SEC v. Vitale, et al.
Case No. 14-cv-60954-DPG-WCT (S.D. Fla.)
On April 23, 2014, the SEC filed a complaint against Robert J. Vitale (“Vitale”) and Realty Acquisitions and Trust, Inc. (“RATI”) (collectively, the “Defendants”) and named Coral Springs Investment Group, Inc. (“CSIG”) as a relief defendant (“Relief Defendant”). The complaint alleged that, between 2004 and 2010, the Defendants fraudulently raised at least $8.7 million from investors through four real estate securities offerings. The complaint further alleged that Vitale violated federal securities laws by having effected transactions in securities for the account of others without being registered as a broker. See Complaint.
The Defendants and Relief Defendant were ordered to disgorge all investor assets in their possession, custody, or control, which consisted of certain real property titled in the name of RATI, referred to as the South Federal Property, of which they surrendered to the Court for liquidation. The Defendants and Relief Defendant were ordered to pay a total of $446,598.00 in disgorgement, prejudgment interest, and penalties, which could be satisfied in part or whole by the proceeds of the sale of the South Federal Property. See Vitale’s Final Judgment, RATI’s Final Judgment, and CSIG’s Final Judgment.
A liquation agent was appointed and following the sale of the South Federal Property, $661,799.03 was deposited in an interest-bearing CRIS account with the Court. On June 17, 2016, the Court ordered $408.09 to be transferred to satisfy a lien on the South Federal Property, leaving $661,390.94 available for the distribution to harmed investors (“Distribution Fund”).
On June 17, 2016, the Court appointed Damasco & Associates LLP as the Tax Administrator to fulfill the tax obligations of the Distribution Fund.
On December 9, 2016, the SEC filed an unopposed motion to transfer funds, appoint a distribution agent, and to approve the proposed distribution plan, together with the proposed distribution plan (“Distribution Plan”) attached as Exhibit A. See the SEC’s Motion to Transfer Funds, Appoint Distribution Agent, and Approve Proposed Distribution Plan.
On January 3, 2017, the Court granted the SEC’s motion and entered an order that appointed Nichola L. Timmons, a Commission employee, as the Distribution Agent to oversee the administration and distribution of the Distribution Fund to harmed investors, approved the Distribution Plan, and ordered the transfer of all funds in the CRIS account, $661,390.94, plus accrued interest, to the Commission for distribution in accordance with the Distribution Plan. See Order Transferring Funds, Appointing Distribution Agent, and Approving Proposed Distribution Plan and the Distribution Plan.
The Distribution Plan provides that the distribution of the Distribution Fund shall be made on a pro rata basis to the 59 Eligible Recipients, who were harmed by the Defendants’ misconduct and suffered a net loss. The Eligible Recipients Pro Rata Shares are shown on the Pro Rata Share Calculation Chart, attached as Exhibit B.
On March 7, 2017, the Court entered an order establishing a Fair Fund for the funds held by the Commission. See the Court’s Order.
For more information, please contact the Distribution Agent:
Nichola L. Timmons, SEC, Office of Distributions
Telephone Number: 202-551-4456