UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF FLORIDA 

CASE NO. 20-CIV-81205-RAR

SECURITIES AND EXCHANGE 

COMMISSION,

Plaintiff,

v. 

COMPLETE BUSINESS SOLUTIONS 

GROUP, INC. d/b/a PAR FUNDING, et al.,

Defendants.

_______________________________/ 

ORDER DENYING RECEIVER’S EXPEDITED MOTION TO EXPAND 

RECEIVERSHIP TO INCLUDE 19 COUNTRY DRIVE, MORRISTOWN, NJ 07960

THIS CAUSE comes before the Court upon the Receiver’s Expedited Motion to Expand 

the Receivership to Include 19 Country Drive, Morristown, NJ 07960 [ECF No. 1180] (“Motion”), 

filed on March 9, 2022. In the Motion, the Receiver seeks to expand the scope of the Court’s 

Amended Order Appointing Receiver dated August 13, 2020 [ECF No. 141] (“Receivership 

Order”), to include the property located at 19 Country Drive, Morristown, NJ 07960 (“Property”). 

The Court has reviewed the Motion; One Country Drive, LLC and Michelle Scaramellino’s 

Response in Opposition [ECF No. 1290] (“MS Response”); Daniel Scaramellino’s Response [ECF 

No. 1291] (“DS Response”); the Receiver’s Reply [ECF No. 1312]; all relevant portions of the 

record; and held a hearing on the Motion on August 3, 2022 [ECF No. 1336] (“Hearing”). For the 

reasons set forth below, it is hereby 

ORDERED AND ADJUDGED that the Receiver’s Motion is DENIED. 

BACKGROUND

On December 16, 2020, the Court expanded the Receivership to include Eagle Six 

Consultants, Inc. (“Eagle Six”). [ECF No. 436]. On May 28, 2019, Daniel Scaramellino entered 

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into a series of agreements with Eagle Six—including a Loan Agreement and a Secured 

Convertible Line of Credit—under which Scaramellino borrowed $7,500,000.00 from Eagle Six. 

Mot. ¶ 2. Daniel Scaramellino deposited the first advance under the Loan Agreement, for 

$2,500,000, into a checking account with a prior balance of $187,925.36. Id. ¶¶ 2–3. On June 10, 

2019, Daniel Scaramellino transferred $1,499,220.38 from the checking account to a savings 

account in the name of V&S. Id. ¶ 4. Prior to this transfer, the savings account had a balance of 

$1,500,779.62. Id. On July 3, 2019, Daniel Scaramellino transferred $2,072,173.86 from the 

savings account to a checking account. Id. ¶ 5. That same day, on July 3, 2019, Daniel 

Scaramellino sent a wire totaling $2,072,173.86 to Signature Closing Services, LLC. The wire 

referenced “19 Country Drive, Morristown NJ 07960.” Id. ¶ 6. The Property was titled in the 

name of Michelle Scaramellino. Id. ¶ 7. 

Since that time, Daniel Scaramellino has made some interest payments on his Loan 

Agreement with Eagle Six. Id. ¶ 1. However, he stopped making any payments when the Court 

issued its Order Appointing Receiver in this case. Id. The current balance, including interest, that 

Daniel Scaramellino owes Eagle Six exceeds $8.7 million dollars. Id. On September 7, 2021, the 

Court entered an Order allowing the Receiver to file a lawsuit against Daniel Scaramellino relating 

to the outstanding debt. [ECF No. 747]. The Receiver has since filed a lawsuit against Daniel 

Scaramellino and it is currently pending in the United States District Court for the Middle District 

of Florida. Mot. at 3, n.2. 

In March of 2022, the Receiver learned that the Property was listed for sale for 

$2,450,000.00 and was in the process of being sold. Mot. ¶ 10. As a result, the Court approved a 

temporary agreement between the parties to allow the sale of the Property to proceed, on the

condition that the proceeds from the sale of the Property (“Sale Proceeds”) would be held in escrow 

by the Receiver pending resolution of the instant Motion, and the Sale Proceeds would be

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substituted in place of the Property as the res of the Motion. Reply at 3, n.2. Since that time, the 

parties have attempted to settle this matter, but were ultimately unsuccessful.

ANALYSIS

In the Motion, the Receiver asks the Court to expand the Receivership to include the Sale 

Proceeds from 19 Country Drive. See generally Mot. Daniel Scaramellino, Michelle 

Scaramellino, and 19 Country Drive are not parties to the underlying action and have never been 

accused of any wrongdoing related to the CBSG/Par Funding fraudulent scheme. See Reply at 7. 

In the Receiver’s view, the Property was purchased with, and represents proceeds of, commingled

investor funds and thus constitutes Recoverable Assets under the terms of this Court’s

Receivership Order. Mot. at 6. As such, the Receiver believes it is necessary to include the Sale 

Proceeds within the Receivership Estate to preserve these “scheme proceeds” so they may be 

available for the benefit of investors. Id. He argues, “expansion is particularly appropriate ‘to 

effectively safeguard assets for the benefit of investors . . . and to guard against potential 

dissipation.’” See CCUR Aviation Fin., LLC v. S. Aviation, Inc., 21-CV-60462, 2021 WL 

1738764, at *2 (S.D. Fla. May 3, 2021). 

The Court may order equitable relief against a person who is not accused of wrongdoing

(i.e., a non-party) in a securities enforcement action. See S.E.C. v. Sun Cap., Inc., No. 209-CV229-FtM-29SPC, 2009 WL 1362634, at *1 (M.D. Fla. May 13, 2009) (citing S.E.C. v. Cavanaugh, 

445 F.3d 105, 109 n.7 (2d Cir. 2006)). This non-party is commonly referred to as a relief 

defendant. Id. The Court can order such relief where the relief defendant (1) has received illgotten funds, and (2) does not have a legitimate claim to those funds.” Janvey v. Adams, 588 F.3d 

831, 834 (5th Cir. 2009) (citing S.E.C. v. Colello, 139 F.3d 674, 677 (9th Cir. 1998)). Here, it is 

undisputed that the funds received by Daniel Scaramellino—advances under the Loan Agreement

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with Eagle Six—were received from ill-gotten funds.1 But for the inflow of funds from Eagle Six, 

Daniel Scaramellino did not have sufficient funds in his checking and savings accounts to purchase 

the Property at the time he did. Reply at 2. Having established that Daniel Scaramellino received 

and used ill-gotten funds to purchase the Property, the Court must determine whether Daniel 

Scaramellino has a legitimate claim to the funds he received from Eagle Six. As discussed at the 

Hearing, the short answer is yes. 

Daniel Scaramellino received the funds at issue as the result of a valid written loan 

agreement between himself and Eagle Six. See Mot. at 2; see also [ECF No. 1180-1] (“Loan 

Agreement”). The Loan Agreement imposed rights and obligations upon Daniel Scaramellino—

namely, the right to receive funds in return for the repayment of the loan with interest. See Loan 

Agreement; see also DS Resp. at 8. There has been no indication that the loan was fraudulent or 

that the Scaramellinos were otherwise involved in Defendants’ fraudulent scheme. Without more, 

the Court cannot determine that Daniel Scaramellino did not have a legitimate claim to the funds. 

Compare Sun Cap. Inc., 2009 WL 1362634, at *2 (holding relief defendant had legitimate claim 

to loan proceeds from the wrongdoer defendant where there was a valid written loan agreement 

that imposed obligations and rights upon the relief defendant), with In re Fin. Federated Title & 

Trust, Inc., 347 F.3d 880, 881 (11th Cir. 2003) (affirming bankruptcy court order establishing 

constructive trust on defendant wrongdoer’s home that was purchased with 90% fraudulent funds), 

S.E.C. v. Kirkland, No. 606-CV183-ORL-28KRS, 2006 WL 2639522, at *2–3 (M.D. Fla. 2006) 

(granting motion to expand receivership over property defendant wrongdoer purchased with 

fraudulent funds from receivership entities), and Commodity Futures Trading Comm’n v. Hudgins, 

620 F. Supp. 2d 790, 795 (E.D. Tex. 2009) (imposing equitable lien and directing sale of 

1

 The Court has previously determined that the funds Eagle Six received from Par Funding constitute 

commingled investor funds. See [ECF No. 436]. 

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condominium where defendant wrongdoer gifted his girlfriend the funds to pay off her 

condominium mortgage with Ponzi scheme funds). 

This finding is further supported by the Receiver’s Notice Regarding Expedited Motion to 

Expand Receivership to Include 19 Country Drive, Morristown, NJ 07960. [ECF No. 1363] 

(“Notice”). At the Hearing, the Court granted the Receiver’s ore tenus motion to allow 

supplemental briefing. See [ECF No. 1337]. The purpose of the supplemental briefing was to give 

the Receiver an opportunity to present the Court with evidence that the loan agreement was invalid, 

or that the Scaramellinos were more closely tied to the fraudulent scheme than previously 

indicated. In light of the issues addressed at the Hearing, the Receiver has informed the Court that 

he will not be filing supplemental briefing. See Notice. Accordingly, given the current record 

before the Court, Daniel Scaramellino has a legitimate claim to the funds at issue.2

 

Based on the foregoing, it is hereby ORDERED AND ADJUDGED as follows:

1. The Receiver’s Motion to Expand [ECF No. 1180] is DENIED. 

2. The Receiver shall disburse the Sale Proceeds to the Respondents—Daniel 

Scaramellino, Michelle Scaramellino, and 19 Country Drive, LLC.

DONE AND ORDERED Fort Lauderdale, Florida, this 22nd day of August, 2022. 

__________________________________

RODOLFO A. RUIZ II 

UNITED STATES DISTRICT JUDGE 

Copies to: Counsel of Record

2

 Moreover, the Receiver is currently in litigation to collect on the total debt owed by Daniel Scaramellino 

in the Middle District of Florida. Mot. ¶ 8.

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