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Securities and Exchange Commission v. Paul A. Bilzerian

October 3, 2011

SECURITIES AND EXCHANGE COMMISSION, PLAINTIFF,
v.
PAUL A. BILZERIAN, ET AL., DEFENDANTS



The opinion of the court was delivered by: Royce C. Lamberth, United States District Judge,

MEMORANDUM OPINION

I.INTRODUCTION

Before the Court is defendant Paul A. Bilzerian's Motion [1129] for Rule 60(b) relief from the injunctions entered by this Court on July 5, 2001 [ECF No. 388] and July 19, 2001 [ECF No. 416]. Upon consideration of defendant's Motion, the Receiver's opposition [1130] thereto, the reply [1131], the applicable law, and the entire record in this case, the Court will deny defendant's motion for the reasons set forth below.

II.BACKGROUND

This Court has summarized the background of this decades-old case many times and only repeats the facts relevant to this decision. A more detailed chronicling can be found at SEC v. Bilzerian, 613 F. Supp. 2d 66, 68--69 (D.D.C. 2009).

More than twenty years ago, a jury sitting in the United States District Court for the Southern District of New York convicted Mr. Bilzerian of securities fraud and conspiracy to defraud the United States. United States v. Bilzerian, 926 F.2d 1285 (2d Cir. 1991) (affirming conviction). Mr. Bilzerian was sentenced to four years' imprisonment and fined $1.5 million. Id. The SEC then filed a civil suit against him, and this Court ultimately ordered him to disgorge $62 million in ill-gotten gains. SEC v. Bilzerian, 29 F.3d 689 (D.C. Cir. 1994) (affirming judgment) (ruling for the SEC in its civil suit against Bilzerian); SEC v. Bilzerian, 814 F. Supp. 116 (D.D.C. 1993) (ordering disgorgement of $33 million in profits), aff'd,29 F.3d 689 (D.C. Cir. 1994); SEC v. Bilzerian, 1993 WL 542584 (D.D.C. 1993) (ordering disgorgement of $29 million in prejudgment interest).

Seven years later, with the judgment still unpaid, this Court held Mr. Bilzerian in contempt of the disgorgement order, SEC v. Bilzerian, 112 F. Supp. 2d 12 (D.D.C. 2000), aff'd, 75 Fed. Appx. 3 (D.C. Cir. 2003), established a receivership estate "for the purpose of identifying, marshalling, receiving, and liquidating his assets," and appointed a Receiver. SEC v. Bilzerian, 127 F. Supp. 2d 232, 232 (D.D.C. 2000). Following the Receiver's appointment, Mr. Bilzerian repeatedly attempted to hinder the Receiver's efforts to collect assets in which he had an interest and to interfere with this Court's exclusive jurisdiction through the commencement of litigation in other jurisdictions. Specifically, in the six months following the Receiver's appointment, Mr. Bilzerian:

* Filed for bankruptcy once again in 2001 to frustrate the SEC's collection efforts. In re Bilzerian, 258 B.R. 850, 857 (Bankr. M.D. Fla. 2001), aff'd, 276 B.R. 285, 295 (M.D. Fla. 2002), aff'd, 82 Fed. Appx. 213 (11th Cir. 2003);

* Attempted to relitigate this Court's finding that he had an interest in the Bilzerian Related Entities by commencing litigation in 2001 in Florida and Nevada state courts in which he sought a declaration regarding his rights and interest with respect to four such entities. ECF No. 212, Ex. 1; ECF No. 222, Ex. 1;

* Attempted to reopen his 1991 bankruptcy case in order to sue the SEC in another attempt to obtain a determination that assets of certain Bilzerian Related Entities were exempt from the SEC's collection efforts. ECF No. 370, Ex. A; and

* Aided in the commencement of additional bankruptcy proceedings by his wife, Terri

L. Steffen, and Overseas Holding Limited Partnership ("OHLP"), one of the Bilzerian Related Entities in which this Court had found that he had an interest- specifically causing OHLP to file for bankruptcy within weeks after the receiver had obtained an order freezing all assets held in OHLP's name. ECF No. 330; see ECF No. 279.

As a consequence of Mr. Bilzerian's repeated efforts to interfere with the Receiver's attempts to establish the sources and amounts of his assets and collaterally attack this Court's rulings, on July 5, 2001, this Court ordered Mr. Bilzerian to show cause why he should not be held in contempt of the Receivership Order. ECF No. 388. This Court ordered Mr. Bilzerian to submit a response, which his counsel did. ECF No. 408. The July 5 Order to Show Cause led to this Court's July 19, 2001 Order ("July 19 Injunction") finding Mr. Bilzerian in contempt of the Receivership Order and enjoining him and those acting in concert with him from filing any complaint, proceeding or motion in the United States Bankruptcy Court for the Middle District of Florida, or from otherwise commencing or causing the commencement of any proceedings in any court, other than in this Court or in appeals of [this] Court's Orders to the United States Court of Appeals for the District of Columbia, without prior application to and approval of this Court . .

ECF No. 416. Mr. Bilzerian then sought a stay pending appeal, in which he did not claim that he was denied an opportunity to respond to the motions leading to ...


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