-1-

UNITED STATES DISTRICT COURT 

DISTRICT OF MARYLAND 

SOUTHERN DIVISION

In re SANCTUARY BELIZE LITIGATION No: 18-cv-3309-PJM

DECLARATION OF BRICK KANE IN SUPPORT OF MOTION FOR ORDER 

APPROVING SETTLEMENT AGREEMENT AND RELEASE BETWEEN RECEIVER 

AND LEE NOBMANN

I, Brick Kane declare:

1. I am the President of Robb Evans & Associates LLC (“Receiver”), the receiver in 

this action. This lawsuit was commenced on October 31, 2018 by the Federal Trade Commission 

(“FTC”) with its filing of a Complaint for Permanent Injunction and Other Equitable Relief 

(“Complaint”). The lawsuit named 17 entity defendants and seven individual defendants, in

addition to five relief defendants. The Court issued the Ex Parte Temporary Restraining Order 

With Asset Freeze, Writs Ne Exeat, Appointment of a Temporary Restraining Order and Other 

Equitable Relief, and Order to Show Cause Why a Preliminary Injunction Should Not Issue 

(“TRO”) on November 5, 2019. Under the TRO, the Receiver became temporary receiver over 

all entity defendants except for Atlantic International Bank, Ltd. (“AIBL”) and over the assets of 

Andris Pukke (“Pukke”) and Peter Baker (“Baker”) valued at $1,000 or more. The Court 

extended the duration of the TRO pursuant to an Extension of Temporary Restraining Order and 

Interim Preliminary Injunction on November 20, 2018. The FTC filed a motion to amend the 

Complaint and a proposed Amended Complaint for Permanent Injunction and Other Equitable 

Relief (“Amended Complaint”) on December 28, 2018 adding Michael Santos and Newport 

Case 1:18-cv-03309-PJM Document 886-2 Filed 03/24/20 Page 1 of 21
-2-

Land Group, LLC (“NLG”) as defendants. The Court granted the motion to amend on January 

11, 2019. On February 13, 2019 the Court entered a Stipulated Preliminary Injunction as to 

Defendants Rod Kazazi, Foundation Partners, Brandi Greenfield, BG Marketing LLC, Frank 

Costanzo, Deborah Connelly, Ecological Fox LLC, Michael Santos, Angela Chittenden, and 

Beach Bunny Holdings LLC (“Stipulated Preliminary Injunction”). Under the Stipulated 

Preliminary Injunction, the Receiver remained as receiver over the stipulating Receivership 

Entities BG Marketing, LLC, Ecological Fox, LLC, and Foundation Partners, and NLG was 

expressly added as a named Receivership Entity. On October 3, 2019, the Court issued the 

Preliminary Injunction as to Defendants Andris Pukke, Peter Baker, Luke Chadwick, John 

Usher, Certain Corporate Defendants, and the Estate of John Pukke (“Pukke Preliminary 

Injunction”). Under the Pukke Preliminary Injunction, the Receiver was named as permanent 

receiver over at least 16 Receivership Entities and over Pukke, Baker and Luke Chadwick’s 

(“Chadwick”) assets valued at $1,000 or more. On November 6, 2019, a Stipulated Order for 

Permanent Injunction and Monetary Judgment Against Defendants Frank Costanzo and 

Ecological Fox LLC and Relief Defendant Deborah Connelly (“Stipulated Judgment”) was 

entered. Among other things, the Receiver remained as permanent receiver over Ecological Fox 

LLC under the Stipulated Judgment. 

2. I have been one of the members of Robb Evans & Associates LLC primarily

responsible for the supervision, management and administration of the receivership estate, the 

Receiver’s taking possession and control of the business and operations of the Receivership 

Entities, as defined in the TRO, Stipulated Preliminary Injunction and Pukke Preliminary 

Injunction, the review and investigation of the business, operations and assets of the 

Receivership Entities and the individuals whose assets are under receivership, and the Receiver’s 

Case 1:18-cv-03309-PJM Document 886-2 Filed 03/24/20 Page 2 of 21
-3-

exercise of the other powers and duties set forth in the TRO, Stipulated Preliminary Injunction

and Pukke Preliminary Injunction. I have been involved in the Receiver’s ongoing review and 

detailed analysis of the Receivership Entities’ financial records, banking records, and other 

business records and files. I was personally involved in the preparation and review of the 

Receiver’s Report of Activities for the Period From November 6, 2018 to February 21, 2019 

(“First Report”) filed on February 22, 2019 and the Receiver’s Second Court Report Dated July 

2, 2019 (“Second Report”). I have personal knowledge of the matters set forth in this declaration 

or I have gained knowledge of these matters from my review of the documents which are 

pertinent to the transactions discussed herein or from my supervision and management of this 

receivership estate. If I were called upon to testify as to these matters I could and would 

competently testify thereto.

3. On January 14, 2020, the Court entered the Stipulated Order for Permanent 

Injunction and Monetary Judgment Against Defendant Michael Santos (“Santos Judgment”). 

Under the Santos Judgment, Michael Santos permanently transferred, assigned and relinquished 

to the Receiver, for liquidation and ultimate payment to the FTC, all rights Michael Santos may 

have to the real properties commonly described as: (a) 17085 Birch Hill Road, Riverside, 

California (“Riverside Property”); (b) 1807 Coastal Way, Costa Mesa, California (“Costa Mesa 

Property”); (c) 460 Lindberg Circle, Petaluma, California (“Petaluma Property”); (d) 14070 

Falling Leaf Road, Apple Valley, California (“Apple Valley Property”); and (e) 7862 Chase 

Avenue, Hesperia, California (“Hesperia Property”). (The real properties described are hereafter 

collectively referred to as the “Santos Properties.”) 

4. The Receiver researched the status of legal title to the Santos Properties. Legal 

title to the Riverside Property is held by Michael Santos and Carole Santos, husband and wife as 

Case 1:18-cv-03309-PJM Document 886-2 Filed 03/24/20 Page 3 of 21
-4-

community property. Legal title to the Costa Mesa Property is held by Michael Santos and 

Carole Santos, husband and wife as joint tenants. Legal title to the Petaluma Property is held by 

Carole Santos and Michael Santos, wife and husband as joint tenants. Legal title to the Apple 

Valley Property is held by Michael Santos and Carole Santos, husband and wife as joint tenants. 

Legal title to the Hesperia Property is held by Michael Santos and Carole Santos, husband and 

wife as joint tenants. Carole Santos’s interests in the Santos Properties are not expressly 

addressed or assigned to the Receiver in the Santos Judgment. 

5. Based on documents that have been produced to and analyzed by the Receiver 

and discussions with pertinent parties in interest, the Receiver has been advised that in January 

2019, Michael Santos and Carole Santos purportedly made, executed and delivered a $1,000,000 

promissory note (“Nobmann Promissory Note”) to Lee Nobmann (Nobmann) for value received. 

Nobmann contends that on or about May 3, 2017, Nobmann authorized Michael Santos and 

Carole Santos to apply the proceeds of a prior $250,000 loan from Nobmann to Michael Santos 

and Carole Santos to be used in the purchase of the Riverside Property and that Nobmann caused 

a wire transfer of $754,250 to be paid directly to Stewart Title of California, Inc., as the escrow 

officer handling the purchase of the Riverside Property by Michael Santos and Carole Santos. 

The promissory note is purportedly secured by a deed of trust on the Riverside Property which 

was recorded in Riverside County, California on January 11, 2019 (“Nobmann Deed of Trust”), 

the day that the Court extended the asset freeze in the FTC Action to Michael Santos.

6. Based on documents produced to and analyzed by the Receiver and discussions 

with pertinent parties in interest, the Receiver is advised that Michael Santos and Carole Santos 

purportedly made, executed and delivered a $240,000 promissory note to Geoff Richstone 

(“Richstone”) for value received in January 2019. The promissory note is purportedly secured 

Case 1:18-cv-03309-PJM Document 886-2 Filed 03/24/20 Page 4 of 21
-5-

by a deed of trust on the Costa Mesa Property which was recorded in Orange County, California 

on January 11, 2019. Michael Santos and Carole Santos purportedly made, executed and 

delivered a $375,000 promissory note to Richstone for value received in January 2019. The 

promissory note is purportedly secured by a deed of trust on the Petaluma Property which was 

recorded in Sonoma County, California on January 14, 2019. Michael Santos and Carole Santos 

purportedly made, executed and delivered a $125,000 promissory note to Richstone for value 

received in January 2019. The promissory note is purportedly secured by a deed of trust on the 

Apple Valley Property which was recorded in San Bernardino County, California on January 11, 

2019. Michael Santos and Carole Santos purportedly made, executed and delivered a $135,000 

promissory note to Richstone for value received in January 2019. The promissory note is 

purportedly secured by a deed of trust on the Hesperia Property which was recorded in San 

Bernardino County, California on January 11, 2019. (The four promissory notes in favor of 

Richstone are hereafter collectively referred to as the “Richstone Promissory Notes” and the 

deeds of trust which purportedly collateralize the Richstone Promissory Notes are hereafter 

collectively referred to as the “Richstone Deeds of Trust.”)

7. As set forth above, the Receiver has determined that the Nobmann Deed of Trust 

and the Richstone Deeds of Trust all were recorded at or about the time that the Court issued an 

asset freeze on Michael Santos. For this and other reasons, the Receiver: (a) disputes the validity 

of the Nobmann Promissory Note and Nobmann Deed of Trust; (b) disputes the validity of the 

Richstone Promissory Notes and Richstone Deeds of Trust; (c) contends that the Nobmann Deed 

of Trust and the Richstone Deeds of Trust may be avoided as fraudulent transfers; and (d) 

contends that the Receiver’s interest in the Santos Properties are superior to the Nobmann Deed 

of Trust and Richstone Deeds of Trust. 

Case 1:18-cv-03309-PJM Document 886-2 Filed 03/24/20 Page 5 of 21
-6-

8. The Receiver has preliminarily evaluated the market value of the Santos 

Properties and the extent to which the Santos Properties are encumbered by deeds of trust. Each 

of the Santos Properties is encumbered by a bona fide first lien in favor of an institutional lender 

and, in the Receiver’s judgment, not subject to challenge. If the Nobmann Deed of Trust and 

Richstone Deeds of Trust, each of which is in second lien position against the respective 

properties, are valid and enforceable, then the Santos Properties would have no equity for the 

receivership estate. The Receiver is advised that, under California law, Carole Santos appears to 

have a one-half interest in each of the Santos Properties taken as joint tenancy property and an 

undivided 100% interest in the Riverside Property, which was taken as community property. 

Michael Santos cannot unilaterally assign his community property interest in the Riverside 

Property without Carole Santos’s consent, rendering the assignment to the Receiver problematic 

unless the Receiver can successfully challenge her interest, obtain her consent or argue that the 

assignment operates in effect as a judgment creditor’s execution levy. Therefore, Carole 

Santos’s interest in the Santos Properties do not appear resolved by the Santos Judgment. Unless 

her interest can be successfully challenged, the Receiver would have to seek and obtain an order 

compelling the sale of the properties, and the Receiver would realize only 50% of the net equity 

upon sale. While the Riverside Property has the largest potential equity, in addition to the fact 

that it is held in community property, it also is subject to a long-term lease/purchase option 

through 2033, which further hinders the Receiver’s ability to promptly monetize this asset. 

Several of the other Santos Properties are or will soon be vacant, further impeding the Receiver’s 

ability to service debt and preserve equity in the properties. 

9. Based on the Receiver’s preliminary valuations, assuming that: (a) the second 

priority Nobmann Deed of Trust and Richstone Deeds of Trust can be set aside, which will 

Case 1:18-cv-03309-PJM Document 886-2 Filed 03/24/20 Page 6 of 21
-7-

require a successful legal challenge; (b) Carole Santos preserves a 50% interest in the Santos 

Properties; and (c) the Receiver can force a prompt sale of the Santos Properties, including the 

Riverside Property, despite the long term lease/purchase option on that property, the Receiver 

estimates that gross equity in the real estate for the receivership estate, not including the costs of 

sale which typically are in the 8% range, would be approximately $500,000.

10. The Receiver and Nobmann have negotiated and executed a comprehensive 

Settlement Agreement, a copy of which is attached as Exhibit 1 hereto. The key provisions of 

the Settlement Agreement are: (a) in full satisfaction of all rights, claims, interests and demands 

the Receiver and Nobmann may have against one another, and in consideration for the 

Receiver’s assignment to Nobmann or his assignee of all rights the Receiver may have in the 

Santos Properties, Nobmann shall pay to the Receiver the sum of $350,000. This amount has 

already been paid to and is being held by the Receiver, subject to the Court’s approval of the 

Settlement Agreement; (b) as between the Receiver and Nobmann, the Receiver is entitled to 

the rents, issues and profits from the Santos Properties prior to the Court’s approval of the 

settlement and Nobmann is entitled to the rents, issues and profits from the Santos Properties 

thereafter; (c) the Receiver makes no representations and warranties of any kind with respect to 

the Santos Properties; (d) general and mutual releases are entered into between Nobmann and 

the Receiver; and (e) the Settlement Agreement becomes effective upon Court approval and 

provided that the FTC does not file written opposition to this Motion. The Receiver understands 

that the FTC supports the Settlement Agreement. 

11. I believe that the settlement of the dispute between the Receiver and Nobmann is 

a very favorable resolution for the estate and should be approved. While the Receiver believes 

that it has a legitimate argument that the Nobmann Deed of Trust and the Richstone Deeds of 

Case 1:18-cv-03309-PJM Document 886-2 Filed 03/24/20 Page 7 of 21
-8-

Trust may constitute voidable fraudulent transfers pursuant to the California Uniform Voidable 

Transactions Act, this position is not without doubt in light of Nobmann’s contention and 

Richstone’s contention that value was provided by them to Michael Santos and Carole Santos in 

exchange for the subject deeds of trust. As set out above, if the Nobmann Deed of Trust and

Richstone Deeds of Trust are valid and enforceable, then the Santos Properties would have no 

equity for the receivership estate. Even assuming that the Nobmann Deed of Trust and 

Richstone Deeds of Trust can be successfully avoided as fraudulent transfers or under some other 

theory, Carole Santos appears to have a one-half interest in each of the Santos Properties held in 

joint tenancy and an undivided community property interest in the Riverside Property under 

applicable California law and her interest is not resolved by the Santos Judgment. Unless her 

interest can be successfully challenged, the Receiver would have to seek and obtain an order 

compelling the sale of the properties, and the Receiver would realize only 50% of the net equity 

upon sale. In addition to its problematic status as community property, the Riverside Property is 

subject to a long-term lease/purchase option through 2033, which further hinders the Receiver’s 

ability to monetize this asset, which has the largest amount of potential equity of all of the Santos 

Properties. Several of the other Santos Properties are or will soon be vacant, further impeding 

the Receiver’s ability to service debt and preserve equity in the properties. All of these factors 

dictate in favor of the Receiver promptly monetizing its interest in the Santos Properties for the 

benefit of the FTC for the purpose of providing consumer redress under Section VI.E of the 

Santos Judgment. The immediate recovery of $350,000 is an excellent result when considering 

the uncertainty, time and expense surrounding litigation of the various disputes with Nobmann, 

Richstone, Carole Santos and the tenant of the Riverside Property which may be required. 

Assuming a successful challenge could be mounted to the Nobmann Deed of Trust and 

Case 1:18-cv-03309-PJM Document 886-2 Filed 03/24/20 Page 8 of 21
Case 1:18-cv-03309-PJM Document 886-2 Filed 03/24/20 Page 9 of 21

Richstone Deeds of Trust, Carole Santos's interest remained in effect, and all of the Santos 

Properties could be promptly liquidated, including the Riverside Property despite it being subject 

to a long term lease/purchase option through 2033, net equity for the receivership estate for 

ultimate disposition to the FTC would not generate significantly more than this amount. 

I declare under penalty of perjury that the foregoing is true and correct and that this 

declaration was executed on March.J2, 2020 at Alhambra, California. 

~ BRICK KANE 

!6980717vl 

-9-
EXHIBIT 1 

Case 1:18-cv-03309-PJM Document 886-2 Filed 03/24/20 Page 10 of 21
Case 1:18-cv-03309-PJM Document 886-2 Filed 03/24/20 Page 11 of 21

SETTLEMENT AGREEMENT AND RELEASE 

This Settlement Agreement and Release ("Agreement") is made as of this//>'hday of 

March, 2020, by and between Robb Evans & Associates LLC ("Receiver"), as Receiver over 

Ecological Fox, LLC and other Receivership Entities as more particularly described and defined 

below, and over the assets of Andris Pukke ("Pukke"), Peter Baker ("Baker") and Luke 

Chadwick ("Chadwick"), as more particularly described below, on the one hand, and Lee 

Nobmann ("Nobmann"), on the other, in reference to and in consideration of the following: 

RECITALS 

A. The Receiver represents that the Receiver was appointed Temporary Receiver 

over the Receivership Entities (as defined in and pursuant to the Ex Parte Temporary Restraining 

Order With Asset Freeze, Writs Ne Exeat, Appointment of a Temporary Receiver, and Other 

Equitable Relief, and Order to Show Cause Why a Preliminary Injunction Should Not Issue 

("TRO")) entered on November 5, 2018 in the case of Federal Trade Commission v. Ecological 

Fox, LLC et al. Case No. 18-cv-3309-PJM ("FTC Action"), in the United States District Court, 

District of Maryland ("District Court"). Pursuant to the TRO, the Receiver also was appointed 

Temporary Receiver over the assets of Pukke and Baker valued by the Receiver at $1,000.00 or 

more. In the FTC Action, the Federal Trade Commission ("FTC") alleged that the Defendants 

violated various provisions of the Federal Trade Commission Act ("FTC Act") and the 

Telemarketing and Consumer Fraud and Abuse Prevention Act ("Telemarketing Act") in 

connection with a real estate development in Belize, known as, among other things, "Sanctuary 

Belize" and referred to herein by that name. The FTC alleges that the Defendants used false 

promises and deceptive telemarketing, sale and development practices in connection with the 

sale of lots in Sanctuary Belize. The FTC Action has been re-designated as In re Sanctuary 

Belize Litigation. "Receivership Entities," as defined in the TRO, means the Corporate 

Defendants (as defined therein), except for Atlantic International Bank, Ltd. ("AIBL"), including 

nonparty subsidiaries, affiliates, successors, and assigns, as well as any other entity that is 

located at, registered to, or operated from 3333 Michelson Drive, Suite 500, Irvine, California 

and assists, facilitates, or otherwise conducts business related to the acts identified in the 

Findings of Fact in the TRO, and is owned or controlled by any Defendant; or Assets, as defined 

in the TRO, that are otherwise in the receivership and that are corporations or other legal entities. 

The TRO remained in effect pursuant to the Extension of Temporary Restraining Order and 

Interim Preliminary Injunction entered November 20, 2018. 

B. The Receiver represents that the Receiver became permanent receiver over BG 

Marketing, LLC, Ecological Fox, LLC, and Foundation Partners and each of their subsidiaries, 

affiliates, successors and assigns pursuant to the Stipulated Preliminary Injunction as to 

Defendants Rod Kazazi, Foundation Partners, Brandi Greenfield, BG Marketing LLC, Frank 

Costanzo, Deborah Connelly, Ecological Fox, LLC, Michael Santos, Angela Chittenden and 

Beach Bunny Holdings LLC ("Stipulated Preliminary Injunction") entered on February 9, 2019. 

C. The Receiver represents that pursuant to the Preliminary Injunction as to 

Defendants Andris Pukke, Peter Baker, Luke Chadwick, John Usher, Certain Corporate 

Defendants, and the Estate of John Pukke ("Preliminary Injunction") entered October 3, 2019, 

the Receiver became permanent receiver over Global Property Alliance, Inc., Sittee River 

-1-
Case 1:18-cv-03309-PJM Document 886-2 Filed 03/24/20 Page 12 of 21

Wildlife Reserve, Buy Belize, LLC, Buy International, Inc., Foundation Development 

Management, Inc., Eco-Futures Development, Eco-Futures Belize, Limited, Power Haus 

Marketing, Newport Land Group LLC, Sanctuary Belize Property Owners' Association, Prodigy 

Management Group LLC, Belize Real Estate Affiliates LLC, Exotic Investor LLC, and Southern 

Belize Realty, LLC, and each of their subsidiaries, affiliates, successors and assigns, together 

with 2729 Bristol LLC, 3905 Marcus, LLC, as well as any other entity that is located at, 

registered to, or operated from 3333 Michelson Drive, Suite 500, Irvine, California and assists, 

facilitates, or otherwise conducts business related to the sale of real estate in Belize; assists, 

facilitates, or otherwise conducts business related to the acts identified in the Findings of Fact in 

the Preliminary Injunction, and is owned or controlled by any Defendant; or are identified as 

Assets, as defined in the Preliminary Injunction, that are otherwise in the receivership and that 

are corporations or other legal entities. Pursuant to the Preliminary Injunction, the Receiver was 

also appointed as Receiver over the assets of Pukke, Baker and Chadwick valued by the Receiver 

at $1,000.00 or more. 

D. The Receiver represents that pursuant to the Stipulated Order for Permanent 

Injunction and Monetary Judgment Against Defendant Michael Santos ("Santos Judgment") 

entered January 14, 2020, Michael Santos permanently transferred, assigned and relinquished to 

the Receiver, for liquidation and ultimate payment to the FTC, all rights Michael Santos may 

have to the real properties commonly described as: (a) 17085 Birch Hill Road, Riverside, 

California ("Riverside Property"); (b) 1807 Coastal Way, Costa Mesa, California ("Costa Mesa 

Property"); (c) 460 Lindberg Circle, Petaluma, California ("Petaluma Property"); (d) 14070 

Falling Leaf Road, Apple Valley, California ("Apple Valley Property"); and (e) 7862 Chase 

A venue, Hesperia, California ("Hesperia Property"). (The real properties described in this 

Recital D are hereafter collectively referred to as the "Santos Properties.") 

E. Legal title to the Riverside Property is held by Michael Santos and Carole Santos, 

husband and wife as community property. Legal title to the Costa Mesa Property is held by 

Michael Santos and Carole Santos, husband and wife as joint tenants. Legal title to the Petaluma 

Property is held by Carole Santos and Michael Santos, wife and husband as joint tenants. Legal 

title to the Apple Valley Property is held by Michael Santos and Carole Santos, husband and 

wife as joint tenants. Legal title to the Hesperia Property is held by Michael Santos and Carole 

Santos, husband and wife as joint tenants. 

F. In January 2019, Michael Santos and Carole Santos purportedly made, executed 

and delivered a $1,000,000 promissory note ("Nobmann Promissory Note") to Lee Nobmann for 

value received. Nobmann contends that on or about May 3, 2017, Nobmann authorized Michael 

Santos and Carole Santos to apply the proceeds of a prior $250,000 loan from Nobmann to 

Michael Santos and Carole Santos to be used in the purchase of the Riverside Property and that 

Nobmann caused a wire transfer of$754,250 to be paid directly to Stewart Title of California, 

Inc., as the escrow officer handling the purchase of the Riverside Property by Michael Santos 

and Carole Santos. The Nobman Promissory Note is purportedly secured by a deed of trust on 

the Riverside Property which was recorded in Riverside County, California on January 11, 2019 

("Nobmann Deed of Trust"). 

G. Michael Santos and Carole Santos purportedly made, executed and delivered a 

$240,000 promissory rtote to Geoff Richstone ("Richstone") for value received in January 2019. 

-2-
Case 1:18-cv-03309-PJM Document 886-2 Filed 03/24/20 Page 13 of 21

The promissory note is purportedly secured by a deed of trust on the Costa Mesa Property which 

was recorded in Orange County, California on January 11, 2019. 

H. Michael Santos and Carole Santos purportedly made, executed and delivered a 

$375,000 promissory note to Richstone for value received in January 2019. The promissory note 

is purportedly secured by a deed of trust on the Petaluma Property which was recorded in 

Sonoma County, California on January 14, 2019. 

I. Michael Santos and Carole Santos purportedly made, executed and delivered a 

$125,000 promissory note to Richstone for value received in January 2019. The promissory note 

is purportedly secured by a deed of trust on the Apple Valley Property which was recorded in 

San Bernardino County, California on January 11, 2019. 

J. Michael Santos and Carole Santos purportedly made, executed and delivered a 

$135,000 promissory note to Richstone for value received in January 2019. The promissory note 

is purportedly secured by a deed of trust on the Hesperia Property which was recorded in San 

Bernardino County, California on January 11, 2019. (The promissory notes described in Recitals 

G, H, I and J are hereafter collectively referred to as the "Richstone Promissory Notes" and the 

deeds of trust described in Recitals G, H, I and J are hereafter collectively referred to as the 

"Richstone Deeds of Trust.") 

K. Among other contentions, the Receiver: (a) disputes the validity of the Nobmann 

Promissory Note and Nobmann Deed of Trust; (b) disputes the validity of the Richstone 

Promissory Notes and Richstone Deeds of Trust; (c) contends that the Nobmann Deed of Trust 

and the Richstone Deeds of Trust may be avoided as fraudulent transfers; and ( d) contends that 

the Receiver's interest in the Santos Properties are superior to the Nobmann Deed of Trust and 

Richstone Deeds of Trust. 

L. The parties to this Agreement desire to resolve all disputes and differences among 

them concerning the events and circumstances described in these Recitals, including, without 

limitation, all disputes and differences that may pertain in any way to the FTC Action, the 

receivership estate created in the FTC Action, the Santos Judgment, the Santos Properties, the 

Nobmann Promissory Note, the Nobmann Deed of Trust, the Richstone Promissory Notes and 

the Richstone Deeds of Trust. 

NOW THEREFORE, in reference to the foregoing and for good and valuable 

consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto do 

stipulate and agree as follows: 

AGREEMENT 

1. Recitals. The Recitals set forth above are true and correct according to 

their terms and are incorporated into and form a part of this Agreement. 

2. Settlement Payment. In full settlement of all rights, claims, interests and 

demands that either party to this Agreement may have against the other, and in consideration of 

the assignment provided by the Receiver to Nobmann as set forth in paragraph 3, below, 

-3-
Case 1:18-cv-03309-PJM Document 886-2 Filed 03/24/20 Page 14 of 21

concurrently with the execution of this Agreement Nobmann shall pay to the Receiver by 

cashier's check or wire transfer the sum of $350,000 ("Settlement Payment"). After the Receiver 

confirms the Settlement Payment has cleared, the Receiver will provide access to Nobmann or 

his agents to visually inspect the Santos Properties, insofar as permitted under any of the 

operative lease agreements which remain in force, so that Nobmann may ensure that the Santos 

Properties are being maintained. As to any of the Santos Properties that are vacant, the Receiver 

authorizes Nobmann to secure any locks, shut any open windows, and turn off any faucets that 

are running water. Nobmann or his agents may conduct such visual inspections only with the 

Receiver being given the opportunity to be present at the time of such inspections. In the event 

that the District Court in the FTC Action does not approve this Agreement, the Receiver shall 

immediately return the Settlement Payment to Nobmann and, in such event, the parties to this 

Agreement shall have all of their respective rights, claims, interests and demands that existed 

prior to the execution of this Agreement. 

3. Assignment of Receiver's Rights in the Santos Properties. Upon the 

Effective Date of this Agreement, as defined below in paragraph 15, the Receiver hereby 

transfers, assigns and relinquishes to Nobmann or his assignee all rights it may have in the 

Santos Properties which were created pursuant to the Santos Judgment, without any 

representations or warranties of any kind. 

4. Rights to Rental Income. As between the parties to this Agreement, until 

the Effective Date of this Agreement, the Receiver has the sole right in and to all rents, issues 

and profits generated by any of the Santos Properties. As between the parties to this Agreement, 

all rents, issues and profits generated by any of the Santos Properties for the period prior to the 

Effective Date shall remain property of the receivership estate. All rents, issues and profits 

generated by any of the Santos Properties for the period prior to the Effective Date and paid to 

Nobmann, if any, shall be turned over by Nobmann to the Receiver. Nobmann has no obligation 

to refund any money paid by Michael Santos or Carole Santos to Nobmann prior to the date of 

the Stipulated Preliminary Injunction. All rents, issues and profits generated by any of the 

Santos Properties for the period from and after the Effective Date and paid to the Receiver, if 

any, shall be turned over by the Receiver to Nobmann. Rents, issues and profits shall be prorated 

as of the Effective Date. 

5. No Obligation to Pay Secured Debt. As between the parties to this 

Agreement, until the Effective Date, the Receiver has the sole power to determine whether or not 

any payments against indebtedness secured by any of the Santos Properties shall be paid from 

the rents, issues and profits of any of the Santos Properties or from any other sources. 

6. Insurance. The Receiver shall maintain insurance on the Santos Properties 

for a period from the date of this Agreement through and including five business days following 

notice by the Receiver to Nobmann that the Agreement has become effective pursuant to 

paragraph 15 hereto. 

7. No Representations or Warranties by the Receiver With Respect to the 

Santos Properties. The Receiver makes no representations or warranties with respect to the 

Santos Properties. Without limiting the generality of the foregoing sentence, the Receiver does 

not represent or warrant: (a) whether the assignment granted to the Receiver in the Santos 

-4-
Case 1:18-cv-03309-PJM Document 886-2 Filed 03/24/20 Page 15 of 21

Judgment of all of Michael Santos's rights in the Santos Properties in any way affects Carole 

Santos' s interest in the Santos Properties; (b) the validity and enforceability, or lack of validity 

and enforceability, of the Nobmann Promissory Note, the Nobmann Deed of Trust, the Richstone 

Promissory Notes and the Richstone Deeds of Trust; (c) the status of and/or enforceability of any 

lease, tenancy, purchase option and/or any other contract or agreement which exists or may exist 

as to any of the Santos Properties ("Property Agreement"), including without limitation whether 

such Property Agreement is in default, the status of payment under any such Property 

Agreement, and the status of occupancy under any such Property Agreement; ( d) the status 

and/or enforceability of any liens which encumber or may encumber any of the Santos 

Properties, including without limitation the payment status of any obligation secured by a deed 

of trust which may encumber any of the Santos Properties, whether any of the Santos Properties 

are in foreclosure, and the status ofreal property tax payments; ( e) the value of any of the Santos 

Properties; (f) the extent to which any of the Santos Properties have equity over and above the 

liens against such property; (g) the nature, quality or condition of any of the Santos Properties; 

(h) the compliance of or by any of the Santos Properties or the operation of the Santos Properties 

with any laws, rules, ordinances or regulations of any applicable governmental authority or body; 

(i) the habitability, merchantability, marketability, profitability or fitness for a particular purpose 

of any of the Santos Properties; G) the manner or quality of construction or materials 

incorporated into any of the Santos Properties; (k) the manner, quality, state ofrepair or lack of 

repair of any of the Santos Properties; (I) the environmental condition of any of the Santos 

Properties, including without limitation whether there exists asbestos, asbestos containing 

materials or lead-based paint on or within any of the Santos Properties; and (m) the efficacy of 

Nobmann's plan to use this Agreement in an effort to recoup money owed on the Nobmann 

Promissory Note and the Settlement Payment from Michael Santos, Carole Santos, and/or 

Richstone. 

8. General Release of Receiver and Receivership Estate. Excepting all of the 

obligations imposed or created by this Agreement and except as otherwise expressly set forth in 

this Agreement, Nobmann does hereby forever relieve, release and discharge the Receiver, in its 

corporate capacity and as Receiver in the FTC Action, and the receivership estate created in the 

FTC Action, and the Receiver's officers, directors, shareholders, members, managers, 

employees, deputies, agents, associates, partners, past or present attorneys, representatives and 

administrators,jointly and severally, from any and all lawsuits, debts, losses, claims, liens, 

liabilities, demands, obligations, promises, acts, agreements, costs, expenses, attorneys' fees, 

damages, actions and causes of action, of whatever kind or nature, whether known or unknown, 

suspected or unsuspected, contingent or fixed, arising from the beginning of time through the 

Effective Date, that each of them had, has or may have against the parties being released in this 

paragraph, which arise out of, relate to, or pertain in any way to the facts or occurrences set forth 

in the Recitals herein, the FTC Action, the receivership estate created in the FTC Action, the 

Santos Judgment, the Santos Properties, the Nobmann Promissory Note, the Nobmann Deed of 

Trust, the Richstone Promissory Notes and the Richstone Deeds of Trust (individually and 

collectively the "Nobmann Claims"). 

9. Effect of General Release ofNobmann Claims. Nobmann expressly 

waives any and all rights under Section 1542 of the Civil Code of the State of California which 

provides as follows: 

-5-
Case 1:18-cv-03309-PJM Document 886-2 Filed 03/24/20 Page 16 of 21

A general release does not extend to claims that the creditor 

or releasing party does not know or suspect to exist in his or 

her favor at the time of executing the release and that, if 

known by him or her, would have materially affected his or 

her settlement with the debtor or released party. 

Nobmann expressly waives and releases any rights or benefits that he may have under Section 

1542 of the Civil Code of the State of California, and any similar statute, code, law or regulation 

of any state, territory, commonwealth or possession of the United States, or the United States, to 

the full extent that it may waive all such rights and benefits pertaining to the Nobmann Claims. 

Nobmann acknowledges that he is aware that he may hereafter discover claims presently 

unknown or unsuspected, or facts in addition to or different from those that they now know or 

believe to be true pertaining to the Nobmann Claims. Nevertheless, it is the intention of 

Nobmann, through this Agreement, to fully, finally and forever release all of the Nobmann 

Claims. The releases herein given shall be and remain in effect as a full and complete release of 

the Nobmann Claims notwithstanding the discovery or existence of any such additional or 

different claims or facts relative thereto. 

10. No Assignment ofNobmann Claims. Nobmann represents and warrants 

that he is the sole and lawful owner of all legal or beneficial right, title and interest in and to each 

of the claims released herein and that he has not heretofore assigned, hypothecated or transferred, 

or purported to assign, hypothecate or transfer, to any individual, partnership, corporation, firm, 

trust, estate or entity, any of the claims released herein, in whole or in part. Nobmann hereby 

agrees to indemnify, defend and hold harmless the Receiver and the receivership estate from and 

against all claims based upon or arising out of or in connection with any assignment, 

hypothecation or transfer or purported assignment, hypothecation or transfer of any of the 

Nobmann Claims. 

11. General Release ofNobmann. Excepting all of the obligations imposed or 

created by this Agreement, and except as otherwise expressly set forth in this Agreement, the 

Receiver does hereby forever relieve, release and discharge Nobmann, and each of his agents, 

associates, past or present attorneys, representatives and administrators, jointly and severally, 

from any and all lawsuits, debts, losses, claims, liens, liabilities, demands, obligations, promises, 

acts, agreements, costs, expenses, attorneys' fees, damages, actions and causes of action, of 

whatever kind or nature, whether known or unknown, suspected or unsuspected, contingent or 

fixed, arising from the beginning of time through the Effective Date, that the Receiver had, has 

or may have against the parties being released in this paragraph, which arise out of, relate to, or 

pertain in any way to the facts or occurrences set forth in the Recitals herein, the FTC Action, the 

receivership estate created in the FTC Action, the Santos Judgment, the Santos Properties, the 

Nobmann Promissory Note, the Nobmann Deed of Trust, the Richstone Promissory Notes and 

the Richstone Deeds of Trust (individually and collectively the "Receiver Claims"). 

12. Effect of General Release of the Receiver Claims. The Receiver expressly 

waives any and all rights under Section 1542 of the Civil Code of the State of California which 

provides as follows: 

-6-
Case 1:18-cv-03309-PJM Document 886-2 Filed 03/24/20 Page 17 of 21

A general release does not extend to claims that the creditor 

or releasing party does not know or suspect to exist in his or 

her favor at the time of executing the release and that, if 

known by him or her, would have materially affected his or 

her settlement with the debtor or released party. 

The Receiver expressly waives and releases any rights or benefits that it may have under Section 

1542 of the Civil Code of the State of California, and any similar statute, code, law or regulation 

of any state, territory, commonwealth or possession of the United States, or the United States, to 

the full extent that it may waive all such rights and benefits pertaining to the Receiver Claims. 

The Receiver acknowledges that it is aware that it may hereafter discover claims presently 

unknown or unsuspected, or facts in addition to or different from those that it now knows or 

believes to be true pertaining to the Receiver Claims. Nevertheless, it is the intention of the 

Receiver through this Agreement, to fully, finally and forever release all of the Receiver Claims. 

The releases herein given shall be and remain in effect as a full and complete release of the 

Receiver Claims notwithstanding the discovery or existence of any such additional or different 

claims or facts relative thereto. 

13. No Assignment of Receiver CJaims. The Receiver represents and 

warrants that the Receiver is the sole and lawful owner of all right, title and interest in and to 

each of the claims released herein and it has not heretofore assigned, hypothecated or transferred, 

or purported to assign, hypothecate or transfer, to any individual, partnership, corporation, firm, 

estate or entity, any of the claims released herein. The Receiver hereby agrees to indemnify, 

defend and hold harmless Nobmann from and against all claims based upon or arising out of or 

in connection with any assignment or transfer, hypothecation or purported assignment, 

hypothecation or transfer of any of the Receiver Claims. 

14. District Comt Approval. Within a reasonable time after the execution of 

this Agreement by all parties hereto, the Receiver shall bring a motion on regular notice in the 

FTC Action seeking an order approving this Agreement. The Receiver shall provide proper 

notice to the FTC of such motion. If the FTC files written opposition to the District Court's 

approval of this Agreement, the Receiver will take the motion off calendar and return the 

Settlement Payment to Nobmann. In such event, the parties to this Agreement shall have all of 

their respective rights, claims, interests and demands that existed prior to the execution of this 

Agreement. 

15. Effective Date of the Agreement. The effective date of this Agreement 

(the "Effective Date") shall be the date on which the District Court in the FTC Action enters an 

order approving this Agreement and providing that the assignment set forth in paragraph 3 of this 

Agreement may be made pursuant to the terms of the Santos Judgment. 

16. Further Assurances and Documents. The parties agree that they shall 

execute and deliver such additional documents or instruments necessary or appropriate in order 

to effectuate the terms and provisions of this Agreement as may be reasonably requested, 

provided however that the expense of preparing such additional documents and instruments shall 

be the responsibility of the party requesting them. 

-7-
Case 1:18-cv-03309-PJM Document 886-2 Filed 03/24/20 Page 18 of 21

17. Time is of the Essence. Time is of the essence with respect to any act, 

payment or performance under this Agreement. 

18. Default. In the event that any party to this Agreement defaults in the 

payment or performance of their obligations hereunder, then the non-defaulting party may 

exercise any and all rights and remedies available to it at law or in equity. 

19. Attorney Fees. In the event of any default in payment or performance 

hereunder, if a party employs an attorney to bring suit on account of such default or to otherwise 

enforce such payment or performance, the party not in breach shall be entitled to be reimbursed 

for all reasonable attorney fees and costs incurred, including without limitation those incurred in 

each and every action, suit or proceeding, including any and all appeals and petitions therefrom. 

20. Notices. All notices and other communications which are required or may 

be given hereunder shall be in writing and shall be duly given if mailed by U.S. Mail and sent by 

overnight courier, postage prepaid and addressed to the other party at the address set forth herein: 

lfto the Receiver: Robb Evans & Associates LLC 

11450 Sheldon Street 

Sun Valley, CA 91352-1121 

Attention: Brick Kane 

with a copy to: Barnes & Thornburg LLP 

2029 Century Park East, Suite 300 

Los Angeles, CA 90067 

Attention: Gary Owen Caris, Esq. 

lfto Nobmann: Lee Nobmann 

855 Lakeville St. Suite 200 

Petaluma, CA 94952 

with a copy to: Hedstrom & Coopersmith, LLP 

855 Lakeville Street, Suite 200-E 

Petaluma, CA 94952 

Attention: Marc Coopersmith, Esq. 

21. No Waiver. No failure or delay on the part of any party to this Agreement 

in the exercise of any right, power, or privilege hereunder, shall operate as a waiver thereof, and 

no single or partial exercise of any such right, power, or privilege shall preclude a further 

exercise thereof or of any other right, power or privilege. 

22. Opportunity for Consultation with Counsel. Each of the parties hereto has 

had an opportunity to consult with legal counsel of their own choosing with respect to the 

advisability of entering into this Agreement and granting the releases provided herein, and with 

respect to the advisability of executing this Agreement, and prior to its execution, each of the 

parties hereto had the opportunity to make any desired change. Each of the parties and their 

-8-
Case 1:18-cv-03309-PJM Document 886-2 Filed 03/24/20 Page 19 of 21

legal counsel and other advisors have made such investigation of the facts pertaining to the 

Agreement, and all matters pertaining thereto, as they deem necessary. This Agreement has been 

carefully read by, the contents hereof are known by, and it has been signed freely by each person 

executing this Agreement. 

23. Neutral Interpretation. This Agreement is the product of the negotiations 

between the parties, and in the interpretation and/or enforcement hereof is not to be interpreted 

more strongly in favor of one party or the other. 

24. Representations and Warranties. Each of the parties hereto hereby 

represents and warrants to one another and covenants and agrees with one another as follows: 

(a) Each party executing this Agreement has the full legal right, power 

and authority to enter into and perform this Agreement. This Agreement is a valid and binding 

obligation of each of the parties hereto, and enforceable against each of them in accordance with 

its terms. Each person executing this Agreement in a representative capacity has been duly 

authorized to do so by all appropriate actions. 

(b) Except as expressly stated in this Agreement, no party hereto nor 

any other person has made any statement or representation to any party to this Agreement 

regarding the facts relied upon by such party in entering into this Agreement, and no party hereto 

has relied upon any statement, representation or promise of any other person or entity in 

executing this Agreement except as expressly stated in this Agreement. 

( c) The terms of this Agreement are contractual and not a mere recital. 

25. Integration/Modification in Writing. This Agreement constitutes the 

entire agreement between the parties hereto with respect to the subject matter hereof, and 

supersedes all other agreements, oral or written, between the parties hereto with respect to the 

subject matter hereof. No covenants, agreements, representations or warranties of any kind 

whatsoever have been made by any party hereto, except as specifically set forth in this 

Agreement. No claim of waiver, modification, consent, or acquiescence with respect to any 

provision of this Agreement shall be made against any party hereto, except upon the basis of a 

written instrument executed by or on behalf of such party. 

26. Survival. All covenants, representations, warranties and agreements 

contained in this Agreement shall survive the execution of this Agreement by the parties hereto, 

the delivery of documents and any performance on account of the obligations set forth herein. 

27. Successors and Assigns. The provisions of this Agreement shall be 

binding upon and inure to the benefit of each of the parties hereto, and their respective 

successors-in-interest and assigns. 

28. Governing Law and Jurisdiction. This Agreement has been entered into 

by the parties in the State of California. This Agreement shall be governed by and construed in 

accordance with the laws of the State of California. Any dispute arising out of or relating to the 

interpretation and enforcement of this Agreement shall be resolved exclusively by the District 

Court in the FTC Action. 

-9-
Case 1:18-cv-03309-PJM Document 886-2 Filed 03/24/20 Page 20 of 21

29. Headings. The headings of paragraphs of this Agreement are inserted 

solely for the convenience of reference and are not a part of and are not intended to govern, limit 

or aid in the construction or interpretation of any term or provision hereof. 

30. Counterparts. This Agreement may be executed and delivered by 

electronic transmission in any number of counterparts, each of which, when executed and 

delivered, shall be original, and all of which together shall constitute the same Agreement. 

31. No Unnamed Third Party Beneficiaries. There are no unnamed third party 

beneficiaries to this Agreement. Without limiting the generality of the preceding sentence, this 

Agreement shall not affect any of the Receiver's rights and claims against any person or entity 

which is not a party to this Agreement. 

Dated: Marct{./ 2020 

Dated: March_, 2020 

l6754756vl 

ROBB EV ANS & ASSOCIATES LLC, 

as Receiver for Ecological Fox, LLC, et al. 

By: __________ _ 

Brick Kane 

Its: President 
Case 1:18-cv-03309-PJM Document 886-2 Filed 03/24/20 Page 21 of 21

29. Headings. The headings of paragraphs of this Agreement are inserted 

solely for the convenience of reference and are not a part of and are not intended to govern, limit 

or aid in the construction or interpretation of any term or provision hereof. 

30. Counterparts. This Agreement may be executed and delivered by 

electronic transmission in any number of counterparts, each of which, when executed and 

delivered, shall be original, and all of which together shall constitute the same Agreement. 

31. No Unnamed Third Party Beneficiaries. There are no unnamed third party 

beneficiaries to this Agreement. Without limiting the generality of the preceding sentence, this 

Agreement shall not affect any of the Receiver's rights and claims against any person or entity 

which is not a party to this Agreement. 

Dated: March_, 2020 

Dated: MarchJ.6 2020 -' 

16754756vl 

Lee Nobmann 

ROBB EV ANS & ASSOCIATES LLC, 

as Receiver for Ecological Fox, LLC, et al. 

b~ Brick Kane 

Its: President 

-10-