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

Heading: The 2017 civil contempt hearing

Text: When the regulators learned of Klopp’s actions, they moved to hold him in contempt. The district court held a contempt hearing in August 2017. At the hearing, regulators presented documentary evidence to support their assertions that Klopp had violated the order. Klopp took the stand in defense and made several admissions. He acknowledged that he never uploaded the Consent Order to the Registry. Klopp similarly admitted to continuing to deal with third-party settlement 5 services. E.g., J.A. 146–47 (“Q: But the fact is that you were asking for a loan—an interest rate concession on a particular consumer loan; isn’t that right? A: It appears that way.”). And he admitted that he never notified regulators of his new office in California. Klopp also described his employment agreement with Peoples Bank & Trust. The agreement compensated Klopp based on the greater of a $2,000 monthly salary or certain profits earned by his brokerage branches. Between January 2016 and March 2017, the business generated an estimated $765,000 in profit, $700,000 of which Klopp allocated to his own earnings. Based on this evidence, the district court found Klopp violated both the activity restrictions and the reporting requirements of the Consent Order. For the activity restrictions, the court found that he impermissibly managed the business, profited from the mortgage industry, and communicated with settlement servicers. And the district court found that Klopp violated the reporting restrictions by failing to upload the Consent Order to the Registry and not informing the regulators of his California activities.