U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 20351 / October 30, 2007
Securities and Exchange Commission v. Patrick Kirkland, et al., Civil Action No. 06-CV-183-ORL-28 KRS Antoon (M.D. Fla.)
Court Finds Defendant Patrick Kirkland in Contempt of Court for Violating Asset Freeze Order and Imposes Remedial Sanctions
The Securities and Exchange Commission announced that on October 24, 2007, the Honorable John Antoon II, United States District Judge for the Middle District of Florida, entered an order of civil contempt against Patrick Kirkland for violating the asset freeze imposed against him on February 24, 2006.
Following an evidentiary hearing on October 19, 2007, the Court found Kirkland had violated the asset freeze by cashing two checks in June 2006 intended for the estate of the Court-appointed Receiver, which Kirkland acknowledged using for personal expenses. The Court ruled Kirkland failed to demonstrate he was unable to comply with the asset freeze order and could not justify his violations. The Court ordered Kirkland to repay the Receiver the value of the two checks, totaling $3,957.73, in two parts within 60 days.
The Commission's complaint in this matter, filed on February 16, 2006, alleged that from April 1999 until the date of the complaint, Kirkland and the other Defendants raised at least $59 million by offering and selling unregistered securities in the form of investments in real estate developments located in Florida, Georgia, and Texas. According to the complaint, the Defendants were selling investments called triplexes, which were apartments designed for shared senior rental living. The complaint further alleged that Defendants promised investors exorbitant profits of 23% to 55%, and through sales agents, falsely assured prospective investors that over 200 calls a day were coming in from seniors interested in leasing the properties, and that there was a waiting list. In fact, according to the complaint, the completed developments had rental rates of 34% or less, and investors who purchased triplexes lost money.
The Court entered an ex parte temporary restraining order and asset freeze against Kirkland on February 16, and a preliminary injunction and further asset freeze on February 24, 2006. In September 2007, the Court granted the Commission's motion for summary judgment against Kirkland, ruling the Commission had proved Kirkland's violations of the federal securities laws. The Court entered a permanent injunction against Kirkland.
For further information, see Litigation Release No. 19570 (February 17, 2006)