Robert Stinson, Jr., et al.
On June 29, 2010, the SEC obtained an order granting a temporary restraining order, asset freeze and other emergency relief against Robert Stinson, Jr. and several entities he controlled. According to the SEC complaint, Stinson and his co-defendants perpetrated an offering fraud and Ponzi scheme in which at least $16 million was raised from more than 140 investors. See https://www.sec.gov/litigation/complaints/2010/comp21584.pdf. The Court also froze the assets of five named relief defendants - Susan L. Stinson, Christine A. Stinson, Michael G. Stinson, Laura Marable and First Commonwealth Service Company.
On September 13, 2010, upon the SEC's motion, the Court established a Receivership Estate and appointed Kamian Schwartzman as Receiver.
By opinion entered on June 20, 2011, and amended order and permanent injunction entered on June 22, 2011, the Court granted the SEC's motion for partial summary judgment, finding that the Defendants violated Sections 5(a), 5(c), and 17(a) of the Securities Act, and Section 10(b) of the Exchange Act, Rule 10b-5. On July 1, 2013, the Court entered a revised final judgment against all defendants and relief defendants, ordering the Defendants to pay disgorgement of 14,051,246, and prejudgment interest of $472,726, for a total obligation of $14,523,972.
The Receiver does not expect any further significant collections and has indicated to the Court his intent to wind down the Receivership Estate. By fee petition filed on October 31, 2014, the Receiver has asked the Court to award as fees the net balance of the Estate (approximately $423,000). (See Receiver's Final Fee Application and Final Status Report.) The SEC has opposed the Receiver's request and has alternatively proposed that the net Estate be divided equally between defrauded investors and the Receiver. (See Commission Response and Alternative Proposal and Supplemental Memo.) The Receiver has filed a reply seeking, alternatively, payment of one-third of the net Estate to investors through a "tier" vs. pro-rata approach, with the remainder of the net Estate going to the Receiver as fees. (See Receiver's Reply.) This matter is currently pending before the Court. If the Court orders a distribution to investors, the SEC intends to submit to the Court a proposed Order to Show Cause with a proposed Plan, thereby beginning the process by which a final distribution plan can be approved by this Court and funds can be distributed to investors. The proposed plan will be posted on this website.
Related Criminal Proceedings
On November 4, 2010, federal criminal authorities indicted Stinson in a related criminal action, charging him with five counts of wire fraud, four counts of mail fraud, nine counts of money laundering, one count of bank fraud, three counts of filing false tax returns, two counts of obstruction of justice, and two counts of making false statements to federal agents. See USA v. Stinson, 2:10-cr-00724 (E.D. Pa.) (MMB). On August 15, 2011, Stinson pled guilty to all 26 counts of the indictment. By revised judgment filed on December 16, 2013, the Honorable Michael M. Baylson sentenced R. Stinson to 324 months in prison and ordered Stinson to pay full restitution to his victims.