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Tag: contempt of court

  • BULLETIN: Trevor Cook Jailed For Contempt In Minnesota Ponzi Scheme Case; Judge Orders Him To Surrender $27 Million, Submarine, Houseboat, More

    UPDATED 7:55 P.M. ET (U.S.A.) A federal judge has ordered Trevor Cook jailed for not turning over assets in a Minnesota Ponzi scheme case brought by the SEC.

    Chief U.S. District Judge Michael J. Davis found Cook in civil contempt of court. U.S. Marshals “escorted Cook from the courtroom to jail,” the SEC said.

    “Mr. Cook has elected to disregard the court’s orders and will now be a guest of the federal correctional system until he mends his ways,” said Merri Jo Gillette, director of the SEC’s Chicago Regional Office.

    Cook, accused with Christian radio host Pat Kiley in November of operating a complex financial fraud involving forex trading, would remain jailed until he surrendered $27 million “located in offshore accounts, a BMW and two Lexus automobiles, a submarine, a houseboat, a collection of expensive watches, a collection of Faberge eggs, Bon Jovi concert tickets, and $670,000 in cash,” the SEC said.

    An investor said in a court deposition that Cook told him he bought the two-person submarine on eBay for $40,000 to access a private island in Canada. Investigators said the scheme involved at least $190 million.

  • Trevor Cook Allegedly ‘Refused’ To Cooperate With Ponzi Receiver; Security Guards Posted At Van Dusen Mansion In Minneapolis

    A Minnesota man accused of operating a Ponzi scheme with Christian radio host Pat Kiley is not cooperating with the court-appointed receiver in the case and might have spent $30,000 on “gift cards” after the SEC and CFTC brought twin actions last month, according to the receiver.

    The receiver, R. J. Zayed, described efforts to locate and claim assets tied to the alleged $190 million fraud as an international paper chase.  On Dec. 21, Zayed said, the Ontario Superior Court of Justice recognized his appointment by a U.S. federal judge and granted him power over receivership assets in Canada.

    Zayed said he was able to take control over a Cook property in Rainy River. Some investors said Cook had purchased a two-person submarine on eBay for $40,000 to access the island property, but Zayed did not mention the submarine in his initial receivership report to U.S. District Court Chief Judge Michael J. Davis.

    “Based on the Receiver’s Canadian authority, the Receiver obtained a Certificate of Pending Litigation that has been filed against the property in Canada to prevent its transfer without the authority of the Receiver. In addition, the Receiver is in the process of obtaining the three necessary appraisals to sell the property.”

    The situation involving land in Panama upon which a casino was planned is less clear because of litigation filed against receivership assets in the Central American country by Oxford FX Growth, one of the relief defendants named in U.S. litigation.

    “Prior to the appointment of the Receiver, Relief Defendant Oxford FX Growth, L.P. secured Panamanian counsel and filed a lawsuit in Panama in an effort to prevent the sale of the real estate in Panama that was acquired with funds of the Receiver Estates,” Zayed said. “The Receiver has taken control of the Panamanian lawsuit, including the costs of litigation.”

    Zayed said he had been in contact with legal counsel for Oxford FX Growth, and learned that four of five pieces of property had been “successfully attached” and secured by a bond in the amount of $200,000.

    He also learned that Oxford FX Growth had filed a local claim in Panama against Cook, Gary Saunders and Holger Bauchinger for $12 million and that lawyers in Panama are attempting to perfect service.

    The Cook/Kiley investigation is among a number of Ponzi probes in Minnesota. Like other Ponzi cases, it has included spectacular allegations that investor funds were diverted to acquire expensive automobiles and real-estate. Among the assets frozen in the case is the landmark Van Dusen Mansion at 1900 LaSalle Ave. in Minneapolis.

    Zayed said he took control of the mansion and secured its furnishings and equipment on Nov. 24, with the assistance of the U.S. Marshal’s Service and the Minneapolis Police Department.

    “Trevor Cook, Patrick Kiley, Graham Cook and Marc Trimble were found on and escorted from the premises without being allowed to remove any property (except for Patrick Kiley who was allowed to take his personal clothing and toiletries with him),” Zayed said.  “All exterior locks were changed and security guards were posted to safeguard the property.”

    He added that he found 41 computer hard drives and other media at the mansion and that they were “forensically copied.” Meanwhile, 21 computer hard drives and other media were found at a separate property at 12644 Tiffany Court in Burnsville, Minn. The data was copied, the premises and furnishing were secured, locks were changed and guards were posted.

    To date, Zayed said he has seized six cars — a 1989 Rolls Royce; a 1985 Pontiac Fiero;  a 1989 Mercedes 420 SEL; a 1998 BMW Z3; a 2000 Lexus; and a 2004 Audi RS6 — and “has identified additional vehicles that may be subject to the Receivership.”

    Cook, he said, “has asserted the Fifth Amendment privilege and refused to cooperate with the Receiver.” Zayed also asserted that Cook might have depleted receivership assets after the SEC and CFTC brought their respective cases.

    “In December, the Receiver received information that Mr. Cook had been purchasing gift cards in large denominations,” Zayed said. “As a result of this information, Mr. Cook turned over approximately $30,000 in gift cards and now faces Motions brought by the SEC and CFTC for a Rule to Show Cause as to why he should not be held in contempt of the Court’s asset freeze orders.”

    A hearing on the motions is set for Jan. 8.

    Zayed said he has been receiving “30 to 60” calls from investors each day. He established a website for information.

    See Cook/Kiley Receivership website.

    U.S. District Court for the District of Minnesota also has established a Cook/Kiley website.

  • SEC Seeks Contempt Order Against Trevor Cook; Minnesota Man Said To Have Bought Two-Person ‘Submarine’ With Ponzi Proceeds

    ponziblotterTrevor Cook, the Minnesota man implicated with Christian radio host Pat Kiley in a Ponzi and currency-trading scheme that collected at least $190 million, already has taken the 5th Amendment in a civil case brought by the SEC.

    The SEC now is seeking a contempt ruling against Cook, amid allegations he violated the asset freeze and receivership orders entered by a federal judge last month.

    A hearing on the contempt allegations began Dec. 11, but was continued to Jan. 5. The SEC said Cook, whom investors said bought a submarine on eBay for $40,000 and used it to access a private island he bought in Canada, hid assets from the court “by using an undisclosed credit card to make thousands of dollars of retail purchases.”

    Screen shot: Deposition in the Trevor Cook case.
    Screen shot: Deposition in the Trevor Cook case.

    Chief U.S. District Judge Michael Davis ordered Cook to surrender his passport.

    The Star Tribune of Minneapolis – St. Paul, which finds itself covering at least three major Ponzi scheme cases in the state, reported that Cook bought “gift cards” after the asset freeze.

    An attorney for the SEC argued that the gift cards smack “of money laundering,” the newspaper reported.

    The gift-card purchases occurred after the asset freeze was ordered, the SEC said. The agency also alleged that Cook failed “to turn over assets to the Court appointed receiver, to repatriate assets held in foreign countries, and to produce an accounting of investor funds.”