ORDER CREATING FAIR FUND AND APPOINTING 

TAX ADMINISTRATOR 

Case No. C 05-01631-JCC

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The Honorable John C. Coughenour 

SECURITIES AND EXCHANGE COMMISSION,

 Plaintiff, 

 v. 

C. PAUL SANDIFUR, JR., THOMAS G. 

TURNER, ROBERT A. NESS, THOMAS R. 

MASTERS, DAN W. SANDY, DAVID R. SYRE, 

AND TRILLIUM CORPORTION, 

 Defendants. 

Case No. C05-01631-JCC 

ORDER CREATING FAIR FUND AND 

APPOINTING TAX ADMINISTRATOR 

UNITED STATES DISTRICT COURT 

WESTERN DISTRICT OF WASHINGTON 

AT SEATTLE 

Case 2:05-cv-01631-JCC Document 238 Filed 12/30/10 Page 1 of 4
ORDER CREATING FAIR FUND AND APPOINTING 

TAX ADMINISTRATOR 

Case No. C 05-01631-JCC 

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This matter is before the Court on plaintiff Securities and Exchange Commission’s 

Motion to Create Fair Fund and Appoint Tax Administrator. (Dkt. No. 236.) No party filed 

an opposition to the motion. The Court, having reviewed the papers and pleadings on file, 

concludes that the motion should be granted. Accordingly: 

I. 

IT IS HEREBY ORDERED THAT the funds held by the Clerk of the Court relating 

to this matter shall become part of a Fair Fund for the benefit of injured investors, pursuant 

to 15 U.S.C. § 7246(a). The Fair Fund shall consist of all disgorgement, pre-judgment 

interest and civil penalties paid into the Clerk pursuant to the Final Judgment Against 

Defendant C. Paul Sandifur, Jr. (Docket Item 224), totaling $150,889.66, as well as all postjudgment interest earned on such payments. 

II. 

IT IS FURTHER ORDERED THAT Damasco & Associates, LLP is appointed as 

tax administrator to execute all income tax reporting requirements, including the preparation 

and filing of tax returns, with respect to the Fair Fund. Damasco & Associates shall be 

designated the administrator of the Fair Fund, pursuant to section 468B(g) of the Internal 

Revenue Code (IRC), 26 U.S.C. § 468B(g), and related regulations, and shall satisfy the 

administrative requirements imposed by those regulations, including but not limited to (a) 

obtaining a taxpayer identification number, (b) filing applicable federal, state, and local tax 

returns and paying taxes reported thereon out of the Fair Fund, and (c) satisfying any 

information, reporting, or withholding requirements imposed on distributions from the Fund. 

Damasco & Associates shall contemporaneously provide copies of all such filings to the 

Commission’s counsel of record. 

Damasco & Associates shall, at such times as it deems necessary to fulfill the tax 

obligations of the Fair Fund, request that the Commission’s counsel of record file with the 

Court a motion, supported by Damasco & Associates’ declaration of the amount of taxes due, 

Case 2:05-cv-01631-JCC Document 238 Filed 12/30/10 Page 2 of 4
ORDER CREATING FAIR FUND AND APPOINTING 

TAX ADMINISTRATOR 

Case No. C 05-01631-JCC 

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to transfer funds from the Fund on deposit with the Court to pay any tax obligations of the Fair 

Fund. 

Damasco & Associates shall be entitled to charge reasonable fees for tax compliance 

services and related expenses in accordance with its agreement with the Commission. 

Damasco & Associates shall, at such times as it deems appropriate, submit a declaration of 

fees and expenses to the Commission’s counsel of record for submission to the Court for 

approval and for payment from the Fair Fund. No fees or expenses may be paid absent the 

Court’s prior approval. 

At least ten (10) days before any motion to pay fees and expenses is to be filed with 

the Court, Damasco & Associates shall provide the Commission counsel of record with a draft 

of the supporting declaration for review. If the Commission has any corrections or objections 

to the declaration, Damasco & Associates and the Commission’s counsel shall attempt to 

resolve them on a consensual basis. If a consensual resolution is not reached, the Commission 

may submit with the motion any objections along with Damasco & Associates’ response 

thereto. 

 

Case 2:05-cv-01631-JCC Document 238 Filed 12/30/10 Page 3 of 4
ORDER CREATING FAIR FUND AND APPOINTING 

TAX ADMINISTRATOR 

Case No. C 05-01631-JCC 

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III. 

IT IS FURTHER ORDERED THAT the remaining balance of the Fair Fund, after 

payment of all taxes, penalties and fees described in Section II, above, shall be released by 

the Clerk to be distributed as part of the settlement fund authorized in In re Metropolitan 

Securities Litigation, which is pending in the U.S. District Court for the Eastern District of 

Washington (CV-04-0025-FVS). 

IT IS SO ORDERED. 

DATED this 30th day of December, 2010. 

A

John C. Coughenour 

UNITED STATES DISTRICT JUDGE 

Case 2:05-cv-01631-JCC Document 238 Filed 12/30/10 Page 4 of 4