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Joseph N. Casas (SBN 225800) Tamara M. Craft (SBN 234419) CASAS LAW GROUP, P.C. 2323 Broadway, Suite 202 San Diego, CA 92102 Phone: (619) 692-3146 Facsimile: (619) 692-3196 Email: [email protected] Attorneys For Defendant Matthew La Madrid UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF CALIFORNIA

SECURITIES AND EXCHANGE COMMISSION, Plaintiff,

CASE NO. 08-CV-0764 BEN (NLS) DEFENDANT MATTHEW LA MADRID'S MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION TO STAY CIVIL PROCEEDINGS PENDING RESOLUTION OF CRIMINAL ACTION Date: August 11, 2008 Time: 10:30 a.m. Courtroom: 3 Judge: Hon. Roger T. Benitez

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v. PLUS MONEY, INC. AND MATTHEW LA MADRID. Defendants, THE PREMIUM RETURN FUND LIMITED-LIABILITY LIMITED PARTNERSHIP; THE PREMIUM RETURN FUND II LIMITED-LIABILITY LIMITED PARTNERSHIP; THE PREMIUM RETURN FUND III LIMITEDLIABILITY LIMITED PARTNERSHIP; RETURN FUND, LLC; RETURN FUND II, LLLC; RETURN FUND III, LLC; RETURN FUND IV, LLC; RETURN FUND V, LLC; RETURN FUND VI, LLC; PALLADIUM HOLDING COMPANY; and DONALD LOPEZ, Relief Defendants.

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Table of Contents
INTRODUCTION ............................................................................................................. 4 PROCEDURAL HISTORY ............................................................................................... 6 ARGUMENT .................................................................................................................... 7 A. The Keating Six-Factor Test Is Used To Assess Whether A Motion To Stay Civil Proceedings Pending The Outcome Of Parallel Criminal Proceedings Shows That A Stay Is Appropriate. ............................................................ 7 1. Unindicted Defendants Are Entitled To A Keating Analysis And Eligible For A Stay Of Civil Trials Pending Resolution Of Criminal Proceedings. ................................................................................... 7 An Assessment of the Keating Six-Factor Test Supports the Issuance of a Stay. .......................................................................... 9 Parallel Civil and Criminal Investigations Will Unfairly Prejudice Mr. La Madrid's Ability To Defend Himself. ............................................ 9 Mr. La Madrid's Due Process Rights Require A Stay Of The SEC Action. ........................................................................................... 11 Expeditious Proceedings in the SEC Action Are Prejudicial To Mr. La Madrid And Plaintiff's Interests Do Not Overcome Defendant's Constitutional Rights...................................................................... 12 A Stay Will Optimize The Use of Judicial Resources..................... 13 The Interests of Non-Parties And The Public Are Better Served By Staying The SEC Action. ............................................................... 14

2. a. b. c.

d. e.

CONCLUSION .................................................... ERROR! BOOKMARK NOT DEFINED.

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TABLE OF AUTHORITIES Cases Federal Sav. & Loan Ins. Corp. v. Molinaro, 889 F.2d 899, 902 (9th Cir. 1989) .................................................................................................................... 6, 8 Keating v. Office of Thrift Supervision, 45 F.3d 322, 324-325 (9th Cir. 1994)........ 4, 7, 9 Lockyer v. Mirant Corp., 398 F.3d 1098, 1109 (9th Cir. 2005) ....................................... 8 Matter of Seper, 705 F.2d 1499, 1501 (9th Cir. 1983) ................................................... 7 SEC v. Dresser Indus., 628 F.2d 1368, 1375 (D.C. Cir. 1980) .................................. 7, 9 Walsh Securities, Inc. v. Cristo Property Management Ltd., 7 F.Supp.2d 523, 527 ............................................................................................................. 9, 14 Other Authorities The Federalist No. 78 .................................................................................................. 15 Treatises Baxter v. Palmigiano, 425 U.S. 308, 318 (1976).......................................................... 11 Chronicle Pub. Co. v. Nat'l Broadcasting Co., 294 F.2d 744, 747-748 (9th Cir. 1960) ............................................................................................................... 13 Crawford & Sons, Ltd. v. Besser, 298 F.Supp.2d 317 (E.D.N.Y. 2004) ................... 9, 14 Milton Pollack, Parallel Civil and Criminal Proceedings, 129 F.R.D. 201, 203 (1989) ................................................................................................................ 9 SEC v. Healthsouth, 261 F.Supp.2d 1298 (N.D. Ala. 2003) .................................. 11, 12 SEC v. Mutuals.com, Inc., 2004 WL 1629929, *4 (N.D. Tex. 2004) ...................... 13, 15 United States v. Certain Real Property, 55 F.3d 78, 84 (2nd Cir. 1995) ...................... 11

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Defendant Matthew La Madrid hereby moves this Court to stay these civil proceedings until the resolution of a parallel criminal case. This motion is made on the grounds that a stay of these proceedings is required to protect Mr. La Madrid's Fifth Amendment rights and that a stay is in the interests of judicial economy and of the public. I. INTRODUCTION Mr. La Madrid faces the daunting task of defending himself against concurrent criminal charges and civil claims regarding the same transactions. Mr. La Madrid is currently defending charges filed by ten (10) individual investors (hereinafter "Heisey Action"), these charges filed by the Securities and Exchange Commission (hereinafter "SEC") in federal court (hereinafter "SEC Action"), and an ongoing investigation by Assistant U.S. Attorney Steven E. Stone of the United States Attorney's Office for the Southern District of California (hereinafter "AUSA"). (See Declaration of Joseph N. Casas in Support of Defendant's Motion to Stay all Claims ("Dec. of JNC" ¶ 2; see also Declaration of Matthew La Madrid In Support of Defendant's Motion to Stay All Claims ("Dec. of MLM") ¶ 3.) Because of the ongoing AUSA investigation and imminent threat of criminal prosecution, Matthew La Madrid is necessarily hindered in defending both the SEC Action and the Heisey Action by any disclosures arising out of his civil defense that may be self-incriminating. Mr. La Madrid's constitutional rights to due process and against self-incrimination are threatened by his need to defend simultaneous claims for millions of dollars in the SEC Action and the Heisey Action on the one hand, and the looming criminal investigation being conducted by the AUSA on the other. These dual civil actions will result in substantial prejudice to Mr. La Madrid's defense in the criminal action and outweigh the public's interest in proceeding with civil claims. See Keating v. Office of Thrift Supervision, 45 F.3d 322, 324-325 (9th Cir. 1994). This conflict originated when ten (10) investors filed a civil lawsuit on April 10, 2008 against Mr. La Madrid which included charges of unauthorized sales of securities, misrepresentation and breach of contract in connection with their investment activities.
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(See Exhibit A of Notice of Lodgment filed concurrently herewith). The SEC and the AUSA were conducting concurrent investigations on or about April 2008. On April 17, 2008, the FBI raided Mr. La Madrid's home, seizing computers and business records and continues to pursue their criminal investigation. See Decl. of MLM ¶ 5; see also Decl. of JNC ¶ 4. On April 28, 2008, the SEC filed charges in federal court for violations of securities laws. See Complaint filed April 28, 2008 (hereinafter "Complaint"). The SEC Action, the Heisey Action, and the AUSA investigation all arise out of and allege the same common nucleus of operative facts by Mr. La Madrid that ultimately led to the alleged dissipation of all investors investment accounts. Indeed, the charges brought by the SEC and the Heisey plaintiffs reflect the alleged criminal nature of the charges and investigation by using loaded descriptions of defendants' business activities and by alleging a knowing intent to defraud investors. See Complaint; see Exhibit A of Notice of Lodgment. After gathering evidence, the SEC filed its own complaint, alleging virtually identical facts to those alleged in the Heisey Action, and violations of federal securities laws. Specifically, the SEC reiterates the Heisey plaintiffs' claims that Mr. La Madrid knowingly misrepresented the status of the Return Funds, including the distribution of false investment records. See Complaint, ¶¶ 22-32. Matthew La Madrid now seeks to protect his right to avoid jeopardizing his criminal defense due to mandatory disclosure arising out of his defendse of both the SEC Action and the Heisey Action. In the event the SEC Action proceeds to discovery and trial, prior to resolution of the AUSA investigation and statute of limitations, Matthew La Madrid will necessarily face the harrowing dilemma of either foregoing the opportunity to testify in his own defense in the SEC Action in order to preserve his criminal defense, and risk a judgment against him; or to speak out in his defense in the SEC Action and thus make public crucial evidence that the AUSA will parlay into criminal charges and convictions. The weight of authority in the Ninth Circuit holds that defendants facing concurrent civil and criminal charges on the same facts are entitled to a stay and continuance of trial in the civil case until the resolution of the criminal charges when the defendant's Fifth
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Amendment rights are implicated. Federal Sav. & Loan Ins. Corp. v. Molinaro, 889 F.2d 899, 902 (9th Cir. 1989). This applies equally when criminal charges are filed or merely threatened, under the theory that a defendant's Fifth Amendment rights stand paramount to the civil plaintiff's right to a speedy trial. Id. Matthew La Madrid is entitled to a stay of the SEC Action to avoid endangering his defenses in the civil and criminal cases he now faces. The criteria listed in Keating support his right to first defend the investigation brought by the AUSA until they are resolved, before turning his attention to the SEC Action and the Heisey Action. Any prospective court hearings and procedural due dates in the SEC Action should be vacated until Mr. La Madrid no longer faces the threat of criminal charges and the prospect of self-incrimination by defending the SEC Action, where the claims are virtually identical to the criminal charges that threaten his liberty. II. PROCEDURAL HISTORY On April 3, 2008, ten (10) individual plaintiffs filed an action against Mr. La Madrid, among other defendants, alleging ten (10) causes of action including sale of unregistered securities. See Exhibit A of Notice of Lodgment. On April 28, 2008, the SEC files a Complaint against Mr. La Madrid, among other defendants, alleging violations of federal securities laws. On April 28, 2008, the SEC moved ex parte for a temporary restraining order, which was granted. On May 16, 2008, the SEC moved for a preliminary injunction which was granted. This order included the appointment of a permanent receiver. On July 2, 2008, the Heisey Action was stayed because of Mr. La Madrid's exposure in the related AUSA criminal investigation and prosecution. See Decl. of MLM ¶ 3. A status conference is scheduled for January 23, 2009. Id. /// /// ///
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III. ARGUMENT A. The Keating Six-Factor Test Is Used To Assess Whether A Motion To Stay Civil Proceedings Pending The Outcome Of Parallel Criminal Proceedings Shows That A Stay Is Appropriate. The Ninth Circuit has identified six factors that a district court should assess in determining whether to stay civil proceedings in the face of parallel criminal proceedings: (1) The burden which any particular aspect of the proceedings may impose on defendants; (2) The extent to which the defendant's Fifth Amendment rights are implicated; (3) The interest of the plaintiffs in proceeding expeditiously with this litigation or any particular aspect of it, and the potential prejudice to plaintiffs of a delay; (4) The convenience of the court in the management of its cases and the efficient use of judicial resources; (5) The interests of persons not parties to the civil litigation; and (6) The interest of the public in the pending civil and criminal litigation. Keating, 45 F.3d at 324325; Molinaro, 889 F.2d at 902-903. Here, a stay is necessary to balance the respective interests of Mr. La Madrid and the SEC, both to prevent Mr. La Madrid from being unfairly penalized and deprived of a fair opportunity to defend this case, and also to preserve and protect his Fifth Amendment right against self-incrimination. While the SEC may prefer to proceed with this action, a stay will not unfairly prejudice their prosecution of this case after the resolution of the AUSA's criminal investigation. 1. Unindicted Defendants Are Entitled To A Keating Analysis And Eligible For A Stay Of Civil Trials Pending Resolution Of Criminal Proceedings. The Fifth Amendment privilege against self-incrimination can be invoked by the mere possibility that testimony would create a link to incriminating evidence. Matter of Seper, 705 F.2d 1499, 1501 (9th Cir. 1983). The Ninth Circuit has acknowledged that a stay of civil proceedings may be proper where "[n]o indictment has been returned[, and] no Fifth Amendment privilege is threatened." Federal Sav. And Loan Ins. Corp. v. Molinaro, 889 F.2d 899, 903 (9th Cir. 1989) (quoting SEC v. Dresser Indus., 628 F.2d 1368, 1375 (D.C. Cir. 1980)). While a defendant is not constitutionally entitled to a stay
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of proceedings when facing parallel civil and criminal trials, courts have discretion to issue a stay in light of defendant's Fifth Amendment interests, danger of prejudice, and to promote judicial economy. Lockyer v. Mirant Corp., 398 F.3d 1098, 1109 (9th Cir. 2005). A defendant still retains a Fifth Amendment interest in staying civil proceedings even if he has waived his privilege by giving deposition testimony. In Molinaro, the Ninth Circuit upheld the district court's denial of a stay of civil proceedings to a solo defendant who had not been indicted, but had already given a partial deposition. 889 F.2d at 903. The Court applied the six factors later incorporated into the Keating test, finding that "any burden on Molinaro's fifth amendment privilege was negligible." Id. While Dresser, Molinaro, and Keating clearly articulate that a stay of proceedings is not a constitutional right, they all undertake affirmative evaluations of the defendants' Fifth Amendment rights to a stay, regardless of the status of the criminal proceedings. There is no authority for the proposition that courts should treat indicted and unindicted defendants differently in considering motions to stay when they face parallel proceedings. While unindicted defendants may have a weaker case for a stay of civil proceedings, they are still entitled to the Keating test weighing the interests of all parties against the defendant's Fifth Amendment rights. See Molinaro, 889 F.2d at 903. Matthew La Madrid has been cooperating with the AUSA in its investigation and has been informed that his indictment is imminent. See Decl. of JNC, ¶ 7. Meanwhile, the SEC Action has been progressing and threatens to interfere with his ability to defend himself in any criminal proceedings. To evaluate how Mr. La Madrid's Fifth Amendment rights are implicated, and whether a stay is appropriate, this Court must conduct the Keating six-factor test. Mr. La Madrid's status as an unindicted defendant does not affect his entitlement to this examination of the different interests affected by his parallel legal proceedings. /// ///
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2. An Assessment of the Keating Six-Factor Test Supports the Issuance of a Stay. The Ninth Circuit developed the six-factor test in order to protect the Fifth Amendment rights of defendants, while preserving the litigation interests of plaintiffs. See Keating, 45 F.3d at 324. In serving the interests of justice, the Court must account for the interests of all stakeholders in the litigation before exercising the discretion to grant a stay. Id. (quoting SEC v. Dresser Indus., 628 F.2d 1368, 1375 (D.C. Cir. 1980)). Therefore, a full balancing of these interests is required to determine whether a stay of proceedings is appropriate to protect a defendant's due process rights. As demonstrated below, the balance of interests supports a stay of all claims against Mr. La Madrid in the SEC Action. a. Parallel Civil and Criminal Investigations Will Unfairly Prejudice Mr. La Madrid's Ability To Defend Himself. When balancing competing interests, Courts must consider "the extent to which the defendant's fifth amendment rights are implicated." Keating, 45 F.3d at 324. If civil litigation involves the same subject as a parallel criminal investigation, the risk to a potential target is severe and the corresponding importance of the individual's fundamental right against self-incrimination is at its greatest. Thus, [t]he similarity of the issues has been termed `the most important issue at the threshold' in determining whether or not to grant a stay." Walsh Securities, Inc. v. Cristo Property Management Ltd., 7 F.Supp.2d 523, 527 quoting Milton Pollack, Parallel Civil and Criminal Proceedings, 129 F.R.D. 201, 203 (1989). Consequently, "[a] stay of civil proceedings is most likely to be granted where the civil and criminal actions involved the same subject matter." Crawford & Sons, Ltd. v. Besser, 298 F.Supp.2d 317 (E.D.N.Y. 2004). Further, a stay of a parallel civil suit is appropriate where a criminal investigation has not yet culminated with an indictment or charges, but the defendant's case will be hampered by the possibility of self-incrimination through participation in interrogatories and depositions. Walsh Securities, Inc., 7 F.Supp.2d at 525. The case law has recognized that the Court must determine the likelihood of prejudice to a defendant and
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grant or deny a stay of proceedings accordingly. In Walsh Securities, Inc., the defendants were engaged in a real estate investment scheme, in which they fraudulently applied for mortgages and would then redistribute ownership of the mortgaged property. Id. at 526. After the plaintiff mortgage company discovered this and filed suit, the U.S. Attorney's office began investigating whether the transactions amounted to criminal activities. Id. The District Court granted defendants' motion to stay civil proceedings, pointing to Government searches of the defendants' property and the similarity of the criminal and civil claims, by determining that defendants would be burdened by "a significant risk of self-incrimination" by their participation in depositions and interrogatories. Id. at 527. Here, there is no dispute that the allegations in the SEC Action arise from a common nucleus of operative facts that are the subject of the parallel Heisey Action and AUSA investigation. At the core of all three proceedings is Matthew La Madrid's investment activities and actions related to the investors. The evidence in the SEC Action would invariably prove the criminal elements potentially at issue. See Decl. of JNC, ¶ 8. The SEC Action alleges claims for violations of securities laws for Matthew La Madrid's investment activities, specifically attacking Matthew La Madrid's management of the Premium Return Funds in his capacity as an Investment Advisor under the Investment Advisers Act of 1940. See Complaint. The AUSA raided Mr. La Madrid's home in search of information related to his investment activities and the disposition of all of the investors' money, which he managed for the Premium Return Funds. See Decl. of JNC, ¶ 4. The threshold determination regarding the similarity of issues clearly weighs in favor of a stay. The SEC and the AUSA are all interested in the same information, arising out of the same activities and transactions, and alleging the same conduct. Thus, the civil litigation involves the same subject as the parallel criminal investigation, thus raising Mr. La Madrid's risk of self-incrimination to its most severe potential, and his corresponding right to be protected against self-incrimination to its greatest urgency.
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Simply stated, it would cause "substantial prejudice" to Mr. La Madrid to allow the SEC Action to proceed and thereby allow prosecutors to collect evidence for a criminal indictment by monitoring the civil case. Because Mr. La Madrid's Fifth Amendment rights are implicated by the SEC's focus on allegedly criminal conduct that is already the subject of an active and ongoing AUSA investigation, justice demands the SEC Action should be stayed. b. Mr. La Madrid's Due Process Rights Require A Stay Of The SEC Action. Mr. La Madrid, who has not yet given testimony in this case, has a realistic threat of incrimination in light of the fact that the FBI has seized business documents that will be the subject of questioning in the SEC Action, and in the AUSA investigation. Case law has recognized that defendants in this situation face a dilemma: either they must waive their Fifth Amendment right against self-incrimination to provide evidence in their defense in the civil case, thus putting criminal prosecutors on notice of their defenses, or they must assert this right and remain silent, thereby opening themselves the adverse evidentiary reference permissible in cases when the Fifth Amendment is invoked in a civil proceeding. Baxter v. Palmigiano, 425 U.S. 308, 318 (1976). In SEC v. Healthsouth, 261 F.Supp.2d 1298 (N.D. Ala. 2003), Healthsouth's former CEO, Richard Scrushy, facing civil charges from the government during a criminal investigation, received the benefit of a stay of the civil charges. The court observed his "precarious position of either waiving his Fifth Amendment rights and defending himself in the matter before this court, or asserting the privilege and probably losing this proceeding" and applied the principle that the exercise of the Fifth Amendment "should not be made unnecessarily costly." Healthsouth, 261 F.Supp.2d at 1316 (quoting United States v. Certain Real Property, 55 F.3d 78, 84 (2nd Cir. 1995)). Matthew La Madrid is entitled to relief from his "precarious position" of having to defend the SEC Action, the AUSA investigation, and the Heisey Action concurrently. Healthsouth, 261 F.Supp.2d at 1316. However, any meaningful defense he could raise in the SEC Action would be based on significant, potentially incriminating, disclosures
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that the AUSA would have access to in conducting its investigation. This raises the unsavory possibility that Mr. La Madrid's best defenses will be preemptively revealed to opposing litigants, thus diminishing his power to defend himself in any criminal proceeding. c. Expeditious Proceedings in the SEC Action Are Prejudicial To Mr. La Madrid And Plaintiff's Interests Do Not Overcome Defendant's Constitutional Rights. The SEC will not suffer any significant prejudice from the issuance of a stay in this case pending the resolution of the criminal proceedings by the AUSA, particularly considering that the events which allegedly give rise to this action are relatively recent, beginning in 2004. (Complaint, ¶ 5.) A stay will not cause prejudice to the SEC through loss of evidence, witnesses and recoverable assets because they are currently in the possession of the FBI, or are being monitored and tracked by the AUSA in its criminal investigation. See Decl. of JNC, ¶ 9. In addition, this Court has ordered a permanent injunction and appointed a receiver thereby further ensuring the protection of any spoliation of evidence. Under the circumstances of the present case, where there are parallel criminal proceedings and investigations underway, the risk of loss of evidence, and thus the risk of prejudice to the SEC, are minimal. The SEC's ability to investigate facts is not prejudiced. It can still investigate the facts without formal discovery by interviewing witnesses, reviewing documents, hiring experts, and perform any other type of investigation except question the defendants themselves. This certainly does not pose irreparable harm or prejudice to the SEC to warrant compromising Mr. La Madrid's Fifth Amendment rights. Indeed, the SEC actually has an important advantage because it can benefit from the investigations currently being conducted by the AUSA. At the conclusion of any trial or criminal proceeding, the SEC will have access to all materials that become public as part of the criminal cases, including briefs, trial testimony, and exhibits. It is difficult to argue that evidence will be lost when federal prosecutors are diligently investigating and prosecuting criminal cases.
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In light of these circumstances, the SEC cannot identify any actual prejudice or demonstrate that it will lose evidence if the SEC Action is stayed. In contrast with cases where a defendant maintains control over evidence and assets, the SEC faces a minimal risk that Mr. La Madrid will frustrate efforts to locate them. Beyond the minimal risk that evidence will be lost by the passage of time, the risk that Mr. La Madrid's assets, representing the SEC's potential damages, might be dissipated is similarly low. In the course of the SEC Action and the FBI raid of Mr. La Madrid's home, all of his personal accounts were frozen, and all of the Return Funds' assets were put into receivership pursuant to a permanent injunction. Mr. La Madrid has not attempted to secrete his assets since April 1, 2008, when the Heisey Action was filed and his legal problems began. See Decl. of JNC, ¶ 7. There is no evidence that there is any real risk in this case. The prejudice to the SEC's case imposed by a stay in this case will be minimal and will not outweigh defendant's interest in preserving his Fifth Amendment rights and ability to effectively defend himself. d. A Stay Will Optimize The Use of Judicial Resources. A stay would postpone action in this case until after a resolution of the criminal investigation. This will serve the interests of the court by avoiding duplication of effort and potential conflicts from the multiple related cases. See Chronicle Pub. Co. v. Nat'l Broadcasting Co., 294 F.2d 744, 747-748 (9th Cir. 1960) (ruling that the risk of duplication of efforts weighed in favor of staying civil litigation pending outcome of criminal case). Courts have previously held that stays are appropriate where the same events are at issue and similar relief is sought in several cases. See SEC v. Mutuals.com, Inc., 2004 WL 1629929, *4 (N.D. Tex. 2004) ("adjudication of the criminal trial will sharpen the issues and highlight the strengths and weaknesses of the parties' arguments, thus increasing the changes of settlement or dismissal of the case"). If the SEC Action is allowed to progress simultaneously with the AUSA Investigation, the supervising courts will be inundated with motions and proceedings that could be avoided. Obviously, having one case around the same complicated facts will
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be more time and resource-efficient than having trials for different groups of plaintiffs at different times. Furthermore, it is likely that many preliminary issues relevant in the SEC Action will be resolved by the criminal investigation and give Matthew La Madrid a better understanding of his chances of prevailing in the civil suits, and the attractiveness of settling them, thus making early use of judicial resources in preparing for civil trial potentially wasteful and non-determinative of the outcome. Granting a stay of the SEC Action is appropriate because it will serve, not burden, the efficient use of judicial resources. e. The Interests of Non-Parties And The Public Are Better Served By Staying The SEC Action. Under the Keating multi-factor test, the interests of non-parties and the public also weigh in favor of continuing the civil trials. The SEC seeks remedies for violations of securities laws in an alleged investment scheme that is now defunct. Criminal investigations and trials, in contrast, tend to expose dangerous schemes to the public in a sensational way, serving as a warning to those who would be targets of the criminal defendants. Indeed, the public interest is served by the continuance of trial because "a stay in this case would benefit the public by allowing the Government to conduct a complete, unimpeded investigation into potential criminal activity." Walsh Securities, Inc., 7 F.Supp.2d at 529; see also Crawford & Sons v. Besser, 298 F.Supp.2d 317, 319320 (E.D.N.Y. 2004) ("the public's interest is served by preserving the integrity of the criminal case"). The interest of the public in courts providing prompt resolution of civil suits does not override the benefits of allowing a criminal investigation to proceed without the distraction of civil trials. In weighing a motion to stay a civil case, the court must consider the public's "interest in ensuring the criminal discovery process is not subverted." Mutuals, Inc., at 4. Since a stay will ensure that Mr. La Madrid cannot evade the strictures of the criminal discovery process, this factor also weighs in favor of a stay.
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