Free Status Report - District Court of Arizona - Arizona

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Guttilla Murphy Anderson, P.C.

Guttilla Murphy Anderson, P.C.
Ariz. Firm No. 00133300

Patrick M. Murphy (Ariz. No. 002964)
4150 West Northern Avenue Phoenix, Arizona 85051 Email: [email protected] Phone: (623) 937-2795 Fax: (623) 937-6897

Attorneys for the Receiver

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF ARIZONA Securities and Exchange Commission, Plaintiff, vs. U.S. Reservation Bank & Trust; Higher Investments Technologies, Inc.; GlobalLink Capital Markets, Ltd.; Edward J. Driving Hawk, Sr.; Leo R. Driving Hawk, Sr.; John M. Adams; Edmund J. Smedley; Kenneth S. Harrison; William J. Herisko; and Thomas T. Emerton, III; Defendants, and Oyate Development, Inc.; Oyate Enterprises, LLP; Oyate Trust; River Walk Development, LLC; HPHC, Inc.; Ringthunder Racing Stables, Inc.; James R. Driving Hawk; and Orpha Jane Johnston; Defendants Solely for Purposes of Equitable Relief. ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) )

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4150 West Northern Ave. Phoenix, Arizona 85051 (623) 937-2795

Cause No. CIV 02-0581 PHX EHC

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RECEIVER'S STATUS REPORT ON REMAINING CLAIMS RE: PETITION NO. 106

Lawrence J. Warfield, as the court appointed Receiver, reports to the Court as follows: 1. On March 6, 2008, the Receiver filed with the Court his Petition No. 106,

Petition for Order Approving Second Interim Distribution (Doc. #719), which requested
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approval of a pro-rata second interim distribution on all approved claims in the total amount of $5,000,000.00. In his petition the Receiver informed the court that there were two claims that had not yet been finally adjudicated by the Court and that the Receiver was investigating those claims. 2. On March 12, 2008, the Court entered its Order Re: Petition No. 106 (Doc.

#720), which among other things, approved the second interim distribution proposed by the Receiver and directed the Receiver to file with the Court a status report on the two unresolved claims within 30 days of the Court's order. This is the Receiver's report. Horst Dopp 3. One of the USRBT depositors was Interinvest, AG ("Interinvest"), a

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registered company in Switzerland. On September 28, 2000, $1,000,000 was transferred to USRBT from an account of Interinvest.1 4. Initially, the Receiver received a single claim to the investment received

from Interinvest. This claim was filed by an individual named Heinrich Bertschinger stating that he was the "sole director and signatory" of Interinvest. After the Receiver raised questions concerning whether Mr. Bertschinger was in fact the owner of Interinvest as required by the Claims Order2, the Receiver received an additional seven

This gross investment amount was reduced by two transfers from USRBT for the benefit of Interinvest. On September 26, 2001, USRBT wired $47,136.06 to an account held at Barclay's Bank, London, in the name of Dickerson, Ltd., fbo Interinvest, AG; and 20 on November 1, 2001, USRBT made a second wire transfer of $47,136.00 to Dickerson 21 Ltd. 2 On December 15, 2003, this Court entered it Order Establishing Procedures for the 22 Adjudication of Claims Re: Petition No. 23 ("Claims Order") [Doc. #301], which established procedures for notifying potential claimants of the right to file proofs of claim 23 with the Court's Receiver, the requirements that claimants must meet to be approved, and the procedures for the adjudication of those claims. Case 2:02-cv-00581-EHC Document 723 2 Filed 04/10/2008 Page 2 of 9 19

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claims, filed by the claimants' California attorney, Gina Hattenbach. Since Interinvest did not keep contemporaneous records of the funds it received from its investors and how those funds were to be applied, the Receiver was required to reconstruct the investment activities of Interinvest. Through this process it became evident that Mr. Bertschinger was not the owner of any of the funds transferred to USRBT, and accordingly his claim was recommended for denial. Two of the other five claimants had produced evidence to support ownership to part of the transferred funds and those two claims were recommended for approval for their pro-rata portion of the entire net funds retained by USRBT. The other five claimants lacked evidence to substantiate the ownership and/or tracing requirements. By August 31, 2006, additional evidence was produced by certain claimants in their objections to the Receiver's report, and the Receiver was able to increase the pro-rata approval for the two previously approved claimants based on this new evidence, and also approve two additional claimants in this group. 5. The final recommendations of the Receiver resulted in all but two claims of

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the Interinvest Investors being approved by the Court. The Interinvest Investors then filed with the Court a broad objection to the Receiver's recommendations concerning the claims filed by the Interinvest Investors. On September 21, 2007, the Receiver filed his Response to Objections to Petition No. 98 Filed by Interinvest Investors (Doc. #697). On October 17, 2007, the Court subsequently issued its Order Re: Petition No. 98 (Doc. #705), which among other things, denied the objections of the Interinvest Investors who had filed claims. 6. In the Receiver's response to the objections the Receiver explained that one

of the Interinvest Investors had provided with his documents information showing that an
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individual by the name of Horst Dopp was the likely owner of certain funds that had been transferred to Interinvest and then to USRBT. One of the Interinvest Investors that filed a claim is Mr. Oehri. Oehri, however, was unable to prove that he owned the funds for which he claimed ownership. Those funds had been placed with Interinvest by a company named Inter-Immobilia Anstalt. A declaration of Dr. Batliner provided to the Receiver states in two places that Horst Dopp is the owner of Inter-Immobilia Anstalt (which changed its name in 2001) and that Mr. Oehri is nothing more than a board member. The declaration also describes a change in the name of the company but is unclear whether it was simply a name change or was the result of a merger or change in ownership. Clearly Oehri is not and never was the owner of Inter-Immobilia Anstalt or the funds it placed with Interinvest. Response to Objections to Petition No. 98 Filed by Interinvest Investors (Doc. #697), pp. 5-6 7. On September 14, 2007, more than one year after the original response to

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10 11 the objections filed by the Interinvest Investors, the claimants' attorney, Ms. Hattenbach, 12 sent the Receiver a Proof of Claim form for Horst Dopp in an attempt to lay claim to the 13 unresolved funds which originated from Inter-Immobilia Anstalt. No supporting 14 documentation was included with this Claim. Although the Batliner declaration states 15 that Dopp is the owner of a company which supposedly changed its name from Inter16 Immobilia Anstalt, the Batliner declaration does not attest to Dopp's ownership at the 17 time of the investment in Interinvest or his ownership of the funds that were invested. 18 8. 19 denied. The Court, however, did not address the Dopp claim in its Order Re: Petition 20 No. 98 (Doc. #705), entered on October 17, 2007. Thus, the Dopp claim remains 21 unresolved. 22 23
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Accordingly, the Receiver recommended that the claim of Horst Dopp be

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9.

On April 8, 2008, apparently in anticipation of the Receiver filing the status

report requested by the Court, counsel for the Interinvest Investors filed with the Receiver a package of information in support of the Dopp claim. Although the simple response to this claim might be to deny it as untimely, the Receiver has tried to recognize the special circumstances present in the late filed claims and where justified, has recommended the acceptance and approval of some late filed claims. Unfortunately, the Receiver needs additional time to review and evaluate the material just now provided in support of the Dopp claim. For this reason, unless directed otherwise by the Court, the Receiver intends to file a final report and recommendation on the Dopp claim within 60 days. Liquidator of Secure Finance and Investment Services 10. Another one of the USRBT depositors was Second Wind Management,

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LLC ("Second Wind"). Like most of the other depositors, Second Wind was simply an aggregator that was running its own investment scheme. One of Second Wind's investors, was Secure Finance and Investment Services ("Secure"), an Australian company that was in turn operating its own investment scheme. 11. The Receiver's efforts to find the actual owners of the funds invested in

Secure, which had been invested in Second Wind, and then in USRBT, proved unsuccessful. However, the operator of Secure, Phillip Crane, filed an individual claim. The Receiver recommended denial of that claim explaining as follows: Phillip Crane is not the true owner of these funds. As discussed in my 4th Interim Report, SFIS was a vehicle used by Crane and was investigated by the Australian Securities and Investment Commission (ASIC) for possible securities fraud. At the time of my 4th report, I had not yet received a reply from the ASIC. I have since received correspondence from them stating
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that during their investigation they did not receive cooperation from the investors and "in many cases, the investors actively conspired with Mr. Philip Crane to frustrate the investigation" therefore, they will not re-open the case to assist the return of these funds to the rightful owners. Therefore, I recommend that Mr. Crane's claim be denied due to lack of evidence to support the ownership of funds and the disqualification under paragraph 5.2 of the Claims Order because he facilitated the fraud perpetrated on his investors. Receiver's Ninth Interim Claims Report Regarding Second Wind Investors (Doc#583), Ex. 1, p. 17-18. 12. The Court agreed with the Receiver and its Order Re: Petition No. 86 (Doc.

#649), the Court, among other things, denied the claim filed by Phillip Crane. That order is now final. 13. Recently, the Receiver received a claim from the liquidator of Secure

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appointed by an Australian court. The Receiver is investigating this claim and has requested supporting information from the liquidator. The difficulty faced by the liquidator is that he has few records and apparently little or no funds to pay for an investigation to locate the investors. 14. As with the Dopp claim, the Receiver intends to file a final

recommendation as to the claim of the Secure liquidator within 60 days, unless directed otherwise by the Court. Respectfully submitted this 10th day of April, 2008. GUTTILLA & MURPHY, PC

s/Patrick M. Murphy Patrick M. Murphy Attorneys for the Receiver

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PROOF OF SERVICE This is to certify that on this 10th day of April, 2008, I electronically transmitted the foregoing document to the Clerk's Office using the CM/ECF System for filing and transmittal of a Notice of Electronic Filing to the CM/ECF registrants on the attached Master Service List; and that the persons on the attached Master Service List who are not registered participants of the CM/ECF System and the following named person have been served with a copy of the foregoing document by first class mail this date. Mark Conlan Liquidator of Secure Finance and Investment Services 8 St Georges Terrace Perth WA 6000 GPO Box R1253 Perth WA 6844 Australia s/Patrick M. Murphy Patrick M. Murphy
0776-001(73956)

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MASTER SERVICE LIST
SEC v. U.S. Reservation Bank & Trust, et al. United States District Court for the District of Arizona Phoenix CIV 02-0581 PHX EHC
(Rev. March 27, 2008 )

Lawrence J. Warfield 14555 N. Scottsdale Road, #340 Scottsdale, AZ 85254 Receiver Patrick M. Murphy Guttilla Murphy Anderson, PC 4150 West Northern Avenue Phoenix, Arizona 85051 Registered CM/ECF: [email protected] Counsel for Receiver Timothy McCole Securities & Exchange Commission 801 Cherry Street, Suite 1900 Fort Worth, Texas 76102 Counsel for the Plaintiff Leo Driving Hawk, Sr. 4575 East Campbell Court Higley, Arizona 85236 Defendant James R. Driving Hawk 1782 East Wildhorse Place Chandler, Arizona 85249 Relief Defendant

Orpha Jane Johnston 4906 Overlook Drive Harrison, Ohio 45030 Relief Defendant Edmund J. Smedley 4906 Overlook Drive Harrison, Ohio 45030 Defendant Ron Brewer 127 Fred Road Lake Charles, Louisiana 70615 Attorney for Y2K Millenium, LLC. Edward Driving Hawk, Sr., and Oyate Enterprises, LLP Ringthunder Racing Stables, Inc. Oyate Trust River Walk Development, LLC U.S. Reservation Bank & Trust % Edward Driving Hawk, Sr. 1155 East Locust Drive Chandler, Arizona 85286 Relief Defendants Oyate Development, Inc. % Leo R. Driving Hawk, Sr. 4575 East Campbell Court Higley, Arizona 85236 Relief Defendant

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Ronald J. Herisko P.O. Box 2830 Palm Springs, California 92263 Attorney for Defendants Global-Link, William J. Herisko and Thomas T. Emerton Rex Reese Attorney At Law 1645 International Drive, Suite 9 Mclean, Virginia 22102 Registered CM/ECF: [email protected] Attorney for Defendants Higher Investments Technologies, Inc. and John M. Adams and Relief Defendant HPHC, Inc. Joseph Lee Matalon 450 Seventh Avenue, Suite 1409 New York, New York 10123 Attorney for Ann Palmer Charles J. Crozier P.O. Box 15322 Austin, Texas 78761-5322 Attorney for Defendant Kenneth S. Harrison Douglas C. Erickson Maynard Cronin Erickson Curran & Sparks, P.L.C. 1800 Great American Tower 3200 North Central Avenue Phoenix, Arizona 85012 Registered CM/ECF: [email protected] Attorneys for the Estate of Amanda Beck Elden Sorenson P.O. Box 265 Cheney, Washington 99004 Claimant

Gina M. Hattenbach, Esq. HATTENBACH LAW GROUP 2029 Century Park East, Ste 900 Los Angeles, CA 90067
0776-001 (12351)

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