Opinion ID: 4529168
Heading Depth: 2
Heading Rank: 3

Heading: The 2018 sanctions hearing

Text: After holding Klopp in civil contempt, the district court held a sanctions hearing. At the hearing, Klopp acknowledged $987,920 in profits from his business for the period between the effective date of the Consent Order, November 16, 2015, and April 27, 2018. Klopp argued that receiving profits from his business did not violate the Consent Order. But the district court rejected this argument because it “contradict[ed] [its] ruling at the contempt hearing.” J.A. 1041 n.8. The district court also rejected Klopp’s suggestion that the money he invested in the business should be deducted from that amount, seeing it as 6 evidence of Klopp’s operation of his mortgage business. The court similarly refused Klopp’s contention that his earnings accruing after the expiration of the Consent Order in November 2017 should not be considered, reasoning that Klopp should not be “shielded by the expiration date of an Order with which he never complied.” J.A. 1042. At the same time, the district court rejected the regulators’ position that all of Klopp’s earnings during this time should be disgorged. Instead, the district court deducted the $2,000 in monthly compensation that it believed Klopp was entitled to as humanresources manager, as well as Klopp’s tax withholdings, which reduced the profits to $526,796.36. The court ordered Klopp to disgorge that amount and expressly barred him from all involvement in the mortgage industry for another two years. Klopp timely appealed. 2