U.S. SECURITIES & EXCHANGE COMMISSION
Litigation Release No. 18285 / August 13, 2003
SEC OBTAINS SEIZURE OF LUXURY YACHT TO ENFORCE $21 MILLION JUDGMENT AGAINST DEFENDANT VLADISLAV STEVEN ZUBKIS
SECURITIES AND EXCHANGE COMMISSION v. VLADISLAV STEVEN ZUBKIS, 97 Civ. 8086 (S.D.N.Y.)
The Securities and Exchange Commission announced today that, on August 12, 2003, the United States Marshal's Service seized a 75-foot luxury yacht in San Diego, California, believed to belong to defendant Vladislav Steven Zubkis, as part of the Commission's efforts to enforce a $21 million securities fraud judgment against Zubkis. On August 11, the Commission obtained an emergency order from Federal District Judge John G. Koeltl in New York, without notice to Zubkis, to seize the yacht and turn it over to a court-appointed receiver before Zubkis could remove it from United States waters. The receiver is currently holding the yacht in San Diego, pending a final determination by the Court regarding whether to permit the receiver to sell the yacht and apply the sale proceeds toward satisfaction of the Commission's judgment against Zubkis.
Judge Koeltl previously held Zubkis liable for orchestrating a complex securities fraud scheme involving the use of boiler-room stock sale techniques and other egregious securities fraud violations. The Court ordered Zubkis to disgorge $21,578,731 in his illicit gains from the scheme, and permanently barred Zubkis from serving as an officer and director of a public company. Judge Koeltl previously found that, over "a period of several years, Mr. Zubkis, as head of [his corporation] Z3, knowingly orchestrated a securities fraud that netted several million dollars and from which he stood to profit personally. The misrepresentations in this case were egregious. This is, moreover, not the first time that Mr. Zubkis has been found in violation of securities related rules."
In ordering the yacht seizure on August 11, Judge Koetl found that the "Commission has made a prima facie showing, and has demonstrated a sufficient basis to infer, that . . . Zubkis violated the [disgorgement] Judgment by failing to pay any portion of the $21,578,731.39 ordered disgorgement, and by continuing to serve as an officer and director of [a public company]," and that "Zubkis is the legal or equitable owner of the Yacht." In addition to ordering the yacht seizure, Judge Koeltl, at the Commission's request, froze certain "escrow accounts" also believed to be owned by Zubkis.