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California Central District CourtCase No. 8:08-cv-00668UNITED STATES OF AMERICA v. Comco ManagementCorporation et alDocument 15

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Neil A. Goteiner (State Bar No. 83524\nsoteinerfôfbnì.com

Deeþak cqpÞ (State Bar No. 226991)dùupta(ò,fbm.com

Fare'llá Brãun & Martel LLP235 Montgomery Street, 17th FloorSan Francisco. CA 94104Telephone: (415) 954-4400Facsimile (415) 954-4480

Attornevs for DefendantsCOMCO MANAGEMENT CORPORATION:CONCORD FUNDING CO.. LLC: METCOMANAGEMENT CORPORATIOÑ: MONEXCREDIT CO.: MONEX DEPOSIT CO.:NEWPORT SERVICE CORP.

RUFUS VONTHULEN RHOADESP.O. Box 7068Pasadena, CA 91109-7068Telephone: (62û 683-4566Facsimile : (626)' 7 92-0195

Attornev for DefendantPCCE. INC.

LINITED STATES DISTRICT COIIRT

CENTRAL DISTzuCT OF CALIFORNIA

SOUTFIERN DIVISION

LINITED STATES OF AMEzuCA,

Plaintiff.

VS.

COMCO MANAGE,MENTCORPORATION: CONCORDFLINDING CO., LLC; METCOMANAGEMENT CORPORATION:MONEX CREDIT CO.: MONEXDEPOSIT CO.: NEWPORTSERVICE CORP.: AND PCCE.INC.,

Defendants.

DEFENDANTS' MOTION TO DISMISSCase No. SACVO8-00668 JVS (MLGx)

Case No. SACV08-00668 JVS (MLGx)

DEFENDANTS'NOTICE OFMOTION, MOTTON TO DISMISSAI\D MEMORANDUM OF POINTSAND AUTHORITIES IN SUPPORT

Date: October 19.2009Time: 1:30 p.m.Ctrm: Hon.James V. Selna

PRETzuAL CONFERENCE ANDTRIAL DATE,S: NOT SET

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Case 8:08-cv-00668-JVS-RNB Document 15 Filed 08/24/09 Page 1 of 39 Page ID #:77

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NOTICE OF MOTION

TO PLAINTIFF AND ITS ATTORNEYS OF RECORD:

PLEASE TAKE NOTICE that pursuant to the Parties' stipulation and this

Court's order thereto, on October 19,2009 at 1:30 p.ffi., or as soon thereafter as the

matter may be heard, before the Honorable James Selna in Courtroom 10(c) of the

United States District Court of the Central District of California, Southern Division,

Defendants, will move the Court (1) pursuant to Fed. R. Civ. P. 12(bX6) and 9(b)

for an order dismissing certain of Plaintiffls claims for failure to state a claim on

which relief may be granted, or in the altemative, (2) pursuant to Fed. R. Civ. P.

Iz(e) and (f), for an order requiring a more definite statement and striking portions

of the Complaint.

This motion is made following the conference of counsel pursuant to L.R. 7-

3. which defendants initiated on August 19, 2009 and continued on August 24,

2009 to accommodate trial counsel's schedule.

Dated: Ausust 24.2009 FARELLA BRALI|I & MARTEL LLP

By: /s/ Neil GoteinerNeil GoteinerAttorneys for Defendants

Dated: August 24,2009

Bv: /s/ Rufus T. Rhoades-

Attorney for Defendant PCCE, Inc.

DEFENDANTS' MOTION TO DISMISSCase No. SACV08-00668 JVS (MLGx) - I -

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TABLE OF CONTENTS

Page

MEMORANDUM OF POINTS AND AUTHORITIES ...........1

I. INTRODUCTION ...........1

il. STATEMENT OF FACTS ..............2

A. Procedural History ................2

B. The Govemment Sues The Assessed Entitv And Asks ThisCourt To Disregard The Separateness Of Six Other CorporateEntities To Co1Iect.............. ...................2

C. The Four Counts In The IRS' Complaint .............3

M. LEGAL PLEADING STANDARDS ............,.5

ry. ARGUMENT.......... .........6

A. Plaintiffls Complaint Fails Rule 9 And Rule 8 Bv LumpineDe fenla4ts, An'd Om itti ng Indi vi dua lized A I I egáti ons A gain stEach Defendant. ............. ..:...................6

B. The Fraudulent Transfer Claim Fails to Plead "'What," "'When"And "How" With Particularity........... ...................9

l. The Few Assets Noted Do Not Identifu With Suff,rcientParticularity "What"'Was Allegedly Ïransferred. .................... 1 0

a. The "Monex Enterprise" Is Not Described WithSufficient Particulárity to Survive Rule 9(b)Scrutiny.............. ............. l0

b. 'lEmployees" Are Not Property For Purposes OfcrrËrA. ..........r2

c. Thoueh The IRS Alleees A "Location" WasTransTerred It Manifeítlv Does Not Alleee ThatAny Real Property Was lransferred. ..... :......... ............. 12

2. The IRS Has Failed To ldentiñ, With Particularity"'When" The Alleged Fraudulent Transfers Took Place........... 13

3. Plaintiff Has Failed To Provide The "How" Of TheAlleged Fraudulent Transfers. ............ ......13

C. Plaintiffls Demand For Judement Against Each Of "The NewMonex Entities" Fails Beca-use Such-Relief Is Not AvailableUnder Fraudulent Conveyance Law. ..................14

v. CONCLUSION .............15

DEFENDANTS' MOTION TO DISMISSCase No. SACV08-00668 JVS (MLGx) -ll-

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TABLE OF AUTHORITIES

Page

FEDERAL CASES

Arikat v. JP Morgan Chase & Co.,430 F. SupÞ. 2d 1013 G\r.D. CaL.2006).............. .............6

Atchison v. Brown &. Bryant.159 F.3d 358 (9ttí Cir. 1 997\ ........ .................r2

B lv- Masee v. Californía.' 2j6 F.3d lÕt+ çSthCir. 2001).............. ...6,8,9

In re Brun.360 B.R. 669 (Bankr. C.D. CaL2007).. . ......... ......13,14

Elliott v. Glushon.390 F.zd 514 (9th Cir. 1967\........ ................. 14

Ellisonv. American Image Motor Co.,36 F. Supp. 2d 628 (S.D.N.Y. r'999) ...........5, 6

Forum Insurance Co. v. Devere Ltd..151F. Supp.2dll45 (C.D. Cal.200I)............. .9,11,14

Gauvin v. Trombatore.682 F. Srrpp. 1067 (N.D.Cal. 1988)... ......... ..................5

General-Probe, Inc. v. Amoco Corp.,926 F. Supp. 948 (S.D. Cal.-1996) ........ ..........s

Grewal v. Choudhurv.2007 u.s. Disi.'LEXIS 81856 (N.D. Ca1.2007). ... ....... 6, 13

IUE AFL-CIO Pension Fund v. Herrmann.9 F.3d 1049 (2d Cir. 1993)....................... .......9

Mannv. GTCR Golder Rauner, LLC,483 F. Supp. 2d884 (D. Ariz. 2007) ...............9

Neubronner v. Mílken.6 F.3d 666 (gth'Cir. 1993) ...............6

Odyssey Re (London) Lld u_, $tir!í4g Cooke Brown Holdings Ltd.," 8s F. Supp. 2ó,282 (S.D.N.\õ2000) ...............5

Ro I o v. C ity I ay e,s lin g_ Ç o. !íq ryi lqt ing Trus t,15s F.3d 644Od Cir. 1998)........ ....................9

In re Stac Electríc Sec. Litigation,89 F.3d 1399 (9th Cíi. 1996)........ ...................9

DEFENDANTS' MOTION TO DISMISSCase No. SACV08-00668 JVS (MLGx) - ril -

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Sunnvside Development Co., LLC. v. Cambridse Displav Tech. Ltd..- 2008 U.S. Dist. LEXTS 748s0 CN.D. CaI zOOS)......................:..............5,6,7

Super Visíon Internatíonal, Inc. v. Mega Internationøl Committee Bank Co.,- 534 F. Supp. 2d 1326 (S.D. Fla. 2008)..... ........ ..............9

Vqn Dyke Ford, Inc. v. Ford Motor Co..399F. Supp. 277 (8.D. Wis. 197s)........ .....5,7

Vess v. Ciba-Geísv Corp. USA.317F.3d IA97 Q7hCir.2003).............. .7,9,13

CONSTITUTIONS

[J.S. ConstitutionAmendment XIII... ...........IAmendment XV.... ...........8

FEDERAL RULES

Federal Rules of Civil Procedure

STATE STATUTES

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MEMORANDUM OF POINTS AND AUTHORITTES

I. INTRODUCTION

Plaintiff IRS's fraudulent conveyance claim fails to meet fundamental

pleading requirements of Fed. R. Civ. Pro. 8 and 9(b), and should be dismissed.

The Complaint avers that Defendants - which the Complaint styles "New Monex

Entities" - are alter egos, successors and fraudulent transferees of Monex

International, Ltd., a company against whom ataxwas assessed in 1998. Plaintiff s

fraudulent transfer theory is that Monex International Ltd. fraudulently and

intentionally transferred assets to these "New Monex Entities." The IRS does not

specifu which "New Monex Entities" received what property items, or the timing of

the transfer to any defendant. Instead, the IRS lumps all of these defendants

together and states vaguely that assets were transferred to these entities as a

collective group. Rules 8 and 9(b) prohibit such lumped pleading of actual

fraudulent allegations because defendants are unable to determine what allegations

pertain to them individually, and which defendants had what alleged intent to

defraud. They are left unable to meaningfully respond to such a complaint.

Just as the Complaint fails to identiff the "who" of the alleged fraudulent

conveyances, it fails to state with particularity the "what," "when" and "how" of the

alleged fraudulent conveyances. For instance, the IRS claims "employees" were

transferred. But employees are not properly under the controlling California

Uniform Fraudulent Transfer Act, California Civil Code $$ 3439 et seq. (the

"CtlFTA"). Similarly, while the Complaint alleges a "location" was transferred,

conspicuously absent is any allegation that any lease holds or interest in real

property was transfened to the New Monex Entities. These allegations are

necessary under Rule 9(b) and are important to put defendants on notice of the type

of relief that the IRS is seeking. A proper fraudulent transfer claim alleges that a

valuable asset that would have been available to satisfu a creditor's claim has been

improperly transferred with actual or constructive fraudulent intent to put the asset

DEFENDANTS' MOTION TO DISMISS ICase No. SACV08-00668 JVS (MLGx) - I -

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beyond the reach of the creditor. Relief for a fraudulent transfer means that the

transferee either returns the improperly transferred asset to the transferor, or pays

the value of the transferred asset at the time of the improper transfer. It's therefore

critical that the IRS put defendants on notice of what assets the IRS contends were

fraudulently transferred, to whom, and when.

At the very least, if the IRS want to proceed with their CIIFTA claim, Rules

8, 9(b) and 12(e) require the IRS to state a more specif,rc, definite and detailed claim

against each defendant so that each defendant can respond to the IRS complaint.

II. STATEMENT OF FACTS

A. Procedural History

The IRS sued seven separate defendants on June 13,2008 in this action to

reduce to judgment a federaltaxassessment entered in 1998. Compl. t| l.t The

parties conducted limited informal discovery for several months while requesting

continuances to serve the complaint. Dkts 3, 8 and 9. Defendants attempted to

piece together the narrative of relevant events, which was more difficult given that

the IRS waited ten years to file its complaint. The IRS served the Complaint on

June 5, 2009. Dkt 11. The parties stipulated to an extension of time to respond or

otherwise answer the complaint until JuIy 24, 2009 and then until August 24,2009.

Dkt 13.

B. The Government Sues The Assessed Entitv And Asks This CourtTo lisregard The Separateness Of Six Other Corporate EntitiesTo Colleðt

The IRS bases its action to reduce to judgment on what it alleges is a June

15, 1998 tax assessment for tax years 1980-84; the IRS and defendant Monex

International had previously stipulated to the assessment. T'1T 17 , 42-43. The IRS

complaint seeks not only to reduce that assessment to judgment against Monex

' Reference to paragraphs of the Complaint hereafter shall be in the form "'1T-."

DEFENDANTS'MOTION TO DISMISS 1Case No. SACVO8-00668 JVS (MLGx)

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International's alleged successor, PCCE, Inc., but also asks the Court to disregard

the corporate separateness of six additional entities and hold them liable for the

same assessment. The IRS's claim during its ten year delay has now ballooned to

ß378,237,162.42, with interest and penalties. 124.

C. The Four Counts [n The IRS' Complaint.

Count I - Reducine to Judement Aeainst PCCE. Count 1 of the

complaint seeks to reduce the 1998 assessment to judgment against PCCE, who the

IRS claims is the successor of Monex International. The complaint alleges that

Monex International was merged into Monex Corporation, whose name was then

changed to PCCE, Inc. fllf 16-24.

Count 2 - Alter Eso/Sinsle Enterprise. In addition to PCCE, the

Complaint seeks to impose liability for the assessment amount on separate

companies styled the "New Monex Entities." They are alleged "alter egos" and are

averred to constitute a "single-enterprise" with Monex International. fl 26. The

term "New Monex Entities" is defined as Comco Management Corporation,

Concord Funding, LLC, Metco Management Corporation, Monex Credit Company,

Monex Deposit Company and Newport Service Corporation. fl 14.

In Count 1, the IRS alleges that "the Principals of the Monex Enterprise

transferred the operation of the Monex Fnterprise from Monex International to the

New Monex Entities in an effon to avoid exposure of the proceeds from the Monex

Enteqprise to outstanding federal tax liabilities." n 47. "The Monex Enterprise" is

elsewhere defined as "the collective activity of [the New Monex Entities along with

Monex International, Ltd. and its alleged successor PCCE] in the leveraged sale of

precious metals to the public." T 13. In effect, the IRS is alleging that the old

Monex International's business of leveraged sale of precious metals was transferred

to a new set of entities and therefore the new entities should pay Monex

International' s old tax liabilitv.

DEFENDANTS' MOTION TO DISMISSCase No. SACV08-00668 JVS (MLGx) - r -

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As supporting allegations, the IRS states that "[b]eginning in 1988,

employees of Monex International were shifted to Newport Service Corporation.

1l57. These employees were then shifted to Monex Deposit Corporation. fl 59.

The IRS states that the "[t]he Monex Enterprise used the same telephone numbers

both before and after the shift," and the same "office space." tTtT60-61. Further, it

alleges that goodwill was transferred from Monex International to the New Monex

Entities. tT 63.

The Complaint quotes statements from the Monex.com website allegedly

indicating that Monex Deposit Company has tried to "capitalize" onthe history of

Monex Intemational, Ltd. '1TT 65-70.

Coqnt 3 - Successor-in-Interest Liability. In Count 3, Plaintiff alleges that

the "New Monex Entities assumed the Monex Enterprise, and its employees,

location, phone numbers, and goodwill during the late 1980s and early 1990s

without providing fair consideration to Monex International." n73. Therefore, the

IRS alleges, it is left without recourse against Monex International and is entitled to

judgment against the New Monex Entities. 1174.

Count 4 - Fraudulent Conveyee Liability. This count, which is the subject

of this motion, alleges that "The New Monex Entities are liable to the United States

for the assets received from Monex International and their proceeds because the

New Monex Entities are the fraudulent conveyees of the Monex Enterprise, and its

employees, location, phone numbers, and goodwill from Monex International, Ltd."

fT 78. 2 Plaintiff alleges the fraudulent transfer was intentional. n 79 ("with the

'Defendants do not view the complaint as asserting the fraudulent conveyanceclaim against defendant PCCE. The Complaint, however, can be read to beambiguous as to whether the alter ego theory swells the fraudulent conveyanceclaim to reach PCCE, the alleged successor of Monex International Ltd. In a meetand confer today, the AUSA declined to stipulate that the Complaint's fraudulentconveyance claim did not reach PCCE. Accordingly, to err on the side of caution,PCCE is joining this motion to the extent that Plaintiff contends that Count IVshould be regarded as containing allegations in regard to Monex International Ltd,whom the Plaintiff alleges is PCCE's predecessor in interest.

DEFENDANTS' MOTION TO DISMISS A

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intent to prevent the United States from reaching the assets and income of the

Monex Enterprise.") The IRS further states "reasonably equivalent value" was not

received in return for the relevant assets and that the Monex principals "believed or

reasonably should have believed" that Monex International would be without

resources to pay the outstanding federal tax liability due to the transfer. fl 80. The

IRS asks for'Judgment" against the New Monex Entities and"attaching the assets

transferred and their proceeds" in satisfaction of the Government's claim. tT 82.

III. LEGAL PLEADING STANDARDS

A complaint may not lump together allegations against multiple defendants.

Though the notice pleading standard of Rule 8 is liberal, where a plaintiff sues

multiple defendants and sets forth multiple causes of action, he "must allege the

basis of his claim against each defendant to satisff Federal Rule of Civil Procedure

8(a)(2), which requires a short and plain statement of the claim to put defendants on

sufficient notice of the allegations against them." Gauvìn v. Trombatore,682F.

Supp. 1067,1071 G\f.D. Cal. 1988). Even absent otherpleading deficiencies, such

"confusion of which claims apply to which defendants would require that the

complaint be dismissed with leave to file an amended complaint." Gen-Probe, Inc.

v. Amoco Corp.,926 F. Supp.948,961 (S.D. Cal. 1996)(citingGauvin,682F.

Supp. at I07l). "Specific identification of the parties to the activities alleged is

required . . . to enable the defendantfs] to plead intelligently." Van þke Ford, Inc.

v. Ford Motor Co. , 399 F. Supp. 277 , 284 (E.D. Wis. I 97 Ð.3

' Similar to Rule 8, Fed. R. Civ. P. (9Xb) also prohibits a plaintiff from lumpingtogether multiple defendants under a collective fraud theory, and therebysidestepping particularized claims against individual defendants. Rule 9(b)"requires that aplaintiff plead with sufficient particularity attribution of the allegedmisrepresentations or omissions to each defendant." See Sunnyside Dev. Co., LLC,v. Cambrídge Display Tech. Ltd.,2008IJ.S. Dist. LEXIS 74850 G\f.D. Cal. 2008);see also Odyssey Re (London) Ltd. v. Stirling Cooke Brown Holdings Ltd.,85 F.Supp. 2d282,294 (S.D.N.Y. 2000), a.ff'd,242F.3d366 (2d Cir.2001) ("fw]henfraud is alleged against multiple defendants, a plaintiff must plead with particularityby setting forth separately the acts or omissions complained of by each defendant.")Put simply, "Rule 9(b) is not satisfied by a complaint in which defendants are

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While Plaintiff relies heavily on its alter ego theory apparently to side step

Rule 8, there is no alter ego exception to the Rule's requirement of individualized

allegations In Gen-Probe, Inc., the court required a plaintiff alleging multiple

defendants were alter egos of one another to plead individual allegations regarding

patent infringement as to each of the alleged alter ego defendants. Id. at951,960-

62. See also Arikat v. JP Morgan Chase & Co.,430 F. Supp. 2d l0l3,I02I-22

(N.D. CaL.2006) (alter ego accusations not withstanding "allegations fwere]

insufficient in that they [were] ascribed to defendants collectively rather than to

individual defendants.")

IV. ARGUMENT

A. Plaintiffls Complaint Fails Rule 9 And Rule 8 Bv LumpingDefenda4ts,_AniI Omitting Individualized Allegãtions ÄgaìnstEach Defendant.

DEFENDANTS' MOTION TO DISMISSCase No. SACV08-00668 JVS (MLGx) - o -

In addition to Rule 8, Plaintiff s fraudulent conveyance claim against the

"New Monex Entities" must adhere to the heightened pleading standard of Rule 9,

because the claim alleges actual fraudulent intent. Compl. 1179. Rule 9(b) is

directly applicable to actual fraudulent conveyance claims. See, e.g., Sunnyside

Dev. Co., LLC, v. Cqmbridge Display Tech. Ltd.,2008 U.S. Dist. LEXIS 74850,

*23 (N.D. Cal. 2008).4 "fD]efendants accused of defrauding the federal government

have the same protections as defendants sued for fraud in other contexts." Bly-

Magee v. Caliþrnia,236 F.3d 1014 (9th Cir. 2001) (and applying Rule 9(b) in

False Claims Act case). The IRS failed to make individualized allegations against

lumped together in vague allegations." Ellisonv. Amerícan Image Motor Co.,36F. Supp. 2d 628,640 (S.D.N.Y. 1999) (citation and quotation marks omitted.)o Und"t Rule 9(b), claims of actual intent to fraudulently transfer "must specifusuch facts as the times, dates, places, benef,rts received, and other details of thealleged fraudulent activity"). See also, Grewal v. Choudhury,2007 U.S. Dist.LEXIS 8 1 856 (N.D. Cal. 2007) (citing Neubronner v. Milken, 6 F .3d 666, 67 I-72(eth Cir. 1ee3)).

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each defendant regarding the alleged actual fraudulent transfers, which fails the

Rule 8 requirement as well as the Rule 9(b) "who, what, when, where, and how"

requirement. See Vess v. Cíba-Geíg Corp. USA,317 F.3d 1097,1103-04, 1 106

(9th Cir. 2003) (Rule 9(b) requires that "the circumstances constituting fraud or

mistake shall be stated with particularity," and the allegations "must be

accompanied by 'the who, what, when, where, and how' of the misconduct

charged.").5

Count IV of the complaint alleges only that assets were transferred generally

to the "New Monex Entities." See ll78 ("New Monex Entities are fraudulent

conveyances of the Monex Enterprise..."); fl 81 ("New Monex Entities assumed the

Monex Enterprise..."). Such generalized allegations fundamentally violate the

requirement under Rule 8 and the similar requirement under Rule 9(b) that

averments-particularly those of fraud-be individu alized against all defendants.6

This is particularly true of fraudulent transfer claims where a transferee is generally

only liable for the value of the property transferred to it, measured at the time of the

transfer. Cal. Civ. Code $ 3a39.07(c).

The remainder of the Complaint similarly lacks the required individualized

allegations. While the alter ego count claims allegations of supposed asset

s To the extent Plaintiff may have pled constructive fraud in the alternative, thatdoes not eliminate the need for it to plead actual fraud with particularity. Vess,3l7F.3d. at 1103-04 (plaintiff choosing to allege actual fraud even where not a"necessary element" must "satisff the particularity requirement" for "claim as awhole" or at least to averments of fraud); Sunnyside, 2008 U.S. Dist. LEXIS 74850,at*23-24,28.u Su", e.g., Van 4k" Ford, Inc. v. Ford Motor Co., 399 F. Supp. 277 ,284 (E.D.Wis. 1975) (holding under Rule 8, "Specific identification of the parties to theactivities alleged is required . . . to enable the defendant[s] to plead intelligently.");Sunnyside Dev. Co., LLC, v. Cambridge Dßplay Tech. Ltd.,2008 U.S. Dist. LEXIS74850 (N.D. Cal. 2008) (under Rule 9(b) requiring particular pleading to individualdefendants of actual fraudulent transfer claims; "plaintiff s failure to differentiatebetween the various CDT entities (when it has so punctiliously done so in otherpleadings) means that plaintiff 'has failed to plead with suffrcient particularityattribution of the alleged misrepresentations or omissions to each defendant'.")

DEFENDANTS' MOTION TO DISMISSCase No. SACV08-00668 JVS (MLGx) - t -

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transfers, those transfers of telephone numbers and office space are also general to

the "New Monex Entities." This lumping still fails to notiff the individual

defendants of their involvement, making it impossible for them to respond

meaningfully. See ]ltl60, 6l and 63.7

As Plaintiff has not seriously alleged cognizable transfers to defendants

individually, defendants are not on reasonable notice of the fraudulent transfer

claims against them and are in no position to answer the Complaint's averments.

This form of pleading fails "to give defendants notice of the particular misconduct

which is alleged to constitute the fraud charged so that they can defend against the

charge and not just deny that they have done anything wrong." Bly-Magee,236

F.3d at 1019.

Individualized pleading under Rule 9(b) is of particular importance "to deter

the filing of complaints as a pretext for the discovery of unknown wrongs, to

protect fdefendants] from the harm that comes from being subject to fraud charges,

and to prohibit plaintiffs from unilaterally imposing upon the court, the parties and

' There is a specific allegation of "employee" transfers to Newport ServiceCorporation and a subsequent transfer to Monex Deposit Company, but employeesare not property, and their transfers are therefore not cognizable under CUFTA,which only permits recovery for transfers of "assets" which are defined as interestsin "property," which is in tum def,rned as things capable of ownership. ,See Cal.Civ. Code $$ 3439.01(e) and (h). Employees cannot be owned. U.S. Const.Amendment XIII and XV. Further, even if "employee" transfers to two of the"New Monex Entities" could support a claim under CUFTA (they cannot) there arenevertheless no individualized allegations of asset transfers to the other "NewMonex Entities" - Comco Management Co., Concord Funding Co., MetcoManagement Corp. or Monex Credit Corp.- in the Complaint. See l]'{l|48-55(alleging no specif,rc transfers to these entities.) As a matter of public record, forexample, Concord Funding Co. LLC was not even formed until 1995, long aftermost of the complained of alleged conduct occurred and the only allegation tying itto any transfer is that it is owned by two of the other entities and is somehow"integrally tied" to the "Monex Enterprise" because it entered into contractualagreements of some kind "in 1995 and 2002." In 52,53.

DEFENDANTS'MOTION TO DISMISS O

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society enoÍnous social and economic costs absent some factual basis." In re Stac

Elec. sec. Litig., 89 F.3d 1399,1405 (9th Cir. 1996).8

The IRS' lumped pleading also runs afoul of fraudulent transfer pleading

requirements. Any relief may be had only against the specific transferee of the

particular asset transferred. Forum Ins. Co. v. Devere Ltd.,15l F. Supp. 2d II45(C.D. CaL200l), off'd.62Fed. App*. 151 (9th Cir.2003) (relief against alleged co-

conspirator limited solely to any specific assets transferred). In Forum Insurance

the Central District of Califomia expressly rejected a request to hold liable an

accountant for allegedly "conspiring" in an alleged fraud under CUFTA. Any

recourse against the accountant was limited to a transferred asset. Thus, holding the

IRS to the "no lumping" standard is not only required by the Federal Rules, but

CUFTA as well.e

B. The Fraudulent Transfer Claim Fails to Plead'6What," "When"And'oHow" With Particularitv.

Even apart from lumping defendants, which fails the "who" criterion of

pleading with particularity, Plaintiff also failed to satisff the "what", "when" and

"how" prongs of Rule 9(b) . See Vess,317 F.3d at 1106; Bly-Magee v. Califurnia,

236 F .3d af 1014 ("defendants accused of defrauding the federal government have

t S"u also Rolo v. Cíty Investing Co. Liquidating Trust,l55 F.3d 644, 658 (3d Cir.1998) ("The purpose of Rule 9(b) is to provide notice of the 'precise misconduct'with which defendants are charged and to prevent false or unsubstantiatedcharges."); IUE AFL-UO Pension Fund v. Herrmann,9 F.3d 1049, 1057 (2d Cir.1993) (Rule 9(b)'s heightened pleading requirement alerts defendants to specificfacts upon which a fraud claim is based and safeguards a "defendant's reputationand goodwill from improvident charges of wrongdoing").n Sæ also Super Vision Int'1, Inc. v. Megø Int'l Comm. Bank Co.,534 F. Supp. 2d1326 (S.D. Fla. 2008) (under the similar UFTA in Florida, there is no cause ofaction against aparty who assists or aids or abets a fraudulent transfer where theparty does not come into possession of the property transferred); Mann v. GTCRGolder Rauner, LLC,483 F. Supp. 2d884 (D. Ariz. 2007) (there is no independentcause of action for aiding and abetting a fraudulent transfer under the similarArizona UFTA.)

DEFENDANTS' MOTION TO DISMISSCase No. SACV08-00668 JVS (MLGx) - 9 -

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the same protections as defendants sued for fraud in other contexts," and applying

Rule 9(b) in False Claims Act case). Plaintiff devotes little attention to the

particulars of the alleged fraud beyond conclusory statements that a fraudulent

transfer occurred.

1. The Few Assets Noted Do Not Identifv With SufficientParticularity "What" Was Alleeedly lransferred.

Regarding what was transferred, the IRS has failed to identiff with

particularity any assets that Monex International transferred to any specific alleged

transferee. The complaint alleges: "The New Monex Entities are liable to the

United States for the assets received from Monex International and their proceeds

because the New Monex Entities are the fraudulent conveyees of the Monex

Enterprise, and its employees, location, phone numbers, and goodwill from Monex

International, Ltd." f 78.

a' 5,Ï¡oi#;l;;*iffiçli'ä's,ll-gi,Ìnä'}öf0$11",,"".

The IRS alleges that the "Monex Enterprise" was an asset transferred to the

"New Monex Entities" within its claim for fraudulent conveyance liability. tT78.

The amorphous concept of the "Monex Enterprise" fails to comply with the

requirement under Rule 9(b) that the "what" of a fraudulent transfer be identified

with particularity.

The complaint defines the Monex Enterprise to include the "collective

activity" of the "New Monex Entities" and PCCE "in the leveraged sale of precious

metals to the public." tTT 13, 14. There is no indication as to what "collective

activity" means, and why this unspecified "activity" is the "property" of Monex

International as the CI-IFTA defines property. See Civil Code $ 3439.01(i),

$ 3439.01(a), $ 3439.01(h) (CUFTA provides that only transfers of "assets", which

are in tum defined as "property" are subject to avoidance, and property is that

which is "subject to ownership").

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The Complaint's allegations about the undifferentiated "Monex Enterprise"

raise serious doubts as to whether fraudulent conveyance law is even applicable.

For example, in relation to defendant Concord Funding, the IRS alleges that it had

"agreements" with some of the other entities and is therefore "integrally tied" to the

other entities. 1l1l 52-53. Regardless of whether such an allegation could support

liability under an alter ego theory, a mere "agreement" does not support a claim

under fraudulent transfer law. Fraudulent conveyance relief is limited to assets

transferred. Cf. Forum Ins. Co., 151 F. Supp. 2d ll45 (relief against alleged co-

conspirator limited to specific assets transferred.)

The "Monex Enterprise" transfer narrative is also irreparably circular. The

"Monex Enterprise" is defined to include the "New Monex Entities" themselves.

Compare tTlT 13 and 14 (Monex Enterprise def,ined to include each of the "New

Monex Entities"). Apparently, the IRS is alleging a transfer of collective activity in

whole or in part, from the New Monex Entities to themselves. Such an internal

self-transfer is by definition not a transfer at all. This circularity is grounds for

requiring a more definite statement under Rule lz(e) or dismissal under Rule 9(b).

Cf, Sunnyside at*23-24 (contradictory averment as to whether lawsuit filed before

or after transfer agreement reached fails 9(b) scrutiny).

The IRS' vague description of a transfer of the "Monex Enterprise" is similar

to the plaintiff s insuffrcient fraud allegation in Sunnysíde That "all or almost all" of

a company's assets were transferred for little or no consideration. Sunnyside held

that this allegation standing alone did not pass muster under Rule 9(b). Sunnyside

at *24.10

l0 Plaintiff s allegation of an enterprise transfer appears to be a restatement of itsalter ego claim for liability. Plaintiff should be required to distinguish these legaltheories.

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'lEmployees" Are Not Properfy For Purposes OfCUF'TA:

The IRS improperly alleges that the transfer of employees to the "New

Monex Entities" was a fraudulent transfer. But employees do not constitute assets

the transfer of whom can be a cognizable basis for relief under the CUFTA.

CUFTA defines assets as "property" ($ 3439.01(a)) that can be owned

($ 3439.01(h)). Employees are not properry assets that can be owned . See footnote

7 above. Accordingly, the employee transfer portion of Plaintiff s complaint is

immaterial and impertinent and should be stricken.

To the extent plaintiff wishes to argue that the transfer of employees is

indicative of a goodwill transfer, the allegation should be clarified under Rule

12(e). Notably, Plaintiffls threadbare allegations that "employees" and "many

employees" were shifted do not even begin to present with particularity the indicia

required for such an argument under Rule 9(b). See, e.g., Atchison v. Brown &

Bryant,l59 F.3d 358,361,365 (9th Cir. 1997) (rejecting argumentthat fraudulent

transaction exception to rule against successor liability should apply due to

employee migration, where acquiror "hired all" Pest Control Advisors, but acquiror

"merely offered employment", and there was "no agreement" requiring

employment).rr

c. Though The IRS Alleges A "Location" Was

l;äiÞfJ{;lrtl,illtil'"TlïP.l't.*"'o"-*"tn"'o"tTheIRSaVerS't'.,ffiaudulenttransferofa..location.,,1T78.Upon

closer scrutiny of the complaint, however, what is conspicuously absent is any

claim that there was a transfer of real property. In actuality, the IRS is alleging that

It Plaintiff s allegation that employees were fraudulently transferred furtherevidences the government's mixing and matching of fraudulent transfer and alterego concepts. Regardless of whether such employee "transfers" might be evidenceof interconnectedness for the IRS' alter ego theory, the employees are simply not"property" for purposes of fraudulent transfer law.

DEFENDANTS' MOTION TO DISMISS ,1Case No. SACV08-00668 JVS (MLGx) - 'L'

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the New Monex Entities use the same office space as Monex International. fl$ 60-

61 (alleging use of same office space). Regardless of whether an allegation of

continuity of worþlace may support a claim of alter ego/single enterprise liability,

it does not support a claim for fraudulent transfer. Use of the office space does not

mean any ownership interest in that property was transferred-e.9., âs when an

office space is being rented.

2. The IRS Has Failed To ldentifv With Particularity "When"The Allesed Fraudulent TransTers Took Place.

The IRS must state with particularity the "times, [and] dates" when the

allegedly fraudulent transfer occurred. See e.g. Grewal, 2007 Ll.S. Dist. LEXIS

81856 at 5; Vess, 3I7 F.3d at 1 106 ("when" required). This is necessary under

CUFTA because (1) it is essential to prove a knowingacÍ" designed to prevent

access to the assets at issue, and (2) because the value of any asset transferred is

measured as of the time of transfer. See, e.g.,CaI. Civ. Code $ 3439.04(b)(a) and

(10) (timing of transfer probative of intent); In re Brun,360 B.R. 669,672 (Bankr.

C.D. Cal. 2007) ("moving creditor may recover a judgment for the value of the

'asset' transferred at the time of the transfer, or the amount necessary to satisfo the

creditor's claim, whichever is less."); $ 3439.08(c) (judgment for "value at the time

of transfer" subject to adjustment for equity).

Here, the IRS selected a vague time period spanning what approaches a

decade as the "when" of its alleged fraudulent transfer. Seel79 ("Iate 1980s and

early 1990s..."). This time period is too coarse to pass muster under Rule 9(b).'t

3. Plaintiff Has Failed To Provide The "How" Of The AllegedFraudulent Transfers.

Plaintiff s nebulous allegation that some set of assets was transferred to the

"New Monex Entities" generally, fails to satisff the "how" requirement under Rule

12 At least one of the "New Monex Entities" was not even in existence in the "early1990s." Concord Funding was not formed until 1995 . See also, $ 53 (allegingagreements with ConcorõFunding starting in 1995).

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9(b). The allegation fails to inform defendants of whether the IRS is alleging some

New Monex Entities are f,rrst transferees and others are subsequent transferees.

This is necessary because the law treats transferees and subsequent transferees

differently. Compare, e.9., ç 3439.08(b)(1) and (2).

C. Plaintiffls Demand For Judgment Against Each Of "The NewMonex Entities" Fails Becaùse SuchRelief Is Not Available UnderFraudulent ConveYance Law.

An overarching problem with Count IV is that the IRS seeks judgment

against all of the "New Monex Entities," when in fact remedies under fraudulent

transfer theories of liability are limited to equitable relief against the specífic

transferee of the specific asset at issue. See ll82 (asking for the sweeping remedy

of a judgment against all of the New Monex Entities for fraudulent conveyance).

Remedies under fraudulent transfer law do not extend to all entities who may have

participated or profited as a result of a transfer. Cf, Elliott v. Glushon,390 F . 2d

514 (9th Cir. 1967) (nojoint and several liability for all those allegedly involved in

asset dissipation; legislative theory is one of "cancellation" of the transfer at issue);

Forum Ins. Co. v. Devere Ltd., 15l F. Srpp. 2d ll45 (C.D. Cal.200I), aff'd 62

Fed. Appx. 15 1 (9th Cir. 2003). Just as in Forum Insurance there was no remedy

against an alleged co-conspirator (regardless of whether they were operating within

the same enterprise as a transferee), here too any remedy will be limited to

equitable relief of the return of the specific asset received by the specific transferee,

or its value at the time of the transfer. A sweeping request for judgment against all

the "New Monex Entities" beyond the specific asset transfers at issue is accordingly

unavailable as a matter of law.

Furthermore, Plaintiff seeks recovery not just of the asset at issue but also all

"proceeds" from the asset. Such proceeds are unavailable in a fraudulent transfer

case. The value recoverable is the value of the asset at the time of the alleged

fraudulent transfer. In re Brun,360 B.R. at 672 ("To the extent a transfer is

voidable, the moving creditor may recover a judgment for the value of the 'asset'

DEFENDANTS' MOTION TO DISMISS 1À

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transferred at the time of the transfer, or the amount necessary to satisff the

creditor's claim, whichever is less."); Cal. Civ. Code $ 3439.08(c) fiudgment

limited to "value at the time of the transfer" subject to equity). Accordingly the

IRS may not seek the value of anything obtained by any defendant in a business

using one of the assets.

V. CONCLUSTON

For the reasons stated above, Defendants respectfully request that the Court

dismiss the IRS' Count IV for fraudulent conveyance. In the alternative

Defendant requests a more definite statement of this Count, or that the Court strike

those portions of the claim that fails to support a claim for relief.

Dated: August 24,2009 FARELLA BRALiN & MARTEL LLP

By: /s/ Neil GoteinerNeil Goteiner

Attorneys for DefendantsCOMCO MANAGEMENTCORPORATION: CONCORD FUNDINGCO., LLC; METCO MANAGEMENTCORPORATION: MONEX CREDIT CO.;MONEX DEPOSIT CO.: NEWPORTSERVICE CORP.

Respectfully submitted,

Bv: /s/ Rufus T. Rhoades"

Attornev for Defendant PCCE. Inc.

Dated: August 24,2009

DEFENDANTS' MOTION TO DISMISSCase No. SACVO8-00668 JVS (MLGx) - 15 -

23432U026643.2

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:.


EXHIBIT A

EXHIBIT A


Case B:08-cv-00668-JVS-MLG Document 1 Filed 06i1 3t2o,o8 t"fftfry PY\, \l

UNITED srArEs DIsrRIcr coullð9msr" DlsrRlcr oF cALfFoRNIA

I (!) PLAINTIFFS (Chcck box ifyou ere rePrcscnling )eutsclfE)

UNITED STATES OF AMERICA

(bi Counly ofRcs¡de¡ceofFiot Lisied Plaintiff(Except in U.S. PlaiotiffC¡scs):

Los Angeles CountY

f I. BASTS OF JUR¡SDICT¡ON (Placc an X in onc box only.)

dl U,S, Co"on.cnt PlaintifT E 3 Fcderal Question (U.S'

60vcmment Nol I Psly)

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- Hiìg fJi:ie

citizershiP

DEFENDAl{TS

Cbmco Msnsgement Corporatìon; Concórd Funding Co.' LLC; Me tco

Managcment Corporat¡on; Monex C.red¡tCo', et a¡ (Sce attachd copy)

.C'ounty ofResideoce ofFirst Listed Defendant (ln U.S. PlaintiffCases Onli);Omnge County

:

I(c) Âltorneys (Fi¡m Name, Address and Telphoue Number' tfyou orc reprcsanting At(ornclr (¡f f\ror,vÍ)

you¡selli p¡ovidc same.)ANDREWT. PRIBE, ÂUSAUS Attorne/s Oflïce300 N. tns Angeles St. #721 t,I¡s Angcles, CA 90012

Tcl; (213) 89a6551 F¡x: (213) 894'01 I5

clTlzENsfl¡ÞoF PRINCIPÀL PARTIES - For Dívc¡sily cascs onlv(Pl¡caanXínoncbox|orp|aintiffandonefordefendant.)

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5l0 Motions toVÊcato Sçntenc€

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530 Gcæral535 Dcath Penalty

540 M¡ndamulOther

550 Clvll Rlghts

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t20 lr'loiine| 30 Miller Act140 Negotlable Instrumenl

150 Rccovcryotovcrpaymc¡( &

, Enforcqncnt ofJudgrnmt

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Student l¡8n (Excl,

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Overpayment ofVclemn's Benefils

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190 Otberiontmct195 Cont¡act Product

Liability

2t0 l¡ndCondcmnatlon220 Foroclosqe230 Rcnt l¡ase & Ejc.lment240 Toßsto Land

245 Tort Product Llatilily290 AIIOùtrRcalPrcPøtY

PËRSONALINJURY3l0 Atrplare315 ,{irplanc Product' Liübility320 Assaull, Ltbcl &

SIands330 Fcd. Emplo¡vrs'

LiàbilirY340 Mo¡lne345 MarinÊ P¡oduc(

Liablllty350 Moto¡Vdticlo355 Motor Vd¡icle

P¡oduct Liobllily360 OthsPc¡son¡l

Injury362 Personal Injury-

Med Malpraclicc165 Personal hjur)'-'

Product Liabillly36E Asbcstos Pøsonal

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630 Liguor laws640 RR. & Truck650 Air¡inc Rcgs

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O 890 Other Stsfutory Actfons

E 891 Agriculturat ActEl 89? EeonomÌc St¿bilizalíon

AcfE 893 EnvironrncnlEl Msl(ers! E94 EnergyÂllocât¡on AclO 895 Frædomoflnfo. ActD 900 Appøl of Fec Dctenni'

nalion Under EqualÀccess ¡o.Juslice

Û 950 Constitutionality ofStatc Stalulcs

StBte REapponiönnenlAntitn¡stBanks and BankingCommacdfCCRatcs/elc.DeponEtionREckct€cr lnßocnccdand ConuptOrgmìzationsConsumcr CrcditCsbldSaiTVSolæ¡lve SeniceSecuri¡iclCommoditiæÆxchange

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730 tåbor/Mgmt.Reponing &Disc¡osuro,lct

7{0 ReílwayteborAct790 Othø t¡bor

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tr 410tr 430tr 450

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eÁì

864

Ul¡tul, ¡OÈñilCÁt CASES: Hås rhis Ectîon bccn pr¿v¡oûtly fllcd urd dísmis:ed ¡crnanded ot closcd?

tfyes,¡istcÊscnumbc{(s): ¡ ,- . * \ ! |

C.v'71 (07,05)

Exhibit A

tr Yes


Case 8:08-cv-00668-JVS-MLG Document 1 Filed 06/13/2008 Page 2 of 18

UNITED STATES DISTRICT COURT, CENTRÁL DISTRI& OF CÀL¡FORNIACIVILCOVERSHEET

Vlll(b). RELATED CASES: Have any casæ becr prwiously fild thot arc rcfatcd to ihc præcnt c¿se? dNo O Ycs

lfycs, list case number(s):

Clyll cáset i re deemed rel¡ßd If ¡ Prevlous¡y fl¡ed s¡sc anü the Prcse|}t c¡te:(Check all boxcs thir apply) tr d Arisc from-tbi same ôr closcly relatcd transactions, hBpp€nints, or evsflt$ or

EB. CEII fordetfiñinsdonoftlrcs6rÍeorsubstentiallyrclttedorsÌrnilarqucslionsoflawandfact;or

, . E C. For orhgr æ¡sons \ì.ould enlail substgr¡tial dupliqation of hbor Íf hcard þ different judgcs; or

B.D. lnvolvé the same pateat, tndcma* or cop¡íght, g¡flono of tho lactors idcnlif¡cd abovc ín a, b or c ds is præenl.

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ix, venue l I-isr ih" culiloriu coñflor s-rur. if orhrr rhan CaltfomiE, in which EÄCH named plaintiflrcsídes (usc an additional s]Ët if óecçssary)

úCheck h6c if lhc U.S. govcm¡nent, its ogørcis or emplo¡tcs is a namod ploinliff.

Los Angeles County

Llsr rhe Cslifomia Coun{y, or Slale iforhø than C¡lifomia, in which EACH n¡mcd dcfend¡nt resides' (Use an a¿ditional shoct if nccssary).

ú Check he¡e if the U.S. govemmcnl, fts agcrcies or cmplo¡rcs is a namcd dcfcndant'

Orange County

LljtthcC¡[fornl¡Coünty,ór SratcifofhertbanCalifomia,inwhiçhÊACHclaimarosc, (Useanadditlorialstrcelifnccessary)

Nolc¡ In land condemna(ion cases, use lhe lot¡lion of thq ¡r8ct of ¡ond involvcd'

Orange County

X. SIGNÀTURE OF ATTORNEY (OR PRO PER):prr- {,y<.13Øo-Ê

Notlce to Coun¡eVParllesl TheCV-?l (JS44)

or olher papc¡s ûs rcquircd by las. Thìs form, approvcd

lrlcd but is uscd by theCletk ofahecourt forthoshcs.)

Kcy to Statistical codes reloting lò SocíofSæerity cascs:

N¡tur€ ofSult Code Àbbrcvltt¡on

86t HlÀ

862

DTWC

DIWW

SSID

msrion contshêd hsrcln ncithcr replace nof supplcrisrt thc flliog and scrviceofpleadlngs

lce ofths Un¡tod slales tn Scptc;k l9?4, is toquircd pursuanl to locål Rule ]J ls nol

initlating thc civildocket shect. (FormorcdÊlailed inslfùct¡oDq scascpa¡alc lnslfuct¡ons

BL

ofC¡u¡s of^ctlon

All claims forhcalrh lnsurancc brÍcfits (Mcdic6rc) und(f Title | 8, Part À ofthc Social Sccuríty Act' as amcndcd.

Àfo, lnct¡dc ch¡ms by hsspìtats. skillcá nursing iacilities, etc., fot ccl¡ficatlon as proví&re ofscwíccs und€r thc

program. (42 U.S.C. l935FF(bD

All claims for.'Blcck L¡ng" bcncfìrs undcr Tillc 4, Part B, ofthe Fcdenl Coal MinÈ Hcalth and Safcly Act of l9ó9'

(30 u.s.c. 923)

All ilaíms filed by insured r+,o¡kers for dßability insuroncc be¡efits unde¡ Ti!le 2 ofthc Social Søuri¡y Act, as

ar¡rcnded;plusaliclafrnsfilcdforchild'sinsu¡anccb¿ncI¡tsbascdondisrbllity. (42U.S.C''105(e))

All claims l¡ted for widorys orwldowcn insu¡anccbcnefits ùEs€d on disabit¡ty undcr Titlc2 ofùc Soclat ScÉurtty

Act, as amcridcd. (42 U.S.C.405G))

Àli clairns for supplçmcnr¡l s€Éurity incomc paymf,ts bassd upo¡ dlsabiliry frlcd r¡ndc¡ Titls | 6 ofthc Soci¡l

Sæurity Act. ¿¡ amc¡rdod,

Allcfairnsfor¡ctirs¡cnt(oldagc)rndsu¡vivorÉcncfitsunderT|tlc2oÍthcSocial SÉcurityful,astmc¡dd. (42

u.s.c (Ð)

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Case 8:08-cv-00668-JÊrtr" Document 1 Filed OEtGt2OOe Page 3 of 18t¡.

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Ãiiiöfr,Ërfri:þïBþ (cA sBñ 2s4eo4)Assistant United States Attqrney

300 N. Los Angeles StreetFederal Buildiñe' Room 72\l-Lói Anselés. Cãfifornia 90012Teleohone: (213\' 89 4 - 65 5 tFacsimile: Ql3)'894-01_15 . .

B-mailï ândrewít.príb e@u s d oj . go-v

OMAS P. O'BRTENnited States AttorneyANDRA R. BRO'W}I

Assistant United States AttorneYChief. Tax Division

UNITED STATES OF AMERICA

Attorneys for the United States of America

LNITED STA]ES DISTRICT -C-QIBIcÉÑrR q.L DtStnict OLç4L^-FORNIA_SOÜTTIERN

DIVISION

Plaintiff,vs.

COMCO MANAGEÀ4EI'-IT- -Fffifi+êäb'5f85ffT8ñI-ÁÑAGENTENTCORPO-BÂTI9N;

#É:JåET,t,ÆPlËç'?bwy_.SBnWcn ÕoRP.; and PCCE, Inc.,

Case No.:

Complaint to Reduce- Federal IncomeTax Assessments to Judgment ang ro

mf ;.t#nlP"qgråf gIt'#åir¡¿;:aLiability.

Defendants.

The United States of America, Plaintiff, for its complaint against Comco

Management Corporation; Conoord Funding Co., LLC; Metco Managempnt

Corporation; Monex Credit Co.; Monex Deposit Co.; Newport Service Corp'; and

PCCE, Inc., Defendants, states:

Jurìsdìction & Venue

1. This is a civil action to reduce federal tax assessments to judgment

and to recover from entities liable for these unpaíd federal tax liabilities. This

court has jurisdiction under 26 u.s.c. Ë 7402 and 28 U'S.C, $$ 1331' 1340, and

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Case 8:08-cv-00668-JVS-MLG Document 1 Filed 06/13/2008 Page 4 of 18

UNITED STATES DISTRTCT COURTCENTRAL DISTRTCT OX' CALIFORNIA

NOTICE OF ASSIGNMENT TO I]NITED STÀTES MÀGISTRATE JTIDGE F'OR DISCOIIERY

Thjs case has been assigned to Dishiot Judge James V. Selna and the æsigned

discoveryMagisuate Judge is Marc Goldman,

The case number on all documents filed with the Court should read as follows:

SACVO8 - 668 ,fVS (Mi,Gx)

pursuant to General Order 05-07 of the United States Districi Coutt fol the Central

District of California, the Magistrate Judge has been designated to hear discovery related

motions,

Atl discovery related motions should be noticed on the calendar of tlre Magistrate Judge

:::::::::::::::^--^-*::::::----:::-:-::=::::::NOTICE TO COUNSEL

A copy of thts nolice must be seryed wlth the summons and complalnt on alt dafendants (lf a removal action is

liled, a copy of thls nÒtice musl be seved on all plalntlffs).

Subsequent documents must bs flled at the followlng location:

f I Wostorn Dlvlslon tXl Southern Dlvlsfon [l East€m Dlvlslon

" ãf z H. Sprlng St,, Rm. G:B '- ''

411West Fourth St., Rm. 1.053 - 3470 Twetfth St., Rm. 134

Los Angetes, CA S0012 santa Ana, cA 927014516 Rlverslde, cA 02501

. Fâ¡lure to fìle at the prcper focation wlll result in your documents being returned lo you.

cv-ls (03/06) NO'flCE OF ASSTGNMENT rO UNITEO STATES MAGISTRATE JUDGE FOR DTSCOVERY

i1Ii!!. :

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lii.lt,l1ì:lr:Case 8:08-cv-00668-JVS-MLG

United States Attorneyrs Omce

SANDRA BROWN, Chiel Tax Division

ANDREV/T. PRIBE, AUSA300 N. Los Angeles Street, Room 721I

Los Angeles, CA 90012

Document 1 Fited 06/13/2008 Page 5 of 18

JæcI)æO

UNITED STATES DISTRTCT COIJRTCDNTRAL DISTRICT OF CALIFORNIA

TINITED STATES OF AMERICA

I.AINTIFF(S)

Comco Managcment Corporation; Conco¡'d Funding

Co., LLC; Metco Management Corporation; Monex

Credit Co,; Monex Deposir Co.; Nervport Service

Corp.; and PCCE, Inc., DËFEND^Nr(s),

CASE NI,IMBER

SACY08-00668 JVS (MLGx)

SUMMONS

TO: THE ABOVE-NAMED DEFENDANT(S):

you ARE HEREBY SUMMONED and required to file rvith this court and serve upon plaintiffs attorney

ANDREWT. PRIBE rvhose address is:

United States Attorney's Office

300 North Los Angeles Stteet,

Room 721 I Tax Division

Los Angeles, CA 90012

Tel: (2 I 3) 894-655 I Fax: (2 I 3) 894-0 I I 5

an answef to the E complaint. I amended complaint E countetclaim fl cross-claim

rvhich is herelith ,.ru.d upon you tu¡ttlinj?q- days aftel service of this Summons upon you, exclusive

of the day of service. lf you faiíto do so, judgement by default rvill be taken against you for the relief

demanded in the complaint.

Clerk, U.S. District.Côult

JUN I 3 2.008Dated:

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Case I :08-cv-00668-JVS*MLGI

Filed 06113/2008 Page 6 of 18t

Document 1

Ãñöfr,Ewi:Þ-RI-BE (cA sBN: 2s4eo4)Assistant United States,AttqrneY

300 N, Los Angelqs Strce,t^ - -pe¿erãt Buildiri'e, Roo¡n 1?l ] -Lóã Aneeies, Cã[ifo rni4 PP0I2Tèl-eóhò"ne : (ztt) 89 4' 6ts-rFãôümiie: (2t3)'8e4-0l1s . .

E-mail : andrew. t.pribe(gl'usooJ' gov

OMAS P. O'BRIENnited States AttorneYÁi'rDRÀ R. nnow¡t

ÃJsjstlnt Unlted States AttorneYChief, TaxDivisio-n-

LTNITED STATES OF AMERICA

Plaintifflvs'

coMco MANAGEMENT--

Attorneys for the United States of America

's4'.-#$ffi*#,ffiffi8ffi

F,ffisg$êE8ll,"s5trtr.a -îøÁñÁGÈuENr coRP oBAIi-çiïöi'är.x õnpbtr co. : MoNEXffiffiffitsffitøONBx CREDIT C-Q.IM

Case No.: SACV08-00668 JVS (MLcx)

Complaint to Reduce- Federal IncgmeTax Assessments to- Judgqent ano roImp ose Altpr pgo, Single,+rterplJ9 9LSuCcessor-in-Interest, and I ranslereeLiability.9N;

bBposlr co.;NEwEQBTSñRVfcE ÕoRP.; and PCCSER ÕÕRP.; and PCCE, Inc.,

.- Defendants.

The tlnited States of America, Plaintiff, for its complaint against Comco

Management Corporation; Concord Funding tt ,ltllMetco Management

corporation; Monex credit co.; Monex Deposit co.; Newport service corp'; and

PCCE, Inc., Defendants, states:

Jurisdiction &, Venue

1. This is a civil action to reduce Gderal tax assessments to judgment

and to ïecover from entities liable for these unpaid federal tax liabilities' This

courr has jurisdiction under26 U.S.C . ç7402 and}ïu.s'c. $$ 1331, i340, and

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CaseB:08-cv-00668-JVS-MLG Documentl Filed 06113/2008 Page 7 of 1B

1345,

2. This action is brought at the direction of the Attorney General of the

united states and at the request and with thç authortzatíon of the chief counsel of

the Internal Revenue Service, a delegate ofthe Secretary ofthe Treasury, pul'suant

to 26 U.S,C. $$ 7401 and7403.

3. Venue for the action is within the Central District of California under

28 U.S.C. $$ 1391(b) and 1396 because all Defendants reside in this district for

purposes ofvenue.

Defendønts, other relevønt entítíes, frnd terminology'

4. Cornco Management corporation is a california corporation and has

its principal place of business'at 4910 Birch streeL NewportBeach, california'

5. Concord Funding LtC is a California limited liabitity company with

its principal place of business at 4910 Birch Street, Newport Beach, California'

6. Monex credit company is a califomia limited pæ'tnership with its

principal place of business at 4gI0 Birch Street, Newport Beach, Califomia'

7. Monex Deposit company a california limited partnership with its

principal place of busines s at 4910 Birch street, Newport Beach, califomia"

_ 8. Monex International, Ltd,, was a catifornia corporation that merged

into Monex Corporation. Monex corporation changed its name to PCCE' Inc'

Monex International, Ltd., had its principal place of business at49l0 Bilch street'

Newpor'É B each, California'

g, Metco Management corporation is a caiifornia corporation and has

its principal place of business at 49\}Birch street, Newport Beach, california'

10.PCCE,Inc.,(f,ftclaMonexCorporation)istheSuccessorofMonex

International, Ltd., and has its principal place of business at either 4910 Birch

Street, Newport Beach, California, ot2|}2Busi¡ess Center Dtive,# 220L' Irvine'

California,

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Case B:08-cv-00668-JVS-MLG Document 1 Filed 06/13/2008

1980 $35¡356587,7t $s,422,t1t'8s 925,934A15'52 $52E53'213'09

1981 $29,S00,45J.33 $o $29,800'455'33 $56'136348',s2

1982 $53,861,309.20 s0 $53'861',309'20 993'822'426'47

1983 $128,499.04 $0 s1l29'449'04 $50'482'49

1984 $24018,0S7'31 $0 $24,018'08?'3¡ $33¿45',880'30

Total outstanding balance (as of June 15' 2008):

-3-

Page I of 18

l l. Newport Service Corporation is a California corporation with its

principal place of business at4g|}Birch street, Newport Beach, califomia.

IZ. The term.,federal tax liabilities" ïefers to the tæc liabilities specified

in Count I and in parqgraph40 of Count IL

13. The term.Monex Enterpríse" refers to the collective activity ofthe

entities specified above in the leveraged sale of precious metals to the public'

14, The term "New Monex Entities" refers to comco Management

Corporation, Concord Funding LLC, Metco Management Corporation, Monex

credit company, Monex Doposit company, and Newport seryice corporation'

15, The term'?r'incipals of the Monex Enterprise" refers to Louis

Carabini and Michael Carabini. Other Prinoipals of the Monex Entèrprise are

beiieved to include Kimbrough Bassett, John Tate; and Gregory'walker'

ctaim ro reduce f.d.,çP#f,å.r**t. ro judgmenr

16'TheUnitedstatesreallegesparagraphltlu.oughl5.

l7 . On June 15, 1998, a delegate of the Secretary of the Treasury timely

mad.e assessments of federal income tax againstMonex International' Ltd'' for the

years 1980, 1981, 1982, 1983, and 7984' The total balance of those assessments'

plus statutory accruals, less credits, is:

Year Total Total 4ssessed Accrued Acorued ToFtAssessmenrs ôiÈat' sãruo.ó- rnreresr $äll*"* 3ilffi.J$:

PeialtY 2oo8)

s0 $83,787'628-91

$940,288.?5 $86,87?,092.60

sljrI,?38.?s 9r49,09sfi4.42

$2,568.50 $181,500.¡3

$1,03r,498.?5 s58,295,466'36

9378,237,L62,42


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ls.Properandtimelynoticeanddemandforpaymentofthesetax

assessments has been made on Monex International' Ltd'

19. Despite timely notice and demand for payment of these tax

assessments, Monex Intemational Ltd, has not fully paid the assessrnents'

20. Monex Intemational merged into Monex Corporation'

2|.ThroughthemergerofMonexlnternationalintoMonex.Corporation,

Monex corporation assumed the liabilities of Monex International'

22. Monex Corporation changed its named to PCCE' Inc'

23. As successor to Monex International, Ltd., PCCE, Inc., is liable for

the federal tax assessments'

24. The united states is entitled to judgment against PccE' Inc'' in the

amounfof$378,237,L62.42throughJune15,2008,plussubsequentstatutory

accrualsinoludinginterestandpenaltiespluscostsandexp'enses.

COUNT IIclaim to impose ulteùe"gõ isìf,fle-enterprise liability

GeneruI øllegations

25. Tlre United States realleges paragraphs I through 24'

26.TheNewMonexEntitiesareliablefortheunpaidfederaitax

assessments of Monex International, Ltd', because they are the alter egos of and

constitute a single enterprise with Monex Intemational' Ltd'

2T.TheNewMonexEntitiessharecommon.ownershipandinterestwith

MonexlnternationaibecauseLouisCarabiniownedandcorrtrolledMonex

International and owns and controls the New Monex Entities'

2S.RecognitionofthecoqporateseparafenessoftheNewMonexEntities

would be unjust as to tho United States because:

a. Principals of the Monex Enterprise began the New Monex

Entitiesirranattempttoescapeliabilityforthefederaltax

Case 8:08-cv-00668-JVS'MLG Document 1I

Filed 06/13/2008 Page 9 of 18

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CaseS:08-ov-00668-JVS-MLG Document 1 Filed 06/1312008 Page 10 of 1Bf

li abilities of Monex International ;

,

principals of the Monex Enterprise sought to divelt future

revenues of the Monex Enterprise away from Monex

lnternational and into the New Monex Entities in an attempt to

shieldsuchfuturelevenuesoftheMonexEnterprisefrom

exposwe to the federal tax liabilities;

In theil dealings with the general public, Principais of the

Monex Enterprise sought to blend together Monex

International md the New Monex Entities in an effort to

capitalizeon the name, history, and goodwill of Monex

International while using the purported oorporate separatgness

of the entities to shield proceeds from the Monex Enterprlse

û'om exposure to the federaltax liabilities'

Principals of the Monex Enterprise used the resources of

Monex International in furiherance of,the Monex Enterprise

whiledivertingtheproceedsoftheMonexBnterprisetothe

New Monex Entities.

Principals of the Monex Enterprise fragmented the Monex

Bnterprise into interdependent but separate entities in an effort

toshieldtheproceedsoftheMonexEnterprisefromexposure

to the federal tax liabilities'

S r.tpp o r tìn g all eg ati o ns

TheContínuingTaxLiabilítiesofMonexlnternatíonal

29..WhenthePrincipalsoftheMonexEn.terprisetransferredtheMonex

Enterprise from Monex lntetnational to the New Monex Entities' they were awal'e

of significant exposure for federal tax liability of Monex International'

30'FromlgS0tolgss,Monexlnternationalengagedinanabusivetax

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Case B:08-cv-00668-JVS-MLG Document'1 Filed 06/13 I2OOB Page 1 1 of 18

shelter by which they reported and paid less tax than was due.

31. In March !982, after an IRS audit, the IRS issued a notice of

proposed defrciency (commonly known as a "30-day letter") to Monex

Intemational for years tgz2thtough L975 for about $5.8 million (not including

interest and penalties).

32. In 1986, the United States Tax Court issued its deciÉion in Glass v'

Commíssioner,87 T.C. 10S7 (T'C' 1986)'

33. In Glass, the Tax court disallowed purporied losses on straddle

transactions on the London Metal Exchange because the transactions were shams

without economic substance.

34. The abusive tax-shelter t[ansactions engaged in by Monex

International in igg0 through 1gg4 were substantially similar to the abusive tax-

shelter ftansactions that were the subject of the Glass case.

35. In January 1988, aftel an IRS audit, the IRS issued a 30-day letter to

Monex International for years 197t6 to 7979 stating the IRs's determination that

Monex International had a federal tax defrciency of about $1'8 mïllion (not

including interest and penalties)'

36. In August. 1988, after an IRS audit, the IRS issued a31'dayietter to

Monex International for years 1980 and 1981 stating the IRS determination that

Monex International had. a federal tax deficiency of about $51'2 million (not

inctuding intet'est and penalties)'

37, In January lggl,the IRS issued a statutory notice of defioiency to

Monex International stating the IRS determination that Monex Internationalhad a

federal tax deficiency of about $6,3 million for the tax years l972thtough1979'

38. In April 1990, Monex International filed suit in the united states Tax

Court regarding the tgT2thlough 1979 deficiencies'

39. This 1990 Tax court suitwas notresolved until March L995'

40. Regarding the 1990 Tax court suit, the Goveil:¡rrent and the MÖnex

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Case B:08-cv-00668-JVS-MLG Document 1 Filed 06/1312008 Page 12 ot 18

International stþulated to a determination of deficienci.es for the 1974 and 1978

tax yearS. The Tax Court entered judgment pursuant to the stipulation and these

defrciencies were assessed in 1995'

4|, In August Iggz,the IRS issued a statutory notice of deficiency [o

Monex International stating the IRS determination that Monex Internationalhad a

federal tax deficiency of abovtslTl.4miilion (nót including interest and

penalties) for tax years 1980 througþ 1984'

42.InOctober'lggl,Monexlnternationalfiledsuitintheunitedstates

Tax Court regarding the 1980 through 1984 deficiencies'

43. This 1992 Tax court suit was not resolved untit Febl'uary 1998 when

the Govemment and Monexlnternational stipulated to a determination of

deficiencies fol the 1980 tkough 1984 tax years'

44'TheTaxCourtenteredjudgmentinFebruarylggSpursuanttothe

stipulation which resulted in the tax assessments for the 1980 through 1984 yeæs

which are atissue in this case'

45. A suit in the Tax court generally lesüains the IRS frotn assessing the

tax, levying on pl'operty, or filing suit to collect the deficiency'

i!:F;rcit#n;tffi ,#U";níï{if,"rtf í,titlf"fr"í,*ratestructuretoavoíd

46, The Monex Enterprise is e¡rgaged in the leveraged,sales ofprecious

metals to the general public. The Monex Enterprise makes money fi'om their

customers through commissions, fees, monthly interest, and service charges'

4T.Beginninginthelatelg80sandcontinuingtbroughtheearlylggOs,

the Principals of the Monex Enterprise transfeHed the operation ofthe Monex

Bnteqprise from Monex International to the New Monex Bntities in an effort to

avoid exposure of the proceeds from the Monex Enterprise to outstanding federai

tax liabilities,

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CaseS:08-cv-00668-JVS-MLG Documentl Filed 06/:13l20OB Page 13 of 18

48. Monex Deposit Compæry and Monex Credit Company are California

Limited Partnerships formed in 1987 and constitute the core of the New Monex

Entities.

49. Monex Deposit company engages in the retail sale ofprecious

metals,

50. Monex Credit Company provides financing to customers of Monex

Deposit company in the leveraged purchase of precious metals.

5 1, Newport Service Corporation provides the other entities of the Monex

Enterprise with all adminTstrative, data processing, persorunel, accounting, legal'

purchasing and other operational services'

52. concord Funding co,, LLC, is a conhnlled entity ofMonex Deposit

Company and Monex Credit ComPanY'

53. concord Funding co., LLC, is integrally tied to the Monex Enterprise

ttu.ough various agteements enteted into by Concord Funding, Monex Deposit

Company, and Monex Credit Company in 1995 and2002'

54'ComcoManagementCornpanyisthegeneralpartnerofMonex

Deposit CornPanY.

55. Metco Management company is the generai pætner of Monex credit

Company.

56. Although Louis Caribani owned and controlled Monex International

and owns and controls the New Monex Entitiês, there wère no mutual equity

interests as between Monex Intetnational and the New Monex Entities'

57. Begiruring in 1988, employees of Monex International were shifted to

Newport Service CorPoration'

58. By 1990, Monex International had no employees'

59. During and around 1991 many of the employees were shifted from

NewportServiceCorporationtoMonexDepositCoiporation.

60. The Monex Enterprise used the same telephone numbers-800-854-

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CaseB:08-cv-00668-JVS-MLG Documentl Filed 06/1312008 Page 14 of 1 I'I

3361 and (7t4) 752-14l0-both before and after the shift of the Monex

Enterprise frofr} Monex Intemational to the New Monex Entities'

61,. The Monex Enterprise used the SAme office space-4910 Birch

Street, Newport Beach, Califomia-both before and after the shift of the Monex

Enterprise from Monex Intemational to the NewMonex Entities'

62, The Principals of the Monex Enterprise controlled the assets of both

Monex Internatiorral and the New Monex Entities'

63. The Principals of the Monex Enterprise transfeffed the goodwill of

Monex International and the Monex Enteqprise to the New Moirex Entities'

64. In promotional matetials believed to have been used by the New

Monex Entities in June 1990, Monex credit company and Monex Deposit

Cornpany were identified as being "affiüate companies" of Monex International'

Lrd,

65. Since at least December Lggl,Monex Deposít Company-through its

website monex.corn-has sought lo capitaïize on the name' history' and goodwill

of the Monex Enterprise from long before the existence of the New Monex

Entities.

. 66. In Decemb er 1996,Monex Deposit Company on its website

represented that the "Monex group of companies have served the preoious metals

investing public since 1967." It stated: "Monex affiliated companies have'been

offering precious metals invesünents since tg67 ' Mott"* Deposit Company

(i\DC) and its affiliates have executed hansaction with customers totaling over

$i4 billion."

67, In August 2006, Monex Deposit Company repr.esented on its website:

,,Monex is the largest and oldest investment frm offering precious metals to the

individual investor and as such we havo products and programs that we believe æ'e

unique in the industry. Our 30-year history is a testimonial to the fact that we

know this business and provide a real service to the ínvesting public"'

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CaseS:08-cv-00668-JVS-MLG Documentl Filed 06/13i2008 Page 15 of 18

68. In August 20o6,Monex Deposit comp4y fepresented on its website:

"Monex has the experience, expertise and resources to setve most any precious

metals investorls needs, Since 1967,weIl over one hundred thousand investors

have purohased billions of dollars of gold, silver, platinum and palladium bullion

and builion coins from Monex.'t

69. In February 2007,Monex Deposit Company represented itself to the

public on its website as being "Amelica's most tlusted name in precious metals for

more than 30 Years."

T0,InFebruary200T,MonexDepositCompanyonitswebsite

represenied that the'Monex group of companies was founded by Louis E'

Carabini in 1961. . . ." 'For over 30 years, the Monex companies have been

America,s gold and precious metals investment leader." "Today, three generations

of the Carabini family are now working with the Monex companies, including

founder.Louis Carabini . . . his son, Michaol, . . ' and his daughter, Christina' In

addition, more than 20% of Monex employees have been with the cornpany for a

decade or more . ' . many of them for ovet' 25 yeats'"

71. The united states is entitled to judgment against comco Managernent

corp,; concord Funding, co. LLC; Metco Management corp'; Monex credit co';

Monex Deposit co.; and Newport selvice corp. in tJre amount of $378,237,162'42

through June i5, 20o8,p1us subsequent statutory accruals including interest and

penalties plus costs and expenses because they are the alter egos of and constitute

a single enterprise with Monex International' Ltd'

COUNT ITI

claimtoimposesuccessor.in-interestliabilify

T2,TheUnitedstatesreallegesparagraphslthroughTi'

73, The New Monex Entities ar.e liable for the unpaid federai tax

assessments against Monex Intemational, Ltd', because they ar.e the successOrs-in-

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Case 8:08-cv-00668-/VS-MLG Document'1 Filed 06llUZA08 Page 16 of 18

interest to Monex Internatiortal, Ltd.

74. The New Monex Entitíes assumed the Monex Enterprise, and its

employees, location, phone numbers, and goodwitl during the late 1980s and earþ

1990s withoui providing fair conÉideration to Monex Intemational'

75. Through the conveyance of the Monex Enterprise, the United States

is left without recourse against Monex International'

76. The United States is entitled to judgment against Comco Management

Corp.; Concord Funding, Co, LLC; Metco Management Co{p.; Monex Credit Co';

Monex Deposit Co.; and Neulport Service Corp. in the amount of 8378,237,762'42

through June 15, 2008, plus subsequent statutory accruals including intet'est and

penalties pius costs and expenses becausethey are the successors-in-interest of

Monex International, Ltd.

COUNT IV

Claim to imp o s e fraudulen t-conveyee lia bility

TT,TheUnitedStatesreallegesBalagraphslthroughT6.

7g. The New Monex Entities are liable to the United States for the assets

received fr'om Monex International and their proceeds because the New Monex

Entities are the frauduient conveyees of the Monex Enterprise, and its ernployees,

location, phone numbers, an<l goodwill from Monex International, Ltd'

79. The ttansfer of the Monex Entetprise, and its employees, location,

phone numbers, and goodwill during the late 1980s and earþ 1990s was made

with the intent to prevent the united states frorn reaching the assets and income of

the Monex EnterPrise

80. The transfer of the Monex Errterprise and its employees, location,

phone numbers, and goodwill was without receiving reasonably equivalent value

in return and while the Principals of Monex believed or reasonably should have

believed that Monex.Internationai would be without ¡esources to pay the

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Case 8:08-cv-00668-JVS-MLG Document 1 Fíled 06/13/2008 Page 17 of 18¡1

outstanding federal tax liability

81. The New Monex Entities assumed the Monex Enterprise, and its

employees, location, phone numbers, and goodwill during the late 1980s and earþ

1990s without providing fair consideration to Monex International'

82, The United States is entitled to judgment against Comco Management

corp.; concord. Funding, co,LLc;Metco Management corp.; Mbnex credit co';

Monex Deposit Co.; and Newpor[ Service Corp, as fraudulent conveyees of

Monex Intemation øJ,,Ltd.,and attaching the asseTs transferred and theit proceeds

in satisfaction of the Govemrnent's claim'

WHEREFORE, the united states of America.requests the court to:

(a) Enter judgment against PCCE, Inc., in the amount or.8378,237,162'42

as of June 15, 2008 plus subsequent statutory accruals including intefest and

penalties plus costs and exPenses;

(b) Find that Comco Managernent Corp.; Concord Funding Co,,LLc;

Metco Management corp.; Monex Credit co.; Monex Deposit co'; and Newport

service corp. aÍe the alter egos of and constituted a single entetprise with Monex

International, Ltd.;

(c)FindthatComcoManagementCo'p.;ConcordFundingCo,,LLC;

Metco,Management corp.; Monex credit co.; Monex Deposit co'; andNewport

S ervice C orp. are su cces sors- in-interest o f Monex Internation aI, Ltd';

(d)EnterjudgmentagainstComcoManagementCorp.;ConcordFunding

Co., LLC; Metco Management Corp.; Monex Credit Co,; Monex Deposit Co.; arrd

Newport service corp. in the amount of $378,237 ,162.42 plus subsequent

statutory accruals inoluding interest and penalties plus costs and expenses;

(") Fjnd that Comco Management Corp.; Concord Funding Co., LLC;

Metco Management Corp.; Monex Credit Co.; Monex Deposit Co'; and Newport

service corp. are fi'audulent conveyees of the Monex Enterprise from Monex

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Case B:08-cv-00668-JVS-MLG Document 1 Filed 06/13/2008 Page 18 of 18

International, Ltd.;

(Ð Enter judgment agairist comco Management corp.; concord Funding

Co.,LLC;Metco Management Corp.; Monex Credit Co.; Monex Deposit Co.; and

Newport Service Corp., for the assets transferred and their proceeds and attach

those assets and their proceeds in satisfaction of the Government's claim; and

(g) Order any further relief it deems just and appropriate'

DATED: June 13,2008 THOMAS P. O'BRIENUnited States AtËorneY

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