U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 18260 / July 29, 2003
S.E.C. v. Merrill Scott & Associates, Ltd., et al., Docket No. 2:02CV 0039C (USDC Utah)
The Securities and Exchange Commission filed on July 23, 2003, a Motion for Contempt Against David E. Ross, II, alleging that Ross had violated a January 15, 2002, order issued by the United States District Court for the District of Utah freezing the assets of certain defendants in S.E.C. v. Merrill Scott & Associates, Ltd., et al. Ross, an attorney licensed to practice in Utah, Kansas and Illinois, was originally charged by the Commission in that civil injunctive action with violations of the antifraud provisions of the federal securities laws for his conduct in an offshore investment scheme.
In the January 2002 action, the Commission obtained an order, among other things, freezing the assets of a complex network of legal entities and accounts that operated under the umbrella of Merrill Scott & Associates, Ltd. ("Merrill Scott"). The court also appointed a receiver to locate, marshal and preserve the assets and accounts of the Merrill Scott organization for ultimate distribution to victims of the scheme. Pursuant to that order, Ross was required to assist the receiver in locating all the assets and accounts of the Merrill Scott organization known to Ross. The contempt motion alleges that in violation of the January 15, 2002, order, Ross failed to disclose to the receiver certain assets and accounts and, in fact, transferred and assisted the transfer of $544,049 from accounts subject to the asset freeze; in one transaction, $389,884 was transferred to an account located in the Bahamas.
The Commission is seeking that Ross be held in contempt of the court's orders, and is requesting that Ross be ordered to repay the funds transferred in violation of the court's asset freeze and to provide a sworn accounting of all accounts and assets of the Merrill Scott organization.