A. Hall Ruth H. Nelson Stephanie L. Meinerz Gary M. Schwartz Leslie A. Patten Michael D. Burns Carolyn J. Pharis Rate $ $ $ $ 180.00 320.00 60.00 60.00 Current Application Previous Applications Hours Fees Hours Fees 11.4 $ 2,052.00 $ $ $ 45.0 $ 8,100.00 $ $ $ Cumulative Hours Fees 56.4 $ 10,152.00 $ $ $ -

$ $ $ $

180.00 320.00 160.00 45.00

11.40

$ $ $ $

1.8 5.3 52.10

$ $ $ $

288.00 238.50

1.8 5.3 63.50

$ $ $ $

288.00 238.50

Totals

$ 2,052.00

$ 8,626.50

$ 10,678.50

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SEC v. Garman, et al. Exhibit B, Summary of Billings January 1, 2007 through March 31, 2007 Page 10 Communications - Miscellaneous Hours billed in this category relate to communications to parties other than counsel and investors, such as meetings and correspondence with the Internal Revenue Service regarding potential current and historical tax issues related to the apparent overstatement of investment returns upon which investors prepared their tax returns.
Biller John Paul Anderson David A. Hall Ruth H. Nelson Stephanie L. Meinerz Gary M. Schwartz Leslie A. Patten Michael D. Burns Carolyn J. Pharis Rate $ $ $ $ 180.00 320.00 60.00 60.00 Current Application Previous Applications Hours Fees Hours Fees 0.5 $ $ $ $ 90.00 7.3 $ 1,314.00 $ $ $ Cumulative Hours Fees 7.8 $ $ $ $ 1,404.00 -

$ $ $ $

180.00 320.00 160.00 45.00

0.50

$ $ $ $ $

90.00

0.5 7.80

$ $ $ $

80.00 -

0.5 8.30

$ $ $ $ $

80.00 1,484.00

Totals

$ 1,394.00

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SEC v. Garman, et al. Exhibit B, Summary of Billings January 1, 2007 through March 31, 2007 Page 11 Database Development, Verification and Analysis ­ Bank Account Activity Hours billed in this category relate to preparation, verification and ongoing analysis of an electronic database containing information on payments and deposits made to various bank accounts of either Mr. Garman individually or one of the Koinonia Defendants. This database currently contains information on over 5,000 transactions.

Biller John Paul Anderson David A. Hall Ruth H. Nelson Stephanie L. Meinerz Gary M. Schwartz Leslie A. Patten Michael D. Burns Carolyn J. Pharis

Rate $ $ $ $ 180.00 320.00 60.00 60.00

Current Application Previous Applications Hours Fees Hours Fees $ $ $ $ 30.3 $ 5,454.00 $ $ $ -

Cumulative Hours Fees 30.3 $ $ $ $ 5,454.00 -

$ $ $ $

180.00 320.00 160.00 45.00

-

$ $ $ $ $

-

20.9 51.20

$ $ $ $

940.50

20.9 51.20

$ $ $ $ $

940.50 6,394.50

Totals

$ 6,394.50

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SEC v. Garman, et al. Exhibit B, Summary of Billings January 1, 2007 through March 31, 2007 Page 12 Database Development, Verification and Analysis ­ Brokerage Account Activity Hours billed in this category relate to preparation, verification and ongoing analysis and maintenance of an electronic database containing information regarding investments, deposits, withdrawals and account transfers of various brokerage accounts held either in Mr. Garman's name for the benefit of the Koinonia investors or in the name of a Koinonia Defendant. The Receiver anticipates that this database will be used as the basis for calculating the gains and/or losses that occurred in the various investment accounts. This database currently contains information on over 10,000 transactions.
Biller John Paul Anderson David A. Hall Ruth H. Nelson Stephanie L. Meinerz Gary M. Schwartz Leslie A. Patten Michael D. Burns Carolyn J. Pharis Rate $ $ $ $ 180.00 320.00 60.00 60.00 Current Application Previous Applications Hours Fees Hours Fees $ $ $ $ 130.5 $ 23,490.00 $ $ $ Cumulative Hours Fees 130.5 $ 23,490.00 $ $ $ -

$ $ $ $

180.00 320.00 160.00 45.00

-

$ $ $ $ $

-

1.2 1.2 17.6 150.50

$ $ $ $

384.00 192.00 792.00

1.2 1.2 17.6 150.50

$ $ $ $

384.00 192.00 792.00

Totals

$ 24,858.00

$ 24,858.00

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Page 13 of 50

SEC v. Garman, et al. Exhibit B, Summary of Billings January 1, 2007 through March 31, 2007 Page 13 Database Development, Verification and Analysis ­ Investor Account Activity Hours billed in this category relate to preparation, verification and ongoing analysis and maintenance of an electronic database containing an accounting of cash deposits, withdrawals as well as inter-account transfers made by active Koinonia investors to, from or between the Koinonia Defendants. Ultimately, the Receiver anticipates that this database will serve as the basis for calculating each investor's pro-rata share of the monies available for distribution. This database currently contains information on over 13,000 transactions.
Biller John Paul Anderson David A. Hall Ruth H. Nelson Stephanie L. Meinerz Gary M. Schwartz Leslie A. Patten Michael D. Burns Carolyn J. Pharis Rate $ $ $ $ 180.00 320.00 60.00 60.00 Current Application Previous Applications Hours Fees Hours Fees $ $ $ $ 258.6 $ 46,548.00 $ $ $ Cumulative Hours Fees 258.6 $ 46,548.00 $ $ $ -

$ $ $ $

180.00 320.00 160.00 45.00

-

$ $ $ $ $

-

1.0 55.0 314.60

$ $

320.00

1.0 55.0 314.60

$ $ $ $

320.00 8,800.00 -

$ 8,800.00 $ -

Totals

$ 55,668.00

$ 55,668.00

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SEC v. Garman, et al. Exhibit B, Summary of Billings January 1, 2007 through March 31, 2007 Page 14 Document Review ­ Brokerage Account Related Hours billed in this category relate to the review and analysis of brokerage account statements held in the name of Mr. Garman for the benefit of the Koinonia investors or in the name of a Koinonia Defendant. The Receiver reviewed these documents to gain an understanding of the nature of the investments being made, and which brokerage accounts that either Mr. Garman or the Koinonia Defendants held. The brokerage account statements reviewed include accounts that were active upon the appointment of the Receiver or have been active in the past, but were closed prior to the appointment of the Receiver.
Biller John Paul Anderson David A. Hall Ruth H. Nelson Stephanie L. Meinerz Gary M. Schwartz Leslie A. Patten Michael D. Burns Carolyn J. Pharis Rate $ $ $ $ 180.00 320.00 60.00 60.00 Current Application Previous Applications Hours Fees Hours Fees $ $ $ $ 24.2 $ 4,356.00 $ $ $ Cumulative Hours Fees 24.2 $ $ $ $ 4,356.00 -

$ $ $ $

180.00 320.00 160.00 45.00

-

$ $ $ $ $

-

24.20

$ $ $ $

-

24.20

$ $ $ $ $

4,356.00

Totals

$ 4,356.00

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SEC v. Garman, et al. Exhibit B, Summary of Billings January 1, 2007 through March 31, 2007 Page 15 Document Review ­ Investor Related Hours billed in this category relate to the review and analysis of monthly files containing transaction summaries of investor withdrawals, deposits and interaccount transfers for the various Koinonia Defendants. The Receiver also reviewed files related to other funds managed by Mr. Garman or his associates that were closed prior to the appointment of the Receiver. It should be noted that the review of the documents in this category that were in the possession of the Receiver by September 30, 2004 has been completed. For the quarter ended December 31, 2005, the Receiver billed fees for cataloging documents sent offsite for storage.
Biller John Paul Anderson David A. Hall Ruth H. Nelson Stephanie L. Meinerz Gary M. Schwartz Leslie A. Patten Michael D. Burns Carolyn J. Pharis Rate $ $ $ $ 180.00 320.00 60.00 60.00 Current Application Previous Applications Hours Fees Hours Fees $ $ $ $ 50.1 $ 9,018.00 $ $ $ Cumulative Hours Fees 50.1 $ $ $ $ 9,018.00 -

$ $ $ $

180.00 320.00 160.00 45.00

-

$ $ $ $ $

-

3.8 53.90

$ $ $ $

171.00

3.8 53.90

$ $ $ $ $

171.00 9,189.00

Totals

$ 9,189.00

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SEC v. Garman, et al. Exhibit B, Summary of Billings January 1, 2007 through March 31, 2007 Page 16 Investigation Hours billed in this category relate to the review and analysis of legal pleadings, court cases, correspondence and enclosures received from the Receiver's counsel, Mr. Garman's counsel or the SEC, as well as the recovery of assets. Also included are document reviews that the Receiver was not able to classify elsewhere in his report. As noted previously, the Receiver has received and reviewed over 80,000 documents since his appointment. While some of these documents the Receiver has deemed not relevant to the tasks that he was appointed to accomplish, lack of organization of the photocopies received prevented the Receiver from easily identifying categories of documents. Thus, the Receiver believes that it was reasonable and necessary to review all of the documents that he has in his possession. It should be noted that this document review has been substantially completed. Also included in this category is time spent on recovering assets related to the Parable Investments, Ltd. entity.
Biller John Paul Anderson David A. Hall Ruth H. Nelson Stephanie L. Meinerz Gary M. Schwartz Leslie A. Patten Michael D. Burns Carolyn J. Pharis Rate $ $ $ $ 180.00 320.00 60.00 60.00 Current Application Previous Applications Hours Fees Hours Fees 4.9 $ $ $ $ 882.00 143.0 $ 25,740.00 $ $ $ Cumulative Hours Fees 147.9 $ 26,622.00 $ $ $ -

$ $ $ $

180.00 320.00 160.00 45.00

4.90

$ $ $ $ $

882.00

2.0 9.0 154.00

$ $

360.00 -

2.0 9.0 158.90

$ $ $ $

360.00 1,440.00 -

$ 1,440.00 $ -

Totals

$ 27,540.00

$ 28,422.00

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SEC v. Garman, et al. Exhibit B, Summary of Billings January 1, 2007 through March 31, 2007 Page 17 Report Preparation Hours billed in this category relate to the preparation, review and revision of the Receiver's report of the activities of the Koinonia Defendants filed with the Court on October 12, 2004. Included in this task is the preparation and assimilation of schedules and source documents to be attached as exhibits to the October 12, 2004 report. This category also includes time spent accumulating information and, ultimately, the preparation of a final report to the Court.
Biller John Paul Anderson David A. Hall Ruth H. Nelson Stephanie L. Meinerz Gary M. Schwartz Leslie A. Patten Michael D. Burns Carolyn J. Pharis Rate $ $ $ $ 180.00 320.00 60.00 60.00 Current Application Previous Applications Hours Fees Hours Fees 10.0 $ 1,800.00 $ $ $ 95.0 $ 17,100.00 $ $ $ Cumulative Hours Fees 105.0 $ 18,900.00 $ $ $ -

$ $ $ $

180.00 320.00 160.00 45.00

10.00

$ $ $ $

-

8.0 3.2 14.8 121.00

$

-

8.0 3.2 14.8 131.00

$ $ $ $

2,560.00 512.00 666.00

$ 2,560.00 $ $ 512.00 666.00

Totals

$ 1,800.00

$ 20,838.00

$ 22,638.00

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SEC v. Garman, et al. Exhibit B, Summary of Billings January 1, 2007 through March 31, 2007 Page 18 Claims Administration Hours billed in this category relate to the preparation and dissemination of Statements, Claim Forms and other relevant legal notices to investors with respect to the Claims Administration process. Fees associated with the interim distribution are included within this category. Also included in this category are phone calls to or from investors related to the completion of the Claim Form or other questions that they may have regarding their account activity, as well as any research or analysis required pursuant to such conversations. The Receiver will also be billing time spent organizing the distribution of funds to the Claimants to this category.
Biller John Paul Anderson David A. Hall Ruth H. Nelson Stephanie L. Meinerz Gary M. Schwartz Leslie A. Patten Michael D. Burns Carolyn J. Pharis Rate $ $ $ $ 180.00 320.00 60.00 60.00 Current Application Previous Applications Hours Fees Hours Fees $ $ $ $ 201.3 $ 36,234.00 $ $ $ Cumulative Hours Fees 201.3 $ $ $ $ 36,234.00 -

$ $ $ $

180.00 320.00 160.00 45.00

-

$ $ $ $ $

-

1.5 0.2 63.3 266.30

$ $ $

270.00 64.00 -

1.5 0.2 63.3 266.30

$ $ $ $ $

270.00 64.00 2,848.50 39,416.50

$ 2,848.50 $ 39,416.50

Totals

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SEC v. Garman, et al. Exhibit B, Summary of Billings January 1, 2007 through March 31, 2007 Page 19 Receivership Estate Tax Research and Preparation Hours billed in this category relate to the ultimate preparation of a partnership tax return(s) for Koinonia Investment Club II, which is the remaining entity after the Court's approval for Substantive Consolidation. Included in this category are time spent collecting necessary date for the preparation of the tax return(s) and meetings with tax counsel and a Certified Public Accountant retained by the Receiver to assist in the preparation of the tax return. Fees reported in this current fee application pertain to the preparation and mailing of the 2004, 2005, and 2006 partnership tax returns.
Biller John Paul Anderson David A. Hall Ruth H. Nelson Stephanie L. Meinerz Gary M. Schwartz Leslie A. Patten Michael D. Burns Carolyn J. Pharis Rate $ $ $ $ 180.00 320.00 60.00 60.00 Current Application Previous Applications Hours Fees Hours Fees 33.3 4.0 $ 5,994.00 $ $ $ 240.00 121.5 2.5 $ 21,870.00 $ $ $ 800.00 Cumulative Hours Fees 154.8 2.5 4.0 $ 27,864.00 $ $ $ 800.00 240.00 -

$ $ $ $

180.00 320.00 160.00 45.00

37.30

$ $ $ $

-

18.5 142.50

$ $ $ $

832.50

18.5 179.80

$ $ $ $

832.50

Totals

$ 6,234.00

$ 23,502.50

$ 29,736.50

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SEC v. Garman, et al. Exhibit B, Summary of Billings January 1, 2007 through March 31, 2007 Page 20 III. SUMMARY OF PROFESSIONAL FEES The names and hourly rates of all professionals and para-professionals that billed time on this matter are contained at Exhibit A. Attachment 1 contains a summary of professional fees in chronological order by month, and includes detail by biller and by category for period January 1, 2007 through March 31, 2007. Attachment 3 contains copies of Navigant Consulting, Inc.'s invoices submitted for time and expenses incurred during the period summarized in this fee application. Attachment 4 presents billing statements for Patten, MacPhee & Associates, Inc. during this same period. IV. SUMMARY OF EXPENSES Attachment 2 contains a detailed listing of expenses by category. Attachments 5 and 6 contain billing statements for professional work done on behalf of the Receiver that were received during the period January 1, 2007 through March 31, 2007. Description of legal and accounting services billed during the period January 1, 2007 through March 31, 2007 For a description of the legal and accounting services billed during the period covered by this fee application, see paragraph eight of the eleventh fee application. V. CONCLUSION

The Receiver believes that the requested fees and expenses are reasonable and necessary to complete the task required and discharge his duties in this matter. The Receiver has charged reasonable rates based upon the customary compensation charged by comparably skilled professionals charged with similar fiduciary duties. Further, the Receiver believes the requested fees and expenses are reasonable and necessary considering the complexity of the financial and accounting issues involved. The Receiver has reviewed the billing statements to ensure that they are reasonable and necessary.

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Case 1:04-cv-00354-WDM-BNB
SEC v. Garman, et al. Billed Fees Fee Application for Period January 1, 2007 through March 31, 2007 Date 01/03/07 01/04/07 01/05/07 01/10/07 01/11/07 01/12/07 03/01/07 Biller JPA JPA JPA JPA JPA JPA JPA Category Communication and/or Meeting with Investor(s) Communication and/or Meeting with Counsel Communication and/or Meeting with Counsel Communication and/or Meeting with Counsel Communication and/or Meeting with Investor(s) Communication and/or Meeting with Investor(s) Communication and/or Meeting with Investor(s)

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Attachment 1

Hours 0.20 0.30 0.20 0.40 0.20 0.30 0.5

$

03/07/07 03/08/07 03/09/07 03/09/07 03/09/07 03/12/07

JPA JPA JPA JPA JPA JPA

Report Preparation Report Preparation Communication and/or Meeting with Investor(s) Receivership Estate Tax Research and Preparation Communications - Miscellaneous Communication and/or Meeting with Counsel

2.0 1.5 0.5 0.2 0.1 0.3

03/12/07 03/12/07

JPA JPA

Communication and/or Meeting with Counsel Investigation

0.2 0.5

03/12/07 03/12/07 03/12/07 03/13/07 03/14/07 03/15/07 03/19/07 03/21/07 03/21/07 03/21/07 03/22/07

JPA JPA JPA JPA JPA JPA JPA JPA JPA JPA JPA

Communication and/or Meeting with Counsel Communication and/or Meeting with Investor(s) Communication and/or Meeting with Investor(s) Receivership Estate Tax Research and Preparation Receivership Estate Tax Research and Preparation Communication and/or Meeting with Investor(s) Communication and/or Meeting with Investor(s) Communication and/or Meeting with Investor(s) Investigation Investigation Investigation

1.5 0.2 0.2 1.0 0.4 0.3 0.5 0.2 0.3 0.2 0.4

Amount Description 36.00 Telephone conference with investor. 54.00 Telephone conference with L. Gustafson re: status of consultations with the IRS regarding the 2004 Koinonia Tax return. 36.00 Telephone confernece with C. Jobin re: status of K. Garman consent draft. 72.00 Telephone conference with C. Jobin re: consent from K. Garman 36.00 Telephone conference with investor. 54.00 Telephone conference with investor. 90.00 Update databases with address changes for investors; compose and mail correspondence to investor whose mail was returned with an expired forwarding address. 360.00 Identify and estimate final costs for the Court regarding the winding down of the Receivership and dissolution of the partnership. 270.00 Summarize expenses since appointment as Receiver. 90.00 Update investors address in databases; prepare e-mail notification to B. Greenstone for the 2006 partnership tax return. 36.00 Brief telephone call to B. Greenstone re: status of tax return. 18.00 Review Judge Miller's Administrative Order. 54.00 Telephone conference with C. Jobin re: Judge Miller's order and discussion of outstanding issues required to complete duties as Receiver. 36.00 Brief phone conference with L. Gustafson re: status of consultations with IRS. 90.00 Telephone call to Ms. Niamh Mulholland at World Emerging Market Umbrella Fund in Dublin, Ireland re: status of research into potential investment; subsequent call to Mr. Peter O'Sullivan in London re: same. Forward via email K. Garman's Voluntary Consents regarding Parable Investments and the Koinonia Defendants. 270.00 Review tasks to be completed and prepare e-mail memorandum to counsel re: same. 36.00 Telephone call from investor; resend February 23, 2007 notification letter. 36.00 Telephone call from investor re: status of K-1. 180.00 Review selected pages from completed tax return; trace selected allocation percentages back to Court-approved allocations. 72.00 Telephone conference with B. Greenstone re: completed tax return. 54.00 Telephone conference with investor; brief call to B. Greenstone's office re: tax return information. 90.00 Received various telephone calls with investors; discussion of status of K-1s and completion of Receivership. 36.00 Respond to investor's email inquiry. 54.00 Review e-mail for Elsie Leung at JF Asset Management; forward same to C. Jobin 36.00 Respond to E. Leung's comments regarding the Voluntary Consents. 72.00 Phone call with Peter O'Sullivan in London re: repatriation of Ireland money; prepare and send e-mail to Cathy Kinsella in Dublin re: same.

Case 1:04-cv-00354-WDM-BNB
SEC v. Garman, et al. Billed Fees Fee Application for Period January 1, 2007 through March 31, 2007 Date 03/22/07 03/22/07 03/22/07 03/22/07 03/22/07 03/22/07 03/23/07 03/23/07 03/26/07 03/26/07 03/26/07 03/26/07 03/27/07 Biller JPA JPA JPA JPA JPA JPA RHN JPA JPA JPA JPA JPA JPA Category Investigation Communication and/or Meeting with Investor(s) Receivership Estate Tax Research and Preparation Receivership Estate Tax Research and Preparation Receivership Estate Tax Research and Preparation Receivership Estate Tax Research and Preparation Receivership Estate Tax Research and Preparation Receivership Estate Tax Research and Preparation Receivership Estate Tax Research and Preparation Receivership Estate Tax Research and Preparation Investigation Investigation Investigation

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Page 23 of 50
Attachment 1

Hours 0.3 0.2 1.0 0.5 4.5 1.1 4.0 2.0 0.8 0.5 0.5 0.2 2.0

Amount Description 54.00 Compose additional e-mail to Oisin O'Connor at Cathy Kinsella's office re: document request. 36.00 Telephone call from investor re: status of 2006 tax return. 180.00 Meeting with L. Gustafson at his office to sign and pick up my copies of the 2006 tax return. 90.00 Coordinate mailing of 2006 K-1s. 810.00 Coordinate mailing of K-1s; work on DR-108 payments to the State of Colorado. 198.00 Review tax return; prepare new cover letter for partners' K-1s. 240.00 Prepare mailing of 2006 K-1s to investors. 360.00 Ascertain whether there were duplicate K-1s printed by the printer; pull selected letters to determine if the appropriate K-1 was placed. 144.00 Various phone calls from investors regarding 2006 Schedule K-1. 90.00 Identify final K-1s to be mailed. 90.00 Review documents received from Mellon Financial in Dublin, Ireland; complete in order to repatriate funds to the Receiver's account. 36.00 Review email from Hong Kong and forward to C. Jobin for her review. 360.00 Phone conversation and e-mails with O. O'Connor in Ireland re: repatriation of funds to U.S.; prepare letter and complete documents to effectuate transfer. 90.00 Revise voluntary consents pursuant to request from Hong Kong; forward to Hong Kong for review prior to execution. 72.00 Telephone Larry Jumper to obtain Allan Jumper's death certificate and proof that L. Jumper is personal representative. Forward tax return information to L. Jumper based on information received. 36.00 Telephone conversation with investor re: status of matter and question regarding K-1. 54.00 Telephone call from investor regarding K-1 information. 36.00 Telephone conference with C. Jobin re: status of Parable transfers and requests from Hong Kong. 72.00 Update databases for address changes. 90.00 Research informational request from investor and email responsive documents to same. 126.00 Telephone conference with L. Gustafson and B. Greenstone. 360.00 Begin collecting and summarizing information for 2006 Tax Return. 360.00 Gather information for 2006 tax return. 90.00 Telephone call with investor re: 2004 and 2005 K-1s. Research and e mail same to investor 54.00 Telephone call with investor re: receivership status. 90.00 Begin preparation of letter to investors re: current status of receivership. 720.00 Continue work on collecting and summarizing information for the 2006 tax return. 36.00 Draft letter to JF Asset management in Hong Kong. 180.00 Reconcile Receivership bank accounts. 144.00 Draft/proof letter to investors and forward to C. Jobin for review. 36.00 Update change of address notice to the Court and forward to C. Jobin for filing.

03/28/07 03/28/07

JPA JPA

Investigation Communication and/or Meeting with Investor(s)

0.5 0.4

03/28/07 03/28/07 03/28/07 03/28/07 03/29/07 03/30/07 02/13/07 02/14/07 02/15/07 02/15/07 02/15/07 02/15/07 02/15/07 02/16/07 02/16/07 02/16/07

JPA JPA JPA JPA JPA JPA JPA JPA JPA JPA JPA JPA JPA JPA JPA JPA

Communication and/or Meeting with Investor(s) Communication and/or Meeting with Investor(s) Communication and/or Meeting with Counsel Communication and/or Meeting with Investor(s) Communication and/or Meeting with Investor(s) Communication and/or Meeting with Counsel Receivership Estate Tax Research and Preparation Receivership Estate Tax Research and Preparation Communication and/or Meeting with Investor(s) Communication and/or Meeting with Investor(s) Communication and/or Meeting with Investor(s) Receivership Estate Tax Research and Preparation Communications - Miscellaneous Receivership Estate Tax Research and Preparation Communication and/or Meeting with Investor(s) Communications - Miscellaneous

0.2 0.3 0.2 0.4 0.5 0.7 2.0 2.0 0.5 0.3 0.5 4.0 0.2 1.0 0.8 0.2

Case 1:04-cv-00354-WDM-BNB
SEC v. Garman, et al. Billed Fees Fee Application for Period January 1, 2007 through March 31, 2007 Date 02/16/07 02/16/07 02/16/07 02/20/07 02/21/07 02/21/07 02/22/07 02/22/07 02/22/07 02/22/07 02/23/07 02/26/07 02/26/07 02/26/07 02/28/07 Biller JPA JPA JPA JPA JPA JPA JPA JPA JPA JPA JPA JPA JPA JPA JPA Category Communication and/or Meeting with Investor(s) Communication and/or Meeting with Counsel Receivership Estate Tax Research and Preparation Receivership Estate Tax Research and Preparation Communication and/or Meeting with Investor(s) Report Preparation Report Preparation Communication and/or Meeting with Investor(s) Communication and/or Meeting with Investor(s) Report Preparation Communication and/or Meeting with Counsel Communication and/or Meeting with Investor(s) Communication and/or Meeting with Investor(s) Communication and/or Meeting with Investor(s) Receivership Estate Tax Research and Preparation

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Attachment 1

Hours 0.5 0.2 5.5 6.0 2.5 3.5 1.0 0.2 0.3 2.0 0.3 0.3 0.2 0.2

Amount Description 90.00 Responded to inquiries from investors via e-mail and voicemail. 36.00 Brief phone call to L. Gustafson. 990.00 Continue work on tax return information; check for changes in address. 1,080.00 Complete gathering of information for 2006 partnership tax return; reconcile changes in bank account balances. 450.00 Prepare mailing of update letter to investors. 630.00 Begin analysis of fees charges and expenses incurred in preparation of final report to the Court. 180.00 Review fee applications for final accounting of Receivership. 36.00 Telephone call with investor. 54.00 Telephone call with investor. 360.00 Review filed quarterly fee applications in preparation of final report to Court. 54.00 Telephone call with L. Gustafson and B. Greenstone re: 2006 tax return. 54.00 Telephone call with investor, re: status of tax return and receivership. 36.00 Telephone call with investor re: status of tax return. 36.00 Telephone call with investor re: status of tax return and change of address notification. Update address database to reflect address changes; prepare e-mail to B. Greenstone re: additional address changes and change of name. 144.00 11,832.00

0.8 68.40 Biller JPA DAH RHN SLM 64.40 4.00 68.40

$

$

$

11,592.00 240.00 11,832.00

Case 1:04-cv-00354-WDM-BNB
SEC v. Garman, et al. Billed Fees Fee Application for Period January 1, 2007 through March 31, 2007 Date Biller Category

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Attachment 1

Hours

Amount

Description

Category Attendence in Court Communication and/or Meeting with Counsel Communication and/or Meeting with Investor(s) Communications - Miscellaneous Database Development, Verification and Analysis - Bank Account Activity Database Development, Verification and Analysis - Brokerage Account Activity Database Development, Verification and Analysis - Investor Account Activity Document Review - Brokerage Account Related Document Review - Investor Related Investigation Report Preparation Receivership Estate Tax Research and Preparation Claims Administration

4.30 11.40 0.50 4.90 10.00 37.30 68.40

$

$

774.00 2,052.00 90.00 882.00 1,800.00 6,234.00 11,832.00

Communication and/or Meeting with Counsel JPA DAH RHN SLM

4.30 4.30

$

774.00 774.00

Communication and/or Meeting with Investor(s) JPA DAH RHN SLM

11.40 11.40

$

2,052.00 2,052.00

Communications - Miscellaneous JPA DAH RHN SLM

0.50 0.50

$

90.00 90.00

Investigation JPA DAH RHN SLM

4.90 4.90

$

882.00 882.00

Case 1:04-cv-00354-WDM-BNB
SEC v. Garman, et al. Billed Fees Fee Application for Period January 1, 2007 through March 31, 2007 Date Biller Report Preparation JPA DAH RHN SLM Category

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Attachment 1

Hours

Amount

Description

10.00 10.00

$

1,800.00 1,800.00

Receivership Estate Tax Research and Preparation JPA DAH RHN SLM

33.30 4.00 37.30 68.40

$ $

5,994.00 240.00 6,234.00 11,832.00

Grand Total

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SEC v. Garman, et al. Billed Expenses Fee Application for Period January 1, 2007 through March 31, 2007 Date 01/31/07 01/31/07 01/31/07 01/31/07 01/31/07 01/31/07 01/31/07 01/31/07 02/15/07 02/16/07 02/28/07 03/09/07 03/16/07 03/22/07 03/22/07 03/28/07 03/28/07 03/29/07 03/31/07 Category Expenses - Communication and/or Meeting with Investors Expenses - Communication and/or Meeting with Investors Expenses - Miscellaneous (Telephone, Facsimile, etc.) Expenses - Communication and/or Meeting with Investors Expenses - Communication and/or Meeting with Investors Expenses - Miscellaneous (Telephone, Facsimile, etc.) Expenses - Photocopies Expenses - Miscellaneous (Telephone, Facsimile, etc.) Expenses - Communication and/or Meeting with Investors Expenses - Miscellaneous (Telephone, Facsimile, etc.) Expenses - Miscellaneous (Telephone, Facsimile, etc.) Expenses - Communication and/or Meeting with Investors Expenses - Communication and/or Meeting with Investors Expenses - Communication and/or Meeting with Investors Expenses - Communication and/or Meeting with Investors Expenses - Professionals for the Receiver Expenses - Professionals for the Receiver Expenses - Professionals for the Receiver Expenses - Miscellaneous (Telephone, Facsimile, etc.) Amount 32.41 25.00 7.51 211.84 24.99 22.60 41.25 4.00 24.99 20.88 22.60 50.00 24.99 70.00 25.00 1,623.38 1,200.00 6,500.00 22.60 $ 9,954.04 489.22 9,323.38 100.19 41.25 9,954.04

Attachment 2

$

Description Envelopes for mailing to investors. ViaWest, Inc. Invoice No. 972575 - Service from 1/1/07 to 2/1/07 Telephone Expense. Postage Expense. Stamps.com Fees. Document Storage charges for 57 boxes being held at Iron Mountain. Photocopies. Facsimile Expense. Stamps.com Fees. FedEx package to Hong Kong Document Storage charges for 57 boxes being held at Iron Mountain. ViaWest, Inc. Invoice Nos. 983314 and 994067 - Service from 2/1/07 to 4/1/07 Stamps.com Fees. Postage for tax return mailing. Additional postage required for tax return mailing The Jobin Law Firm, Invoice #3858 Greenstone, Lick & Associates, Invoice #8422 Greenstone, Lick & Associates, Invoice #8589 Document Storage charges for 57 boxes being held at Iron Mountain.

Expenses - Communication and/or Meeting with Investors Expenses - Professionals for the Receiver Expenses - Miscellaneous (Telephone, Facsimile, etc.) Expenses - Photocopies

$

$

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