SEC v. A.C.L.N., Ltd., et al.
Case No. 02-cv-07988-LAP (S.D.N.Y)
On October 8, 2002, the Commission filed a complaint against A.C.L.N., Ltd. ("ACLN"), Abderrazak "Aldo" Labiad ("Labiad"), Joseph J.H. Bisschops ("Bisschops"), Alex de Ridder ("Ridder"), BDO International (Cyprus) ("BDO International"), Minas Ioannou ("M. Ioannou"), Christakis Ioannou ("C. Ioannou"), Emerald Sea Marine, Inc. ("Emerald Sea"), Pearlrose Holdings International, S.A. ("Pearlrose Holdings"), and Scott Investments S.A. ("Scott Investments") (collectively, the "Defendants"). The complaint also named Scandinavian Car Carriers A/S ("Scandinavian"), Sergui, Ltd. ("Sergui"), Pandora Shipping, S.A. ("Pandora"), DCC, Limited. ("DDC"), Maverick Commercial, Inc. ("Maverick"), and Westbound Development Corp. ("Westbound") as relief defendants (collectively, the "Relief Defendants"). The complaint alleged that, from 1998 through 2001, ACLN was the vehicle for an exceptionally bold and elaborate financial fraud that resulted in losses of hundreds of millions of dollars to investors in the U.S. and abroad. The complaint alleged that Labiad, Bisschops and Ridder, controlled ACLN and constructed the fraudulent scheme, and they used Emerald Sea, Scott Investments and Pearlrose Holdings to engage the fraudulent stock transactions. The complaint named BDO International, M. Ioannou and C. Ioannou because they were the auditors of ACLN at the time of the scheme and the Relief Defendants were named due to holding proceeds of the illegal conduct. See Complaint.
A total of five final judgments were entered in this action. The final judgment against BDO International, M. Ioannou and C. Ioannou was entered on October 18, 2002, and ordered BDO International to pay disgorgement and prejudgment interest of $62,196.71, which was paid on October 31, 2002. See Final Judgment. Three separate final judgments were entered on September 16, 2004 against Labiad, Scandinavian and ACLN. In each of these, the defendants were ordered to pay disgorgement by paying the current balance in certain foreign bank accounts, including accrued interest, to the Court. No specific dollar amount was given in the final judgments, except that the final judgment against Scandinavian capped its financial liability at $25,000,000.00. On July 8, 2003, $3,291,096.53 was paid to the Court on behalf of ACLN and on May 18, 2005, $24,911,993.87 was paid to the Court on behalf of Scandinavian. See Labiad's Final Judgment, Scandinavian's Final Judgment, and ACLN's Final Judgment. On November 17, 2005, a final judgment was entered against the remaining Defendants and Relief Defendants. The final judgment states that the disgorgement paid collectively between these Defendants and Relief Defendants was not to exceed $79,398,223.84 before prejudgment interest, or $94,499.209.01 including prejudgment interest. As of January 12, 2017, no payments have been made towards the $94,499,299.01 ordered. See Final Judgment. In the final judgments, the Clerk was ordered to hold the funds in an interest bearing account with the Court Registry Investment System (collectively, the "Fund"), pending further order of the Court.
The Court entered five final judgments in this action. See BDO International M. Ioannou and C. Ioannou's Final Judgment; Labiad's Final Judgment; Scandinavian's Final Judgment; ACLN's Final Judgment; and the Remaining Parties Final Judgment. The Defendants and Relief Defendants have paid a total of $28,265,287.11 of the amount ordered into the Fund for distribution to harmed investors ("Distribution Fund").
On November 17, 2011, the Court appointed Damasco & Associates LLP, as the Tax Administrator to fulfill the tax obligations of the Distribution Fund.
On March 28, 2012, the Court appointed Garden City Group, LLC as the Distribution Agent to oversee the administration and distribution of the Distribution Fund to harmed investors.
On February 12, 2013, the Commission filed a motion to approve the distribution plan, together with the distribution plan ("Distribution Plan"). See Motion to Approve Distribution Plan.
The Distribution Plan provides that the distribution of the Distribution Fund shall be made on a pro rata basis to the Eligible Claimants, who were harmed by the Defendants' misconduct and suffered a net loss.
On March 23, 2015, the Commission filed a motion and memorandum in support of an order to disburse the Distribution Fund for the distribution to Eligible Claimants, pay taxes and fees and expenses of the Distribution Agent. See the Commission's Motion. On March 26, 2015, the Court granted the Commissin's motion and entered an order to transfer funds to the Distribution Agent for disbursement to Eligible Claimants and for payment of taxes, fees and expenses. See the Court's Order. A total of $29,804,515.26 was distributed to Eligible Claimants.
On December 6, 2018, the Commission filed a motion for an order authorizing a second disbursement of the Distribution Fund to certain Eligible Claimants; and if deemed cost effective, that the Distribution Agent be authorized to make another disbursement to those Eligible Claimants who cashed their second disbursement check and will receive a payment greater than or equal to $25.00. See the Commission’s Motion.
On December 11, 2018, the Court entered an order granting the Commission’s motion. See the Court’s Order.
For more information, please contact the Distribution Agent: