RECEIVERSHIPS: Mason Hill/Art Intellect
WAYNE KLEIN, RECEIVER FOR
Mason Hill/Art Intellect
PO Box 1836
Salt Lake City, UT 84110
Updates: Descriptions of Recent Developments
January 7, 2014: The Court today signed an order concluding the receivership estate. As part of the order, the court approved distribution of $46,803.77 to a group of victims, approved payment of partial attorney fees and receiver fees, and terminated the receivership. The distribution payments will be sent out in the near future. A copy of the order can be found here.
December 16, 2013: The Receiver filed a report and motion with the Court today. The combined motion and report summarizes developments in the case since December 31, 2012 and asks the Court for approval to: i) make a small distribution to 37 investors who received no properties or funds from Art Intellect, ii) grant a reduced fee application to the Receiver and his counsel, and iii) close the receivership. A copy of the report/motion can be found here. Closing Motion Exhibits A B C D E
December 6, 2013: The Court today approved the tentative settlement between the Receiver and Chase Bank. The Receiver will now implement that settlement. A copy of the Court order can be found here.
November 6, 2013: The Receiver today filed a motion seeking Court approval of a settlement agreement with Chase Bank. A copy of the motion can be found here.
September 11, 2013: The Court today entered a final judgment against Laura Roser in the SEC’s enforcement action. Roser consented to the injunction. A copy of the judgment of permanent injunction can be found here.
July 25, 2013: Pat Brody was sentenced today on his guilty pleas to felony securities fraud charges. The judge accepted the plea agreement between the government and Mr. Brody and ordered Mr. Brody to be incarcerated for 41 months, followed by 36 months of supervised probation. The judge imposed special conditions that will apply to the probation, including not having any financial accounts without the knowledge of his probation officer, not being self-employed, not working for any business that involves real estate or investments, and notifying any employer of his criminal conviction. Restitution of $331,075.36 was ordered to be paid by Mr. Brody to the victims. During the time of incarceration, Brody must pay at least $25 per month in restitution. After release, he must pay at least $250 per month.
June 15, 2013: An auction of vehicles and home furnishings owned by Laura Roser and Art Intellect will be held on Saturday, June 22, 2013. Here is a link to information about the auction. Investors and others are invited to come to the auction.
May 22, 2013: The U.S. Securities and Exchange Commission today entered an order barring Patrick Brody from any association with a broker-dealer, investment adviser, or other businesses associated with the securities industry. The order was entered by default after Brody failed to defend himself against the SEC’s allegations. A copy of the order can be found here.
May 20, 2013: The Court today entered an order approving Laura Roser’s agreement to transfer the home, its furnishings, and two vehicles to the Receivership. The Receiver will engage an auctioneer to sell the vehicles and contents of the home. A copy of the Court’s order can be found here.
May 17, 2013: Laura Roser has delivered to the Receiver title to the two vehicles she owns, a quitclaim deed to her home, and an agreement to allow the furnishings in the home to be sold. While the loan on the home is greater than its current value, the Receiver has found payments to Chase Bank that can be challenged. The Receiver filed a motion with the Court seeking approval of the agreement regarding the assets. A copy of the motion can be found here. The agreement with Ms. Roser can be found here. If the motion is approved, the Receiver plans to auction the assets.
March 6, 2013: The Court today issued a 50-page order granting summary judgment to the SEC. In the Order, the Court finds that Patrick Brody and Laura Roser violated the federal securities laws. The Court permanently enjoined them from future violations of the law and ordered them to disgorge $1.5 million. A copy of the order can be found here.
January 7, 2013: The Receiver today filed the Sixth Status report on developments in the case for the period from July 1, 2012 to December 31, 2012. A copy of the report can be found here.
October 31, 2012: A grand jury criminal indictment was issued today charging Pat Brody and Laura Roser with nine felonies. These include one count of conspiracy to commit mail and wire fraud, six counts of mail and wire fraud, and two counts of money laundering. A copy of the criminal charges can be found here.
August 21, 2012: The Receiver today (belatedly) filed the quarterly status report with the Court for the period ending June 30, 2012. A copy can be found here.
April 23, 2012: The Court today entered an order approving the settlement with BMW Financial Services.
April 17, 2012: The Court today entered an order regarding Laura Roser’s custody for contempt.
April 13, 2012: The Securities and Exchange Commission today filed a motion for summary judgment, asking the Court to find that adequate proof has been demonstrated that Roser and Brody violated the securities laws so a trial is not necessary. A copy of the motion is attached. The SEC also filed a 72-page memorandum in support of its motion and 23 exhibits. If the motion is granted, it will conclude the case. If the court determines that significant facts are in dispute, a trial date will be set.
April 13, 2012: Roser filed a notice of appeal of the Court’s order sending her to jail for contempt of court.
April 13, 2012: The Court held a hearing today to consider whether Laura Roser had purged herself of contempt. Ms. Roser had surrendered herself to the U.S. Marshal’s office prior to the hearing, pursuant to Court order. At the hearing, the Court ruled that she had not purged herself of contempt and ordered her to remain in custody until she had provided sufficient affidavits and supporting documents to demonstrate compliance with the Court’s earlier orders.
April 12, 2012: The Receiver filed today a copy of the status report for the first quarter of 2012. The report cites one settlement and notes that the Receiver’s primary activities relate to court proceedings and assisting government agencies.
April 3, 2012: The Court today issued an order requiring Laura Roser to surrender to the US Marshal’s office to be incarcerated for her continuing contempt of the Court’s order.
February 13, 2012: The Court denied a motion by Brody and Roser to allow an appeal of the order finding Roser in contempt of court. The ruling says that because no sanctions have been imposed, any appeal of that order is premature.
February 2, 2012: The Court today approved a second interim fee payment of $40,000.00 to the Receiver and his counsel. This is part of the fee application previously granted by the Court.
January 23, 2012: The Receiver today filed his third quarterly status report with the court. The Receiver also filed an application for a second interim award of fees for the Receiver and his attorney.
December 19, 2011: The Court signed an order affirming her prior ruling denying the motion by Roser and Brody to remove the Receiver. A copy of the order can be found here.
December 15, 2011: The Court approved a settlement between the Receiver and the LDS Church, to recover Mason Hill funds that were improperly contributed to the church.
Defendents Patrick M Brody and Laura Roser have petitioned for permission to appeal the preliminary Injunction Order. They are arguing that the investments were not securities.
December 9, 2011: The Receiver has reached an agreement with the LDS church and has filed a motion for the approval of settlement.
November 15, 2011: The Receiver has submitted a Special Interim Report to update The Court and investors on the progress of the Receivership.
Welcome to the Klein & Associates website! This page contains information regarding the Receivership: Mason Hill/Art Intellect. On this page, you will find:
- Updates: Descriptions of Recent Developments
- Copies of the Court Order Appointing a Receiver and other Court filings about the Receivership;
- Copies of Status Reports and other notices the Receiver will file with the Court;
- Copies of lawsuits the Receiver will be filing, seeking to recover funds;
- Information relating to tax treatment of Ponzi scheme losses; and
- General information about the Receivership.
1. Lawsuit by the SEC, Appointment of Receiver
- 01.07.2014 Order Approving Receivership Closing
- 12.16.2013 Closing Motion Report
- Closing Motion Exhibit A
- Closing Motion Exhibit B
- Closing Motion Exhibit C
- Closing Motion Exhibit D
- Closing Motion Exhibit E
- 03.06.2013 Order for Summary Judgment
- 04.13.2012 SEC Motion for Summary Judgement
- 12.19.2011 Order Denying Motion to Remove Receiver
- 11.15.2011 Court Order of Contempt
- 10.20.2011 Court Order Granting Preliminary Injunction
- 08.19.2011 SEC’s Proposed Findings of Fact on Preliminary Injunction and Contempt (including Answers to Interrogatories)
- 08.19.2011 Brody-Roser Proposed Findings of Fact on Preliminary Injunction and Contempt
- 05.18.2011 SEC Motion and Brief to Hold Patrick Brody and Laura Roser in Contempt
- 05.17.2011 Court Order Allowing Receiver to Inventory Assets
- 05.16.2011 Answer to Complaint by Defendants
- 05.13.2011 Brody Roser Contempt Memo
- 05.13.2011 Brody Roser Order to Show Cause
- 05.10.2011 Motion To Compel Depositions of Roser and Brody
- 04.18.2011 Order Appointing Receiver
- 04.18.2011 Complaint Mason Hill
- 04.18.2011 Temporary Restraining Order
2. Settlement Agreements
- 12.06.2013 Order Approving Chase Settlement
- 11.06.2013 Chase Bank Settlement Motion
- 04.23.2012 Order Approving Receiver’s Settlement with BMW
- 12.15.2011 Order Approving Settlement with LDS Church
- 09.16.2011 Court Order approving settlement with Seybold and transfer of one property
- 08.11.2011 Court order approving settlement with Hills and transfer of four properties
- 08.11.2011 Motion for approval of settlement with Seybolds
- 08.11.2011 Brief in support of motion for settlement with Seybolds
- 08.11.2011 Hills Order Approving Settlement
- 07.20.2011 Memo in Support of Motion for Order Approving Settlement and Transfer
- 07.20.2011 Motion for Order Approving Settlement and Transfer
- 07.20.2011 Proposed Order Granting Motion to Approve Settlement
3. Litigation by Receiver
- 05.20.2013 Order Granting Roser Asset Transfer Stipulation
- 05.17.2013 Motion for Transfer of Roser Assets
- 05.17.2013 Stipulation to Roser Asset Transfer
- 12.09.2011 Motion for Settlement LDSChurch
- 12.09.2011 Memo in support of Settlement LDSChurch
- 10.13.2011 Order on Receiver’s Motion for Roser Home and Florida Properties
- 09.02.2011 Memo in Opp to Roser’s Motion to Remove Receiver
- 09.02.2011 Reply Memo in Support of First Application for Fees
- 08.31.2011 SEC Memo in support of Receiver Application
- 08.31.2011 SEC Opposition to Remove Receiver
- 08.19.2011 Brody-Roser’s Motion to Remove Receiver
- 08.19.2011 Brody-Roser’s Brief Supporting Motion to Remove Receiver
- 07.18.2011 Motion for Order to Vacate Roser Residence
4. Receiver Status Reports
- 01.07.2013 Sixth Status report to the Court
- 06.30.2012 Fifth Status report to the Court
- 03.31.2012 Fourth Status report to the Court
- 12.31.2011 Third Status report to the Court
- 11.15.2011 The Receiver’s Special Interim Report
- 10.06.2011 Second Status report to the Court
- 07.30.2011 Initial Report: Mason Hill
5. Other Information and Communications
- 09.11.2013 Roser Permanent Injunction
- 05.22.2013 Patrick Brody SEC Findings and Sanctions
- 10.31.12 Criminal Indictment of Patrick Brody and Laura Roser
- 04.13.2012 Roser Notice of Appeal
- 04.17.2012 Court Order to Reply
- 04.03.2012 Order imposing punishment for Laura Roser Contempt
- 02.13.2012 Appeal Order Denying Motion
- 02.03.2012 Order Approving Fee Application
- 01.23.2011 Application for Second Interim Fee Award
- 12.15.2011 Order Approving Interim Fee Award
- 12.15.2011 Brody and Roser Petition for Permission to Appeal
- 08.19.2011 Brody-Roser Objection to Receiver Fee Application
- 08.16.2011 First fee application for Receiver and counsel
- 04.26.2011 Property Owners Letter
- 04.19.2011 SEC Press Release Mason Hill
On March 17, 2009 the IRS announced significant tax relief for victims of Ponzi schemes. The ability to take tax deductions for past years and future years has been greatly expanded. I have added information here that will help you understand the new tax relief and that your accountants and tax advisors can use in determining how to deduct losses from this scheme.
- Article from March 18 2009 Wall Street Journal
- IRS Revenue Ruling 09-09
- IRS Revenue Procedure 09-20
- Testimony To Congress By A Top IRS Official Explaining the New Tax Relief Procedures
This information is being posted for investor information. The Receiver has no opinion on how individual investors treat their investment for tax purposes. Investors are urged to contact their own tax professionals for advice on tax treatment of their situation.
04/18/2011 STATEMENT FROM THE RECEIVER
On April 18, 2011, Wayne Klein was appointed as Receiver for:
- Mason Hill
- Art Intellect, Inc
- Virtual MG
- Assets of Patrick Merrill Brody
- Assets of Laura A Roser
The appointment as Receiver was made by US District court Judge Tena Campbell. The case was filed by the Securities and Exchange Commission in Federal Court in Utah The Receiver is providing the following information that may be helpful to investors regarding the Mason Hill/Art Intellect Receivership:
What is a Receiver? A Receiver is a person appointed by a court to take control of companies or assets. This prevents any further dissipation or misuse of the assets and begins the process that hopefully will lead to recovering money that can be used to pay investors and other creditors. As the Receiver, it is my duty to gather and protect the assets of Mason Hill/Art Intellect. I am experienced in analyzing investment programs, having served as Receiver in previous cases, Director of the Utah Division of Securities, Chief of the Utah Attorney General’s Commercial Enforcement Division, and Chief of the Idaho Securities Bureau. I do not work for any of the parties in the lawsuits that have been filed.
What will the Receiver do now? The immediate tasks for the Receiver are: 1) locating the assets and records of the companies and transferring them to my control, 2) conducting an analysis of the company’s operations to determine where the funds were expended and determining what claims, if any, the company may have against third parties to recover more funds, 3) recovering any deposits in brokerage or bank accounts, 4) seeking to recover any improper payments made to others, 5) selling any assets of the company, and 6) recommending to the Court a plan to distribute funds the Receiver is able to recover. The Receiver expects to be able to take advantage of work already done in gathering and analyzing information.
When can I get my money back? How much? It is too early to say how much, if any money the Receiver will be able to locate and recover. The Receiver will analyze the records of the company, including bank records, and identify where assets might be. The Receiver will then seek to recover those assets. The Receiver also must evaluate claims against the company, such as investor claims. It will likely take many months to completely gather and evaluate this information. It is not possible to determine, at this early date, what funds, if any, will be located and returned.
How can I keep informed about what the Receiver is doing? The Receiver must file regular progress reports with the court. Those reports are public information and will be shared with investors. The Receiver will post these reports, copies of court filings, and other information about the receivership on its web site: http://www.kleinutah.com Investors are encouraged to check the web site for updated information.
How do the Receiver and his staff get paid? We are paid out of assets of the estate, generally from monies we recover. All payments must be approved by the Court.
What information will the Receiver want from me? The Receiver will be sending investors a form requesting information about your investments and asking for copies of documents you received from the company. If there is information you think the Receiver should know now, before he finishes his preliminary review of records of the company, you can send them to the Receiver at: Wayne Klein, Receiver for Mason Hill/Art Intellect, 10 Exchange Place, Suite 502, Salt Lake City, UT 84111. The Receiver can be contacted at (801) 534-4455 or via e-mail at email@example.com
|Wayne Klein, Receiver
PO Box 1836
Salt Lake City, UT 84110
Telephone: (801) 824-9616