Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_07-cv-01724/USCOURTS-caed-2_07-cv-01724-13/pdf.json

Nature of Suit Code: 850
Nature of Suit: Securities, Commodities, Exchange
Cause of Action: 12:22 Securities Fraud

---

Stipulation to Agreed Order Appointing Receiver 

- 1 - 

121673.2

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

BOUTIN DENTINO GIBSON 

DI GIUSTO HODELL INC. 

Chris Gibson, SBN 073353 

Maralee MacDonald, SBN 208699 

555 Capitol Mall, Suite 1500 

Sacramento, CA 95814-4603 

(916) 321-4444 

Attorneys for Receiver 

Michael J. Quilling 

UNITED STATES DISTRICT COURT 

EASTERN DISTRICT OF CALIFORNIA 

SACRAMENTO DIVISION 

 

SECURITIES AND EXCHANGE COMMISSION, 

 Plaintiff, 

 v. 

SECURE INVESTMENT SERVICES, INC., 

AMERICAN FINANCIAL SERVICES, INC., 

LYNDON GROUP, INC., DONALD F. NEUHAUS, 

and KIMBERLY A. SNOWDEN, 

 Defendants. 

 Case No. 2:07-cv-01724 LEW CMK 

STIPULATION TO ENTER 

AGREED ORDER APPOINTING 

RECEIVER 

Hearing: Nov. 2, 2007 

Time: 10:00 a.m. 

The parties, at the request of Michael J. Quilling, the Receiver appointed in these 

proceedings, (“Receiver”), respectfully submit this Stipulation for Entry of Agreed Order 

Appointing Receiver under L.R. 66-232. 

BACKGROUND

1. By Order of August 24, 2007, the Court temporarily appointed Michael J. 

Quilling as Receiver for Secure Investment Services, Inc. (“SIS”), American Financial Services, 

Inc. (“AFS”) and Lyndon Group, Inc. (“LGI”) and other related entities. 

2. Pursuant to L.R. 66-232, this Court has set a further hearing regarding 

continuation of the receivership and Receiver’s appointment. 

Case 2:07-cv-01724-GEB-CMK Document 80 Filed 10/31/07 Page 1 of 10
Stipulation to Agreed Order Appointing Receiver 

- 2 - 

121673.2

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

STIPULATION

3. The parties hereby stipulate to the entry of the Agreed Order Appointing Receiver 

attached as Exhibit A to this Stipulation. 

 Respectfully submitted, 

 

 BOUTIN DENTINO GIBSON DI GIUSTO 

 HODELL INC. 

Dated: October 29, 2007 By /s/ Maralee MacDonald 

 Maralee MacDonald 

 Attorneys for Receiver of Secure 

Investment Services, Inc., American 

Financial Services, Inc., and Lyndon 

Group, Inc. 

 SECURITIES AND EXCHANGE 

 COMMISSION 

Dated: October 26, 2007 By /s/ Thomas J. Eme (authorized on 10/26/2007)

 Thomas J. Eme 

 John S. Yun 

Attorneys for Plaintiff Securities 

Exchange and Commission 

 MOSS & LOCKE 

Dated: October 27, 2007 By /s/ Bruce Locke (authorized 10/27/07) 

 Bruce Locke 

 Attorneys for Defendant 

 Donald Neuhaus 

 KENNY, SNOWDEN & NORINE 

Dated: October 26, 2007 By /s/ Mark Norcross (authorized on 10/26/2007)

 Mark Norcross 

 Attorney for Defendant 

 Kimberly Snowden 

Case 2:07-cv-01724-GEB-CMK Document 80 Filed 10/31/07 Page 2 of 10
Stipulation to Agreed Order Appointing Receiver 

- 3 - 

121673.2

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

EXHIBIT A 

(Agreed Order Appointing Receiver) 

Case 2:07-cv-01724-GEB-CMK Document 80 Filed 10/31/07 Page 3 of 10
Agreed Order Appointing Receiver 

- 1 - 

121673.2

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

UNITED STATES DISTRICT COURT 

EASTERN DISTRICT OF CALIFORNIA 

SACRAMENTO DIVISION 

 

SECURITIES AND EXCHANGE COMMISSION, 

 Plaintiff, 

 v. 

SECURE INVESTMENT SERVICES, INC., 

AMERICAN FINANCIAL SERVICES, INC., 

LYNDON GROUP, INC., DONALD F. NEUHAUS, 

and KIMBERLY A. SNOWDEN, 

 Defendants. 

 Case No. 2:07-cv-01724 LEW CMK 

AGREED ORDER APPOINTING 

RECEIVER 

This matter came before this Court on the Stipulation between Plaintiff Securities and 

Exchange Commission (“Commission”) and the Defendants for the appointment of a Receiver 

for the corporate Defendants for the duration of these proceedings. It appears that this Order 

Appointing Receiver is both necessary and appropriate in order to prevent waste and dissipation 

of the assets of the corporate Defendants to the detriment of investors pending further order of 

the Court. 

I.

 IT IS THEREFORE ORDERED: 

 1. This Court hereby takes exclusive jurisdiction and possession of the assets, 

monies, securities, choses in action, and properties, real and personal, tangible and intangible, of 

whatever kind and description, wherever situated, of the corporate Defendants and/or any entities 

Case 2:07-cv-01724-GEB-CMK Document 80 Filed 10/31/07 Page 4 of 10
Agreed Order Appointing Receiver 

- 2 - 

121673.2

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

they or the individual Defendants own or control (hereinafter “Receivership Assets”), and the 

books, records, computers and documents, including every writing of any kind, type and 

description or other instrument or device by which, through or upon which information has been 

recorded or preserved, including but not limited to memoranda, notes, letters, bank records, 

statements, checks, wire instructions and confirmations, tape recordings, electronic and digital 

media of all types, audio and video recordings and photographs of the corporate Defendants 

and/or any and all related entities they or the individual Defendants own or control, including but 

not limited to trusts, limited liability companies, corporations, partnerships and joint ventures 

(“Receivership Records”). The Receiver is hereby authorized to take and have possession of the 

Receivership Assets and Receivership Records. Until further order of this Court, the Receiver 

shall have complete and exclusive control, possession, and custody of all Receivership Assets 

and Receivership Records. 

 2. Michael J. Quilling of Quilling Selander Cummiskey & Lownds, 2001 Bryan 

Street, Suite 1800, Dallas, Texas 75201, with the phone number of (214) 871-2100 and facsimile 

number of (214) 871-2111, is appointed Receiver for the Receivership Assets and the 

Receivership Records. The bond in the sum of $10,000, already posted by the Receiver shall 

suffice to assure his conscientious performance of the duties and responsibilities imposed by this 

Order. 

 3. All persons, including the Defendants, and their officers, agents, servants, 

employees, brokers, facilitators, trustees, escrow agents, attorneys, and all persons in active 

concert or participation with them who receive actual notice of this Order by personal service or 

otherwise, and specifically including any bank or other financial or depository institution holding 

accounts for or on behalf of the Defendants, shall promptly deliver to the Receiver all 

Receivership Assets in the possession or under the control of any one or more of them and shall 

promptly surrender all Receivership Records. No separate subpoena shall be required. Upon 

presentment of this Order, all persons, including financial institutions, shall provide account 

balance information, transaction histories, all account records and any other Receivership 

Case 2:07-cv-01724-GEB-CMK Document 80 Filed 10/31/07 Page 5 of 10
Agreed Order Appointing Receiver 

- 3 - 

121673.2

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

Records to the Receiver or his agents, in the same manner as they would be provided were the 

Receiver the signatory on the account. 

 4. The Receiver is authorized, without breaching the peace and if necessary with the 

assistance of local peace officers or U.S. Marshals, to enter and secure any premises, wherever 

located or situated, in order to take possession, custody, or control of, or to identify the location 

or existence of Receivership Assets or Receivership Records. 

 5. All persons, including Defendants and their officers, agents, servants, employees, 

brokers, bankers, facilitators, trustees, escrow agents, attorneys, and all persons in active concert 

or participation with them who receive actual notice of this Order by personal service or 

otherwise, are enjoined from any way interfering with the operation of the Receivership or in any 

way disturbing the Receivership Assets and Receivership Records, specifically including any 

proceeding initiated pursuant to the United States Bankruptcy Code, except with the prior 

permission of this Court. Any actions so authorized to determine disputes relating to 

Receivership Assets and Receivership Records shall be filed in this Court. 

 6. The Receiver is hereby authorized to make appropriate notification to the United 

States Postal Service or any post office box or other mail depository to forward delivery of any 

mail addressed to the corporate Defendants or any company or entity under the direction or 

control of any of the Defendants, to himself. Further, the Receiver is hereby authorized to open 

and inspect all such mail to determine the location or identity of assets or the existence and 

amount of claims. 

 7. The Receiver is hereby authorized to make from Receivership Assets such 

ordinary and necessary payments, distributions, and disbursements as he deems advisable or 

proper for the marshaling, maintenance, or preservation of the Receivership Assets or 

Receivership Records. From and after the date of entry of this Order, the Receiver shall have the 

authority to conduct the business operations of the corporate Defendants and the entities they 

control, including the collection of rents or continuation or termination of any employment 

arrangement, leases and/or contracts and the terms thereof and to sell, rent, lease or otherwise 

hypothecate or dispose of the Receivership Assets. The Receiver shall have the authority to 

Case 2:07-cv-01724-GEB-CMK Document 80 Filed 10/31/07 Page 6 of 10
Agreed Order Appointing Receiver 

- 4 - 

121673.2

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

contact and negotiate with any creditors of the corporate Defendants for the purpose of 

compromising or settling any claim. To this purpose, in those instances in which Receivership 

Assets serve as collateral to secured creditors, the Receiver may surrender such assets to secured 

creditors, and shall have the authority to make such surrender conditional upon the waiver of any 

deficiency of collateral. Furthermore, the Receiver is authorized to renew, cancel, terminate, or 

otherwise adjust any pending lease agreement to which the corporate Defendants are a party. 

 8. The Receiver is hereby directed to file with this Court and serve upon the parties, 

within 30 days after entry of this Order, a preliminary report setting out the identity, location, 

and value of the Receivership Assets, and any liabilities pertaining thereto. 

 9. Any and all civil actions or other proceedings against the corporate Defendants 

are hereby stayed. Any person or entity wishing to continue to pursue or initiate a civil action or 

other proceeding against the corporate Defendants may do so only after obtaining permission 

from this Court to do so. Any claim or suit that seeks recovery from Receivership Assets, or that 

is hereinafter filed against the corporate Defendants, or the Receiver, shall be filed in this Court. 

This provision shall not apply to any criminal proceedings against the Defendants. 

 10. The Receiver is hereby authorized to employ such employees, accountants, and 

attorneys as is necessary and proper for the collection, preservation, maintenance and operation 

of the Receivership Assets and Receivership Records and to open bank accounts or other 

depository accounts in the name of the Receiver on behalf of the receivership estate. 

 11. The Receiver is hereby authorized to receive and collect any and all sums of 

money due or owing to the corporate Defendants, whether the same are now due or shall 

hereafter become due and payable, and is authorized to incur such expenses and make such 

disbursements as are necessary and proper for the collection, preservation, maintenance and 

operation of the Receivership Assets. The Receiver is further authorized, in his discretion, to 

abandon or sell assets which are less than $1,500.00 in value without obtaining further order of 

the Court, provided that such action is set forth in the Receiver’s Final Report. 

 12. The Receiver is hereby authorized to institute, defend, compromise, or adjust such 

actions or proceedings in state or federal courts now pending and hereafter instituted, as may in 

Case 2:07-cv-01724-GEB-CMK Document 80 Filed 10/31/07 Page 7 of 10
Agreed Order Appointing Receiver 

- 5 - 

121673.2

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

his discretion be advisable or proper for the protection of the Receivership Assets or proceeds 

therefrom, and to issue subpoenas, institute, prosecute, compromise or adjust such actions or 

proceedings in state or federal court as may in his judgment be necessary or proper for the 

collection, preservation, and maintenance of the Receivership Assets. 

 13. The Receiver is hereby authorized to institute such actions or proceedings to 

impose a constructive trust, obtain possession and/or recover judgment with respect to persons or 

entities who received assets or funds or proceeds from the corporate Defendants. All such 

actions shall be filed in this Court. The Receiver is specifically authorized to pursue such actions 

on behalf of and for the benefit of the constructive trust beneficiaries, including without 

limitation any and all investors who may be the victims of the fraudulent conduct alleged herein 

by the Commission. The Receiver is hereby appointed as the representative of such investors for 

the purpose of making requests to any authority, foreign or domestic, for the return of the funds 

that such investors contributed to the Defendants, wherever such funds may have been 

transferred, and for the purpose of filing actions to recover such funds wherever the Receiver 

may deem necessary. 

 14. The Receiver is hereby authorized to take any actions which could be taken by the 

officers, directors, managers, members, partners, trustees or other principals of the corporate 

Defendants. The Receiver is entitled to transact any business or take any action that the corporate 

Defendants would be authorized to take. The Defendants are hereby directed to execute any 

consent, authorization, resolution, or other document as may be required by any person to 

confirm the authority of the Receiver as granted in this paragraph. The Defendants are further 

directed to cooperate fully with the Receiver, including (1) delivering to the Receiver all 

Receivership Assets and Receivership Records, together with any related documents, records, 

names and contact information for persons who may be custodians or otherwise involved with or 

knowledgeable of the Receivership Assets or Receivership Records; (2) obtaining or providing 

all bank records involving transfers of invested funds provided to or disbursed by the Defendants 

or any subsequent transferee under the direct or indirect control thereof; (3) providing full 

accountings of the disposition of all funds invested with any Defendants; (4) providing all related 

Case 2:07-cv-01724-GEB-CMK Document 80 Filed 10/31/07 Page 8 of 10
Agreed Order Appointing Receiver 

- 6 - 

121673.2

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

financial records, computers, computer files, e-mail, passwords, keys, security cards, access 

codes for premises, vehicles, vessels, aircraft; and (5) granting access to safes or safe deposit 

boxes or any other facility containing Receivership Assets or Receivership Records. The Court 

expects that the Defendants will affirmatively assist the Receiver, and not merely allow control 

to be taken of Receivership Assets and Receivership Records. 

 15. Upon the request of the Receiver, the United States Marshal’s Office is hereby 

ordered to assist the Receiver in carrying out his duties to take possession, custody, or control of, 

or identify the location of, any Receivership Assets or Receivership Records. The Receiver is 

authorized to remove any person from any premises or real estate constituting a Receivership 

Asset that attempts to interfere with the Receiver, his attorneys or agents in the performance of 

their duties. The Receiver is further authorized to change any locks or other security 

mechanisms with respect to any premises or other assets that constitute or contain Receivership 

Assets or Receivership Records. 

 16. The Receiver shall keep the Commission apprised at reasonable intervals of 

developments concerning the operation of the receivership, and shall provide to the Commission 

upon request any documents under the control of the Receiver. 

 17. The Receiver shall file on at least a quarterly basis an application for approval of 

the disbursements for professional fees and expenses to himself or others. The Receiver may pay 

up to 90% of the professional fees and 100% of the expenses on a monthly basis, provided 

statements are made on a monthly basis to the Commission, no objections thereto have been 

presented, and applications have been made as required. Any and all costs incurred by the 

Receiver shall be paid from the Receivership Assets. 

 18. Except for an act of gross negligence or intentional misconduct, the Receiver and 

all persons engaged or employed by him shall not be liable for any loss or damage incurred by 

any person or entity by reason of any act performed or omitted to be performed by the Receiver 

or those engaged or employed by him in connection with the discharge of their duties and 

responsibilities in connection with the receivership. 

Case 2:07-cv-01724-GEB-CMK Document 80 Filed 10/31/07 Page 9 of 10
Agreed Order Appointing Receiver 

- 7 - 

121673.2

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

II.

 IT IS FURTHER ORDERED that this Court shall retain jurisdiction of this action for all 

purposes. The Receiver is hereby authorized and directed to apply to this Court, with notice to 

the Commission and the Defendants, for issuance of such other orders as may be necessary and 

appropriate in order to carry out the mandate of this Court. 

III.

 IT IS FURTHER ORDERED that this Order will remain in effect until modified by 

further order of this Court. 

 SIGNED this 30th day of October, 2007. 

 ____________________________________ 

 Honorable Ronald S.W. Lew 

 United States District Judge 

Case 2:07-cv-01724-GEB-CMK Document 80 Filed 10/31/07 Page 10 of 10