profitable sunrise latest updates
OFFICIAL INFO FROM NJF-GIR SITE
The Easter Gift did not show up. So what do we do now?Spring is a time for new beginnings, and we are dedicated to do all that is possible to make our story together a successful one… no matter what. An Easter deadline came and went for participants in the ProSun Project. What happened was a combination of events.
A “Perfect Storm” of unexpected results occurred. There may be some of you who are wondering about Profitable Sunrise and others who need updates.
This website page is an overview designed to give you clarification as to what we have observed and also your options for moving forward.
We will start with some History… Facts… Warnings… Results, and our New Email Address! We also have info on your options titled : Should I file a Claim?WEBSITE NEVER CAME BACK – MONEY IS IN THE BANK
We watched the servers complet their migration to China, but then still the website did not go “live”. Maybe they were now corrupted by the release of the CyberBunker virus? No communication.
But time continued on to the Easter deadline – the final test of integrity when so many expected their first major reimbursement. But a “Perfect Storm” was brewing worldwide that could have played a major role in discouraging Profitable Sunrise’s future.
Some say that with all that was happening, Roman Novak and his brother said, “Forget it,” walked away, and disappeared. Maybe so…
The good news is that they left $ 11 million-plus dollars sitting in the bank accounts in the Czech Republic and the UK and there may be more… Recovery may be a slow process with overseas challenges.ATLANTA, GEORGIA… FEDERAL SEC FROZE THE ACCOUNTS OVERSEAS
The Atlanta Securities and Exchange Commission requested that the holders of the four bank accounts in the Czech Republic and the UK show up in court along with Roman Novak and his brother on the 15th of April, 2013. Nobody responded. The subpoena stated that they had 21 business days after they were served to respond to the court. We are not aware whether or not they have received the subpoena.
SHOULD YOU CONTACT YOUR STATE AUTHORITIES AT THIS TIME TO FILE A CLAIM?
The Federal Government, not the State government, has frozen the funds. NO funds will be released, reverse wired, or returned without the Federal Government’s guidance. If you file a claim for losing your money at the State level… you may be required to offer full disclosure to prove your case as you purchased an unregistered security according to them.
SHOULD YOU INSTEAD WAIT FOR THE FEDERAL GOVERNMENT’S GUIDANCE?
Since nobody can get to their resources without the Federal Government establishing their guidelines on how funds may be returned to worldwide, we have been advised to be patient and wait for their announcements. See below for some of the history of our group involvement.
NINETEEN GROUPS BEFORE OURS
Nineteen groups had results in Profitable Sunrise without complaint before ours was formed. Our Group Leader observed the company for seven weeks before carefully gifting seed money to friends and family to test the program.
A small committee of experienced colleagues then searched for any negative, valid data on Profitable Sunrise or Inter Reef Limited that would be of concern. None was found at the time.
The project appeared to align itself with a traditional business model of collateral lending, of which seemed viable.
Nobody had a clue that this project would not be “solid” and valid, as more information was relayed that the lending program began “six” years prior? We hope to see the real truth eventually.HOW WAS OUR GROUP WAS FORMED?
We started by viewing the company license, power of attorney, and corporate paperwork validating the company’s registrar’s office as being based in the UK. Next we looked at what other groups were saying about the program. We interviewed the Founder, Roman Novak, but as he was based in the UK, we could not meet him face to face. We were not permitted to view any loan business due to privacy issues, according to Mr. Novak.
Later it was apparent that their operation seemed to include other bank accounts worldwide. We also later discovered that we couldn’t find one leader that had actually been allowed to personally meet Roman Novak or his brother face-to-face.
WHY WAS A CHARITY FEATURED ON OUR WEBSITES?
All Profitable Sunrise Private Groups were required to have a group charity. It could have been any credible charity like the Red Cross, American Heart Association, or Feed the Children. It was decided to bring on board a young subordinate ministry that was under a church that had a 501c3 group status. This meant that the ministry (which was also a small church) would be under their guidance.
A Donate Button was available inside the back office of the Profitable Sunrise website. At first our Private Group encouraged a $25 donation to support the charity within the first 60 days of activation.
Soon after, it was posted that instead all donations were completely optional as there were many who were only able to give small change from third world countries.CHARITY CHURCH STATUS Our Charity Articles of Incorporation refers to ministry as a church. At no time did the F.U.M.I. or the Board of Directors have any financial gain from any donations, nor was any funds transferred to or from Profitable Sunrise into the USA. The USA based donations coming direct to the church ministry headquarters provided new jobs, saved homes from foreclosure, provided heat, food, and medical equipment.
CAN YOU HELP THE JESUS SAVES CHURCH? We would like to send some monies directly to the Philippines to buy them a drum set and other Praise Band equipment. They will celebrate an anniversary this month. The email to the contact for the Jesus Saves Church is Mark Bernal … firstname.lastname@example.org.
THE CHARITY & PROFITABLE SUNRISE WERE NOT CONNECTED
The Group supported the charity in the USA with credit card and check donations separate from the Profitable Sunrise website. This allowed the young church ministry to hire 1099 staff, create a benevolent fund, and offer donation campaigns. Those who were not a part of our Group supported the group charity through donations levels (Inner Circle, VIP and Chairman). Those donors received only free benefits from the ministry.
Those who participated in helping the charity got priority assistance and access to free donated leadership documents, conference calls and training webinars. All materials were designed at no cost. Eventually they were pulled to avoid public advertising and only free phone support, private webinars, and small private conference calls were provided.
BRINGING THE PROGRAM ON USA SOIL WITH BANK WIRES
In November, it was announced that people could use bank wires to submit their resources. It was a “nightmare” as people did not follow instructions, and calls were pouring in with complaints of disconnected funds, return wires, and expired paperwork. Most all was created by the individuals and bank employees who were not experienced with international wires. The Profitable Sunrise customer support was also overwhelmed with trying to solve the issues.
This was a red flag to our Group Leader, who soon released a statement that the our team office would not support or assistance with any wire transfers. Unfortunately, the challenges continued to increase and everyone got pulled back to help people try to resolve them. All the leaders assumed Roman had made all the legal arrangements since he now was dealing with the Global banking systems which created “full exposure” for his company. This exposure created understandable interest and concern by the banking world.
STARING AT A BLANK SCREEN
On March 13th, those who chose to participate in Profitable Sunrise ended up being concerned while staring at a blank screen on their computer. We were educated that Profitable Sunrise was the charitable arm of a collateral lenders group… guided by the founder himself, Roman Novak. We observed many before us who verified that the company was performing. Nobody had a clue of the “perfect storm” that was coming and has affected everyone.
THE BEGINNING OF THE PERFECT STORM
Our challenge started when a North Carolina Bank issued a temporary Cease and Desist to Roman Novak and Profitable Sunrise. It was announced for the first time that a State in the US claimed that Profitable Sunrise was selling unregistered securities. That opened a “can of worms” as right away we observed other online marketers creating their own stories about Profitable Sunrise to drive traffic to their sites.
OUR GROUP LEADER CLOSES OUR GROUP FROM NEW REFERRALS
Upon seeing the results of the North Carolina posting, our Group Leader emailed Roman Novak and demanded that he “block” each and every website in our group from being able to sign up any new participants. It was done immediately on March 5th, 2013 (which does not make sense that he would bother if he was really planning on “shutting it down for good” 9 days later).
DID THE SYSTEM ACTUALLY PAY THE DEPOSIT PLUS DAILY INCREASE IN 170 DAYS?
Our Group Leader’s 170 business day term had completed on March 9th, 2013, and the original $100 deposit plus the total remaining daily increase gathered and appeared in the “cash available” withdraw section, just as promised. But these funds could not be withdrawn through Solid Trust, as the withdraw feature no longer was active and the account was not yet qualified to do a wire withdraw. Based on the last positive conference-call message with Roman, it was decided to re-enter all of it back in for another 180 business days. All nine months of remaining benefit is still there and not available to this day. The charity was also not able to access $20,000 in donations in the charitable account when the site shut down.
A NEW TERM AND NEW GROUP LEADERSHIP
With the Term ended, it was decided to embrace the entire leadership team with a new Group name, “Global Impact Resource Alliance” GIR Alliance. The charity remained as the official charity although no funds were ever received in the USA from the offshore charity account. USA donations to the charity did create jobs, pay off mortgage payments, turn on the heat, feed families, purchase medical equipment provide online and in- person Bible studies and more… As we have participants representing many faiths and cultures, at no time was the Charity used to entice anyone to Profitable Sunrise, nor did people have to be “Christian” to participate.
WEBSITE NEVER CAME BACK BUT MONEY IS IN THE BANK
On March 6, an email was sent to all ProSun participants from Mr. Novak stating that he would only allow wire transfers so that everything would “comply with the IRS.” On March 11, when leadership had a private conference call to discuss plans for the future (due the recent NC Cease and Desist), Roman assured the group that he had everything under control and gave an overview of his future plans… which included upgrading the servers (which we saw being migrated to China online), increasing website security, hiring new customer support and increasing the amount of support available, assigning three new account managers to assist all of us, and opening a new account at a bank in Hong Kong.
After an email was circulated from what was believed to be ProSun Customer Support, the servers went down and the site did not come back in the stated 48 hours. It seemed to appear that they may have been corrupted by a huge Cyber Bunker virus that swept across Europe and Asia (see website links below). At the same time, the European Union attacked the Cyprus banks to pay off their debts. The government of Latfia fell, affecting those banks. Because the website was turned off, a world-wide communication blackout occurred which added more concern and resulted in more states and even countries posting warnings about Profitable Sunrise.
Some speculate that with all that was happening, Roman Novak and his team might have realized that too many factors had mounted against them for continuing with Profitable Sunrise, and they might have just walked away. On a positive note, Roman’s team left (so far) $11 million-plus sitting in the overseas bank accounts…which were recently frozen by the Federal SEC.
AFTER THE ATLANTA SEC FROZE THE ACCOUNTS OVERSEAS…
The Atlanta Securities and Exchange Commission requested that the holders of the four bank accounts in the Czech Republic and the UK show up in court along with Roman Novak and his brother on the 15th of April. Nobody responded, so they gave an extension of 21 business days after they are served for them to respond to the court. To our knowledge the subpoenas have not be served.
SHOULD YOU CONTACT YOUR STATE AUTHORITIES AT THIS TIME TO FILE A CLAIM?
The Federal Government, not the State government, has frozen the funds. No funds will be released, reverse wired, or returned without the Federal Government’s guidance. If you file a claim in your State, be prepared to prove yourself and allow access to your bank accounts, personal info and emails as a part validating you.
Some states are saying that all who participated are considered to have purchased an unregistered security.
SHOULD YOU INSTEAD WAIT FOR THE FEDERAL GOVERNMENTS GUIDANCE?
Since nobody can get to their resources without the Federal Government outlining a plan on how funds may be returned, we have been advised to be patient and wait for their announcements. Make sure you keep your wire documents and receipts. Visit http://search.sec.gov/secgov/index.jsp#query ResultsTop and type in Profitable Sunrise.FOR QUESTIONS…
NEW EMAIL… GIRteamnews@gmail.com
Be blessed and filled with great courage…
GIR Alliance Administration
UPDATE FROM NJF (GIR) Group
Dear GIR Alliance family,
THANK YOU FOR YOUR PATIENCEThank you for your patience in waiting for information. We empathize with each of you, as it has been extremely difficult for all of us to wait for ANY word from Roman, but receive no communication. We trust the following key bits of information will help fill in the gaps.THANK YOU FOR YOUR PRAYERS
We are glad to report that Nanci Jo Frazer’s son is doing very well and was able to attend a college event. Taylor was chosen out of 80 students to be one of 8 to present an inventive project before investors at BGSU. Unfortunately due to a skiing accident, Taylor spent 14 days in the hospital for surgery to remove a blood clot on his brain, so he could not present his project. The good news is that the investors approached him and invited him to return next year and are all readily offering support. The Frazer family is very grateful for the outpouring of kindness, support, prayers and the many, many positive phone calls.DEDICATED TO FINDING THE TRUTHAlthough Nanci has been by her son’s side through his and three hospitalizations and his recovery, she has also been fully dedicated to seeking out the truth and actively engaged in providing key information to the authorities which can bring the truth to the surface concerning the mysterious founder, Roman Novak, and his company. Although she has desperately wanted to communicate more with you, her legal counsel instructed her to not make any public statements while helping with the investigation. We have heard that her attorney is the former Chairman of the SEC.
THE SEC IN ATLANTA MEETS WITH PROFITABLE SUNRISE TODAYWe want to get you a quick update that there is a hearing/court ordered event today to be held in Atlanta, Georgia. Roman Novak and his associates working with him in Europe have been asked to appear before the powers at be. Their assets (our assets) have been frozen in the UK and the Czech Republic banks. This is an SEC event and you can read about it online if you wish.A VOICE FOR NANCI
Since Nanci cannot speak for herself, we wanted to take this opportunity to share with you some information that you may not know.VERY FEW WERE INVITEDMany are wondering if the leaders actually benefited from such a large group. We do now know that many people had up to 5-10 accounts, and that many people never activated their accounts. So although Roman allowed the number to look large, active participants are much smaller. That may explain why so few people bother to go to the Cyber Stalkers’ websites who are obsessed with anything to do with Profitable Sunrise. Not a whole lot of traffic happening over there at this point. It’s like watching the same movie over and over again until you just want to shut it off.We also have concluded that the numbers posted in the NJF Global Group back office were NOT representative of over $36 million in new deposits. Instead, it appears that the system may have allowed re-deposits to be added to the total (which can include daily interest & referral bonuses). This means that $1000 would appear to appear to the public eye to become a much higher balance by the end of a 170 business day term. This displayed total was therefore deceiving.NJF GLOBAL GROUPOut of the 32 Leaders in Profitable Sunrise, NJF Global Group was group 20. We do know that our group leader had no plans of falling into a 24/7 customer service job with Profitable Sunrise. When she started in July of 2012, she personally gifted support to a few friends & family members, and she only put in $100 to help her Charity.SERVING WITHOUT FINANCIAL REWARDWe are figuring that most of the people in Profitable Sunrise received her support without Nanci having any financial gain. Only one of the leaders you heard doing the conference calls and webinars was in her pay plan. She worked up to 18 hours per day supporting those needing help even though she has never met Roman in person. She was excited to see the charity grow even though she was never compensated from the charity. The point is, her story is not all that interesting and those who are making up false information are just hurting a Christian sister and her family. This needs to stop now. Please join us to protect one of our own who to this day picks up the phone to help. She has never stopped working for all of us. She has always been there for us.OUR CHARITY WAS REQUIREDWe also have learned that Ms. Frazer became a Group Leader because during the time of her due diligence in evaluating Profitable Sunrise, her upline was not available to answer questions due to an illness in the family. The man who referred her finally introduced her to Roman Novak by phone, at which time Roman invited her to be a group leader. She actually believed Roman’s statements that he cared about helping her Charity. The Charity she recommended was in no way affiliated with Profitable Sunrise other than being advertised as an option on the website. Ms. Frazer believed that Profitable Sunrise was actually a real collateral lending company, as she never was shown that it was not. Many professional business people joined in validating their understanding of this as well.Many donated to the Charity eventually by clicking the Donate button in the Profitable Sunrise back office, the board of directors for your Charity chose NOT to pull any funds into the USA. Therefore… the Charity has never received any funding from Profitable Sunrise donations to this day.STOP THE CYBER STALKERS & BULLIES
We ask that you help us to clean up the internet from those using our leader’s photos and endangering their families by reporting You Tube Videos, websites and blogs to our office so that the appropriate legal action can be taken. Cyber Bullying and Cyber Stalking is a Federal Offense and is not tolerated by the credible hosting sites and search engines.WHAT’S GOING ON TODAY / WHAT’S AHEADRight now quarterly tax reports are being prepared. We hope to bring some very exciting news of some new developments soon! FocusUp Ministries will NOT be renewing any relationship with Profitable Sunrise or any affiliate companies but will continue to assist supporters of the Ministry.BEAUTIFUL BILLEE PROJECT UPDATE:THANK YOU for your generous support of your Charity, for the Glenn and Kerri Wynen family, and for their beautiful Billee and three other daughters. I am happy to report that you we were able to send $6749.80 to help them! THEY ARE S-O-O-O-O-O GRATEFUL, and we are too. Glenn is now back home, still recovering. Please continue to pray for each member of the family as they face each day, for God’s grace, peace and provision. May God bless you bountifully in return.PLEASE PRAY FOR THE RIGHT RESULTWe want to let everyone know that we have been praying for and thinking about all of you as each day has passed without word from Profitable Sunrise. It is time for the truth to come forward for all of us.We look forward to hearing the real story as to exactly what we all have been experiencing here. Members of our group have hired those who can help investigate all this to help us have the real facts and a positive outcome. Please be supportive of each other as we move forward together.
We are all wanting to recover and move on. We look forward to see soon how we can retract funds back from Europe.We will be in touch with you again as we are able to communicate verified truth.The GIR Alliance Admin Team
This update is to show that they have actually changed the server.They are not claiming it falsely.I know many of you thinking that they are just making excuses.But the reality is that they have changed the server on 16th march.Changing server and its database of whole members is not easy task.
Here is the screenshot of the actual detail of servers.
Now what you say about this.Roman is actually doing his work.We should wait and support his effort.Hope for good.
This is the update of recent conference call
Conference call Highlights
Here are my notes for the same call… Hope this helps !
Call by Mike Artis and Tony
Conference call Summary:
We are ALL GOOD!!!
This is based on several calls within the last 24 hours with people I’ve spoken to… whom spoke with Roman.
We are about to go back up
Are servers are up… all 6 main servers are working…
New website will be similar
and all our accounts will be with in new site.
Easter gift is good !
Best guess is some time this weekend by Sunday night… Before Monday compounding starts.
We will be called a Private International Business Community, with a new definition as to how we represent ourself.
Servers are in two very safe places to address security issues Hong Kong is the safest places to be!
Chatter about negative info on us is wrong… We haven’t done anything wrong and we are changing to comply.
Roman is making it better, give him credit…
Lots of rumors are impacting
a really good people There are no facts or evidence we are not doing anything wrong. We are not selling securities. We are a group of individuals with strong values and purpose. We are not going to be pushed around or bullied by media Gurus.
Expect more restrictions with in company…
These corrections that are currently taking place have already been in the works, prior to the issues at hand.
Let’s look forward to this weekend and the new web-site.
Next weeks Confrence call, we can compare notes of the new system. Again, all is good !
Profitable Sunrise is not falling apart… Or taken down…
Look forward to a promising future
Bank wire will be the only way to transfer funds… We’ll see when sight is back up about E currency options.
Where are our funds? Funds are in loans and how the interest is paid out.
What about Easter Gift?
Easter Gift will be in available balance.
They are also working on E-check system
Interest will be paid for all banking days we were off line.
May be changing name… because no advertising allowed and to avoid all adds and banners that are currently out there already.
Empty accounts may be gone…
Jim Paris,the guy who blame Mr.Roman,Group leaders and promoters that they are involve in this scam is himself involve in many scam cases.
Some of the cases in which he is involve are-
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
D. C. Docket Nos.
In Re: JAMES L. PARIS,
JAMES L. PARIS,
UNITED STATES OF AMERICA,
Appeal from the United States District Court
for the Middle District of Florida
(August 27, 2007)2
Before BIRCH, DUBINA and CARNES, Circuit Judges.
James Paris, a debtor in a case filed under Chapter 7 of the Bankruptcy
Code, appeals the grant of summary judgment against him in favor of the Internal
Revenue Service in an adversary proceeding he brought to determine the
dischargability of trust fund recovery penalties that had been assessed against him
under § 6672 of the Internal Revenue Code. Those penalties were assessed against
him as responsible person who willfully failed to pay employment taxes owed by
Paris was the owner, president, and registered agent of James L. Paris
Financial Service, Inc. Paris had the authority to hire and fire employees, open
business accounts, and direct payment of corporate bills. Paris hired Carmen Paris,
his brother, to be the corporation’s vice-president and accountant, a capacity in
which Carmen served until he was terminated in 2002. Carmen was an authorized
bank signatory for the corporation and signed its quarterly federal tax returns for
the periods ending in March 2000, June 2000, December 2000, March 2001, June
2001, and September 2001. Paris alleged that Carmen embezzled money from the
corporation and stole company records, and, that as a result of Carmen’s misdeeds,3
Paris was not aware of the payroll tax deficiencies until Agent Rican, of the IRS,
contacted him on June 8, 2002, shortly after Carmen’s dismissal from the
corporation. Paris admitted that, after learning of the tax deficiencies in June 2002,
he paid various expenses, such as payroll, rent, supplies, and utilities instead of
paying the tax deficiencies. The IRS assessed trust fund recovery penalties against
Paris, pursuant to 26 U.S.C. § 6672, for payroll taxes that were withheld from the
wages of the employees of the corporation, and not paid to the IRS from June 2000
through December 2002.
Paris filed motions to compel disclosure of the actual name and location of
Agent Rican and to compel Agent Lawson, the current IRS agent on the case, and
Carmen to attend depositions. The bankruptcy court held a hearing on the motions.
At the hearing Paris conceded that he was a responsible person under § 6672,
argued that there was a question of fact as to whether he “willfully” violated the
statute, and stated that he needed Agent Rican’s deposition to establish that Paris
was not aware that the payroll taxes were not being paid. The bankruptcy court
denied the motions to compel and granted summary judgment in favor of the IRS
on the issues of liability and dischargability. The court found that Paris willfully
violated the statute as a matter of law because on June 8, 2002 he became aware of
the outstanding tax liability and thereafter wrote numerous checks to other4
creditors. The court made this finding despite Paris’ assertion that his payments to
other creditors represented an effort to keep the corporation going so that he could
eventually pay the taxes. Paris appealed and the district court affirmed the
bankruptcy court’s order in its entirety.
On appeal to this Court, Paris first contends that the bankruptcy court erred
by not allowing him to complete discovery before it granted summary judgment.
He argues that, because he was unable to depose the relevant witnesses, he could
not discover critical evidence that would have satisfied his burden to show that he
did not act willfully. Next, Paris argues that the only evidence that the IRS offered
regarding his liability were records prepared by Carmen, the embezzler. Those
records, according to Paris, overstated the tax liability because Carmen had
concocted the records to cover up his embezzlement by inflating the amounts he
had supposedly paid to the IRS, when in reality he pocketed the money. Paris
asserts that the bankruptcy court should have allowed him to depose Carmen to
determine the true extent of the unpaid employment taxes. Additionally, Paris
argues that, if he had been able to complete discovery, he would have been able to
ascertain why the fraud continued for so long without the IRS collecting money
We review, as the second level of appellate review of a bankruptcy court,
“questions concerning the scope or opportunity for discovery for an abuse of
discretion.” In re Piper Aircraft Corp., 362 F.3d 736, 738 (11th Cir. 2004)
(internal quotation and citation omitted).
The bankruptcy court did not abuse its discretion by denying Paris’s
discovery requests because his proposed inquiries were not relevant to the
determination of his tax liability under the relevant statute and would not have
changed the outcome of the summary judgment determination. The discovery
sought by Paris could not have yielded any evidence relevant to his liability for the
tax debt or the dischargability of the debt, the two issues before the bankruptcy
court on summary judgment. The only evidence relevant to these questions
concerned events after June 8, 2002, because it is undisputed that Paris learned of
the tax liability on that date. Any testimony from Agent Rican, Agent Lawson, or
Carmen concerning Paris’ knowledge of the corporation’s failure to satisfy its
payroll tax obligations before June 8, 2002 is irrelevant to the IRS’ theory of
liability in this case, which hinges on Paris’ conduct after he learned of the debt on
June 8, 2002. None of the questions Paris suggests he would have asked if given
the opportunity to depose Agent Rican, Agent Lawson, or Carmen, respond to the
IRS’ theory of liability. Accordingly, the bankruptcy court did not abuse its6
discretion by denying Paris the discovery he requested.
Paris next contends that summary judgement was improper because he did
not willfully violate § 6672. He argues that lawsuit he filed against Carmen in
state court, now an asset of the bankruptcy estate, demonstrates that Carmen
embezzled the funds that should have been paid to the IRS and that Paris did not
know that the taxes were not being paid. Paris also asserts that the IRS conceded
that he did not know about the tax liability until June 8, 2002. He argues that his
only connection to the unpaid tax liability was signing two delinquent tax returns
after he regained control of the corporation. Paris additionally argues that, had he
done what the IRS asked, he would have been guilty of securities fraud under 18
U.S.C. §§ 1341, 1348, & 1346. Finally, Paris suggests that the bankruptcy court
did not fully consider those statutory provisions or the fact that all of the
corporation’s funds were encumbered.
We review de novo a district court’s order affirming a bankruptcy court’s
grant of summary judgment. In re Piccadilly Cafeterias, Inc., 484 F.3d 1299, 1302
(11th Cir. 2007). “Like a district court, a bankruptcy court may only grant
summary judgment where there is no genuine issue of material fact.” In re Optical
Technologies, Inc., 246 F.3d 1332, 1334 (11th Cir. 2001) (citation omitted).7
Section 6672 provides:
Any person required to collect, truthfully account for, and pay over
any tax imposed by this title who willfully fails to collect such tax, or
truthfully account for and pay over such tax, or willfully attempts in
any manner to evade or defeat any such tax or the payment thereof,
shall . . . be liable to a penalty equal to the total amount of the tax
evaded, or not collected, or not accounted for and paid over.
26 U.S.C. § 6672(a). Paris concedes, and the record amply supports, the position
of the IRS that he is a “responsible person” within the meaning of § 6672(a).
Therefore, our resolution of this issue turns on whether Paris “willfully” violated
We have found that the willfulness requirement of § 6672 is satisfied “if the
responsible person has knowledge of payments to other creditors after he becomes
aware of the failure to remit the withheld taxes.” Thosteson v. United States, 331
F.3d 1294, 1300 (11th Cir. 2003). There is no requirement that willfulness of the
responsible person include a fraudulent or other bad motive. Id. In Thosteson the
responsible party did not learn until much later that, due to the actions of another
party, the corporation had “substantial overdue payroll tax liabilities.” Id. at 1298.
However, once he learned of the delinquency, he continued to write checks to other
creditors because he felt that, if the business was successful, then the taxes could
be repaid. Id. We concluded that such behavior constituted a willful violation of
§ 6672(a), explaining that:8
Even if a “responsible” person is unaware that withholding taxes have
gone unpaid in past quarters, a responsible person who becomes aware
that taxes have gone unpaid in past quarters in which he was also a
responsible person, is under a duty to use all “unencumbered funds”
available to the corporation to pay those back taxes. This duty extends
not only to funds available to the corporation at the time the
responsible person becomes aware but also to any unencumbered
funds acquired thereafter. If the responsible person fails to use such
unencumbered funds to satisfy the past unpaid liability, he is deemed
personally liable for the taxes that went unpaid in the past while he
was responsible. The responsible person deemed liable for the unpaid
liability of past tax quarters is considered to have “willfully” failed to
pay over the taxes for those past quarters, even though he was
unaware at that time that the taxes were going unpaid.
Id. at 1300–01 (emphasis added) (citations omitted).
In light of our decision in Thosteson, summary judgment was entirely
appropriate in this case. Paris concedes that after June 8, 2002 he was aware of the
unpaid tax liability. In his response to the IRS’ request for admissions, Paris also
admitted that he wrote checks, drawn on the corporation’s bank account, to other
creditors after he learned of the tax debt. He wrote these checks to cover various
corporate expenses, including payroll, rent, supplies, utilities, and legal bills. Paris
also signed quarterly tax returns for the periods ending in March and June of 2002.
Under Thosteson these actions effectively transformed Paris from a responsible
person who was not personally liable into a willful violator of the statute. It may
have been Paris’ sincere belief that continuing to operate the corporation would
eventually allow him to repay the unpaid taxes, just as that may have been the9
sincere belief of the responsible person in Thosteson. Nevertheless, it is clear as a
matter of law that Paris “willfully” violated § 6672, just as we held Thosteson did.
No facts that are material to the § 6672 issue are in dispute.
We need not reach Paris’ argument that the corporation’s funds were
encumbered by operation of the securities laws because he made payments to other
creditors with money that was presumably unencumbered. Any payment to
creditors other than the IRS, once Paris was aware of the unpaid tax liability,
constituted a willful violation of the § 6672. Id. Even assuming that some of the
corporation’s funds could not be paid to any creditor, including the IRS, without
running afoul of the securities laws, Paris’ argument that the corporation “had no
unencumbered funds” after June 2002 is not supported by the record. Paris chose
to pay other creditors of the corporation instead of the IRS. Unless Paris’ position
is that paying other creditors also violated securities laws, which it apparently is
not, his argument that he had no unencumbered funds is without merit.
STATE OF MAINE SUPERIOR COURT
KENNEBEC, ss. CIVIL ACTION
DOCKET NO. CV-05-198
STATE OF MAINE and )
SECURITIES ADMINISTRATOR, )
v. ) COMPLAINT
JAMES L. PARIS, )
1. The State of Maine and Securities Administrator (hereinafter collectively referred to as “the State”) bring this action against James L. Paris for violations of the Revised Maine Securities Act, 32 M.R.S.A. §§ 10101-10713 (1999 and Supp. 2004), in that Paris engaged in acts, practices, and a course of business that operated as a fraud or a deceit upon his clients, Harry Stred III and Kim Polack, and for breach of a Consent Agreement between Paris and the Securities Administrator.
2. This Court has jurisdiction pursuant to 10 M.R.S.A. § 8003(5)(B) (Supp. 2004) and 32 M.R.S.A. §§ 10602-10603 (1999 and Supp. 2004).
3. Plaintiff State of Maine is a sovereign state. Plaintiff Securities Administrator, who has offices in Gardiner in Kennebec County, Maine, is responsible for enforcing the Act. Plaintiffs bring this action by and through the Attorney General pursuant to 32 M.R.S.A. §§ 10602(1)(D), 10603 (1999) and the powers vested in him by 5 M.R.S.A. § 191 (Supp. 2004) and the common law as the State’s chief law enforcement officer.
4. Defendant Paris is an adult individual residing in Daytona Beach, Florida. From 1992 through 2001, Paris was sole owner, president, and an employee of James L. Paris Financial Services, Inc. (“JLPFS”), a Florida company licensed to transact business as an investment advisor in Maine.
5. In or about January of 1998, Paris solicited a loan from JLPFS client and Maine resident Harry Stred III. In or about November of 1999, Paris solicited another loan from JLPFS client and Maine resident Kim Polak. Paris represented to Stred and Polak that the loans were for the purpose of expanding JLPFS’s business. As a result of Paris’ solicitations, Stred and Polak loaned Paris and JLPFS a total of $25,000.
6. In soliciting the loans, Paris did not disclose that JLPFS was losing money and that Paris was not involved in the day-to-day operations of JLPFS or in oversight of its finances.
7. On or about October 2, 2000, Paris solicited an extension of the loan he had received from Stred. In his solicitation, Paris represented that the loan provided “the necessary capital for the expansion of [Paris’] business that is already underway.” Paris again did not disclose that JLPFS was losing money and that Paris was not involved in the day-to-day operations of JLPFS or in oversight of its finances. As a result of the solicitation, Stred agreed to the extension.
8. At no time prior to obtaining the Polak loan or the Stred extension did Paris disclose that his brother Carmen Paris, who Paris had left in charge of JLPFS’s finances without supervision, had been systematically embezzling funds from JLPFS from the beginning of 1999 at a rate of approximately $500,000 a year.
9. At least in part due to the embezzlement, Paris and JLPFS defaulted on the loans.
10. On August 4, 2003, the Securities Administrator issued a Notice of Intent to take administrative action against Paris, JLPFS, and Carmen Paris for violations of the Revised Maine Securities Act in conjunction with the loans and Stred extension.
11. In February of 2004, Paris entered into a Consent Agreement with the Securities Administrator resolving the administrative action. A true and correct copy of the Consent Agreement is attached hereto as Exhibit A and incorporated herein by reference. Among other things, the Consent Agreement requires Paris to pay a total of $22,000 in restitution pursuant to a specified payment schedule. The Consent Agreement also provides that:
If any payment is not received within one week after the due date, it shall be considered a breach of this consent agreement, and, within thirty days, Paris shall pay to the Office of Securities the balance of the amounts due to the two Maine investors. . . .
If Paris fails to comply with any provision of this Consent Agreement, the Securities Administrator, at her sole and unreviewable discretion, may declare this entire Consent Agreement null and void.
12. Paris paid a total of $12,000 in restitution under the Consent Agreement. However, Paris ceased making payments in September of 2004. Despite demand, Paris has failed to pay any portion of the remaining $10,000 due under the Consent Agreement.
13. The Revised Maine Securities Act (“the Act”) regulates persons acting as investment advisers or investment adviser representatives in the State of Maine.
14. The Act prohibits investment advisers and their employees from engaging “in any act, practice, or course of business which operates . . . as a fraud or deceit upon any client.” 32 M.R.S.A. § 10203 (1999).
15. Under the Act, “every person who directly or indirectly controls another person” who commits a violation of the Act “is liable to the same extent as that other person, unless the person otherwise secondarily liable . . . proves that the person did not know, and in the exercise of reasonable care could not have known, of the existence of the facts by reason of which liability is alleged to exist.” 32 M.R.S.A. § 10602(3) (Supp. 2004.)
16. The Securities Administrator may refer violations of the Act to the Attorney General for enforcement, and the Attorney General may initiate a civil action in the Superior Court. 32 M.R.S.A. § 10602(1)(D) (1999).
17. In an enforcement action under the Act, the Court may grant a variety of legal and equitable remedies, including injunctions, civil penalties of up to $10,000 for each violation, restitution, and disgorgement. 32 M.R.S.A. § 10603 (1999).
18. The Securities Administrator may enter into consent agreements with persons suspected of violating the Act. 10 M.R.S.A. § 8003(5)(B) (Supp. 2004). Consent agreements are “enforceable by an action in the Superior Court.” Id.
(Fraud or Deceit by an Investment Adviser or an Investment Adviser’s Employee)
19. The State repeats and realleges paragraphs 1 through 18 as if set forth fully herein.
20. By failing to disclose that: (1) JLPFS was losing money; (2) that Paris was not involved in the day-to-day operations of JLPFS or in oversight of its finances; and that (3) Carmen Paris had been systematically embezzling funds from JLPFS from the beginning of 1999 at a rate of approximately $500,000 a year, Paris engaged in acts, practices, and a course of business that operated as a fraud or deceit upon the Stred and Polack, all in violation of 32 M.R.S.A. § 10203 (1999).
21. Additionally, Paris is liable as a control person under 32 M.R.S.A. 10602(3) (Supp. 2004) for Carmen Paris’ embezzlement because Paris directly or indirectly controlled Carmen Paris and Carmen Paris’ embezzlement encompassed acts, practices, and a course of business that operated as a fraud or deceit upon the Stred and Polack, all in violation of 32 M.R.S.A. § 10203 (1999)
(Breach of Consent Agreement)
22. The State repeats and realleges paragraphs 1 through 21 as if set forth fully herein.
23. By failing to make payments as required by the Consent Agreement, Paris has breached the Consent Agreement.
REQUEST FOR RELIEF
WHEREFORE, the State requests that this Honorable Court grant the following relief:
1. An order requiring Paris to make full restitution to Stred and Polack by returning all monies to them plus interest;
2. A civil penalty of $10,000 for each violation of the Act;
3. An order requiring Paris to comply with the Consent Agreement, including by paying $10,000 to the Securities Administrator, plus interest, for distribution to Stred and Polack;
4. A permanent injunction prohibiting Paris from acting as an investment advisor, investment advisor representative, broker-dealer, securities agent, financial planner, or other financial or investment professional in the State of Maine; and
5. Such other and further relief as this Court deems appropriate.
DATED: August 9, 2005 Respectfully submitted,
G. STEVEN ROWE
/s/ Michael J. Colleran_______
MICHAEL J. COLLERAN
Assistant Attorney General
6 State House Station
Augusta, ME 04333-0006
Tel. (207) 626-8800
Bar. No. 9247
Attorney for Plaintiffs
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