Par Funding Receivership Website

Securities and Exchange Commission v. Complete Business Solutions Group, Inc., et al.

Case No. 20-cv-81205-RAR

United States District Court for the Southern District of Florida

Key Court Documents

Below are links within this website to certain filings and court orders in the SEC’s lawsuit against the Defendants that may be of interest to visitors of this website. All filings, court orders, including other filings from the Receiver, the parties to the lawsuit, and other persons, are also available on the Document Filing System of the United States District Court for the Southern District of Florida, which is available at: https://ecf.flsd.uscourts.gov/

DE 1253 – PAPERLESS ORDER denying [1214] Plaintiff Securities and Exchange Commission's Omnibus Motion for Final Judgments against Defendants Michael Furman, Joseph Cole Barleta, Joseph LaForte, and Lisa McElhone as MOOT due to the filing of [1252] Plaintiff Securities and Exchange Commission's Amended Omnibus Motion for Final Judgments against Defendants Michael Furman, Joseph Cole Barleta, Joseph LaForte, and Lisa McElhone. Signed by Judge Rodolfo A. Ruiz, II on 5/23/2022.
DE 1257 – Acknowledgment of Receipt of NOA from USCA re [1247] Notice of Interlocutory Appeal, filed by Joseph Cole Barleta. Date received by USCA: 5/18/22. USCA Case Number: 22-11694-G.
DE 1259 - PAPERLESS ORDER granting [1258] Daniel Scaramellino, One Nine Country Drive, LLC, and Michelle Scaramellino's Unopposed Joint Motion for Extension of Time to File Response in Opposition to Receiver's Expedited Motion to Expand Receivership. The responding parties shall file a response on or before June 21, 2022. Signed by Judge Rodolfo A. Ruiz, II on 6/1/2022. (ob)
DE 1260 – PAPERLESS ORDER. The Court is in receipt of an e-mail from counsel for Defendant Michael Furman regarding a potential discovery dispute requiring the Court's attention. The parties are ordered to confer about mutually agreeable dates for the a hearing on this issue. On or before Monday, 6/13/2022 at 5:00 PM , the moving party shall send an email to [email protected] providing the Court with two afternoons next when all necessary parties are available for the hearing and the amount of time that the parties anticipate needing for the hearing. The Court will then enter an order setting the hearing and provide further instruction. Signed by Magistrate Judge Bruce E. Reinhart on 6/9/2022.
DE 1262 - PAPERLESS ORDER granting [1261] Motion to Withdraw as Counsel for Defendant, Michael C. Furman. Elroy M. John Jr, Esq., Jeremy I. Knight, Esq., and the law firm, Knight Law, P.A. are hereby DISCHARGED of all further responsibilities related to Michael C. Furman in these proceedings. Signed by Judge Rodolfo A. Ruiz, II on 6/10/2022.
DE 1263 - PAPERLESS Order setting Telephonic Discovery Hearing for 6/15/2022 at 02:00 PM before Magistrate Judge Bruce E. Reinhart. Counsel shall appear telephonically using the following conference call instructions: Dial 1-888-557-8511; Enter access code 4098267#; and Enter security code 1234#. At least 48 hours prior to the scheduled hearing, the parties shall file a joint discovery memorandum of five pages or less (1) specifying the substance of the discovery matter to be heard, (2) certifying that the parties have complied with the pre-hearing communication requirement set forth above, and (3) attaching a copy of all source materials relevant to the discovery dispute (e.g., if the dispute concerns interrogatories, the interrogatories at issue and any responses thereto shall be provided to Chambers). Signed by Magistrate Judge Bruce E. Reinhart on 6/10/2022.
DE 1265 - **TIME CHANGE ONLY**: PAPERLESS Order Resetting Telephonic Discovery Hearing originally set for 6/15/2022 at 02:00 PM. Discovery Hearing is RESET for 6/15/2022 at 01:00 PM before Magistrate Judge Bruce E. Reinhart. All other instructions from DE 1263 still apply. Signed by Magistrate Judge Bruce E. Reinhart on 6/13/2022.
DE 1266 - PAPERLESS Order setting Telephonic Discovery Hearing. The Court is in receipt of an e-mail from counsel for Defendant Lisa McElhone regarding two discovery disputes requiring the Court's attention: (1) whether requiring third-party compliance with a Rule 45(c) in the Southern District of Florida is proper, and (2) whether it would be unduly burdensome to enforce the third-party subpoena. A Telephoinc Discovery Hearing to address these issues is set for 6/22/2022 at 12:30 PM before Magistrate Judge Bruce E. Reinhart. Counsel shall appear telephonically using the following conference call instructions: Dial 1-888-557-8511; Enter access code 4098267#; and Enter security code 1234#. At least 48 hours prior to the scheduled hearing, the parties shall file a joint discovery memorandum of five pages or less (1) specifying the substance of the discovery matter to be heard, (2) certifying that the parties have complied with the pre-hearing communication requirement set forth above, and (3) attaching a copy of all source materials relevant to the discovery dispute (e.g., if the dispute concerns interrogatories, the interrogatories at issue and any responses thereto shall be provided to Chambers). All attorneys appearing at the hearing shall be qualified to practice in the Southern District of Florida pursuant to Rule 4(a) of the Rules Governing the Admission, Practice, Peer Review, and Discipline of Attorneys. Signed by Magistrate Judge Bruce E. Reinhart on 6/13/2022.
DE 1269 - PAPERLESS ORDER clarifying two separate discovery hearings being conducted by Judge Reinhart: A Telephonic Discovery Hearing is set for 6/15 at 1:00 PM to address Defendant Michael Furman's request to take depositions of the Receiver and his professionals (see DEs 1263, 1265). Separately, a Telephonic Discovery Hearing is set for 6/22 at 12:30 PM for the Court to address the issues regarding the third-party subpoenas (see DE 1266). Signed by Magistrate Judge Bruce E. Reinhart on 6/14/2022.
DE 1270 - PAPERLESS Minute Entry for proceedings held before Magistrate Judge Bruce E. Reinhart: Discovery Hearing held on 6/15/2022. Total time in court: 0 hour(s) : 25 minutes. Matter taken under advisement. Order to follow.
DE 1272 – TRANSCRIPT of Motion Hearing - Via Videoconference held on 5/19/2022 before Judge Rodolfo A. Ruiz, II, 1-100 pages, Court Reporter: Ilona Lupowitz, 954-769-5568 / [email protected]. Transcript may be viewed at the court public terminal or purchased by contacting the Court Reporter/Transcriber before the deadline for Release of Transcript Restriction. After that date it may be obtained through PACER. Redaction Request due 7/7/2022. Redacted Transcript Deadline set for 7/18/2022. Release of Transcript Restriction set for 9/14/2022. (ilz)
1275 - PAPERLESS ORDER granting [1273] Motion to Appear Pro Hac Vice, Consent to Designation, and Request to Electronically Receive Notices of Electronic Filing for attorney Mark E. Cedrone. Signed by Judge Rodolfo A. Ruiz, II on 6/21/2022.
DE 1278 - PAPERLESS ORDER granting [1277] Daniel Scaramellino, One Nine Country Drive, LLC, and Michelle Scaramellino's Unopposed Joint Motion for Extension of Time to File Response in Opposition to Receiver's Expedited Motion to Expand Receivership. The responding parties shall file a response on or before June 28, 2022. Signed by Judge Rodolfo A. Ruiz, II on 6/21/2022.
DE 1280 - PAPERLESS Minute Entry for proceedings held before Magistrate Judge Bruce E. Reinhart: Discovery Hearing held on 6/22/2022. Total time in court: 0 hour(s) : 50 minutes.MINUTE ORDER: For the reasons more fully explained on the record, the subpoenas sent by Defendant Lisa McElhone to the Ermel non-parties are QUASHED on the grounds that they are cumulative to documents the Defendants already have and are otherwise not proportional to the needs of the case at this late date in the proceedings. Signed by Magistrate Judge Bruce E. Reinhart on 6/22/2022.
DE 1282 - PAPERLESS ORDER granting [1281] Defendants LaForte, McElhone, and Cole's Unopposed Motion to Enlarge the Page Limit for their Response in Opposition to the SEC's Amended Omnibus Motion for Final Judgments, and for a One Week Extension of Time to File. Defendants shall file their response on or before July 8, 2022 and are permitted to file a combined response up to 50 pages in length. Signed by Judge Rodolfo A. Ruiz, II on 6/27/2022.
DE 1283 - PAPERLESS Order setting a Telephonic Discovery Hearing regarding a discovery dispute between Defendant Lisa McElhone and the Receiver. The discovery hearing is set for 7/1/2022 at 03:00 PM before Magistrate Judge Bruce E. Reinhart. Counsel shall appear telephonically using the following conference call instructions: Dial 1-888-557-8511; Enter access code 4098267#; and Enter security code 1234#. Signed by Magistrate Judge Bruce E. Reinhart on 6/28/2022.
DE 1285 - PAPERLESS ORDER granting [1284] Daniel Scaramellino, One Nine Country Drive, LLC, and Michelle Scaramellino's Unopposed Joint Motion for Extension of Time to File Response in Opposition to Receiver's Expedited Motion to Expand Receivership. The responding parties shall respond on or before June 30, 2022. Signed by Judge Rodolfo A. Ruiz, II on 6/29/2022.
DE 1287 - PAPERLESS ORDER granting [1286] Defendant, Michael C. Furman's, Motion for Extension of Time to File Response to Plaintiff's Amended Omnibus Motion for Final Judgment. Defendant's response is due on or before July 8, 2022. Signed by Judge Rodolfo A. Ruiz, II on 6/30/2022.
DE 1292 - PAPERLESS Minute Entry for proceedings held before Magistrate Judge Bruce E. Reinhart: Discovery Hearing regarding a discovery dispute between Defendant Lisa McElhone and the Receiver held on 7/1/2022. Total time in court: 0 hour(s) : 30 minutes. MINUTE ORDER: For the reasons set forth on the record, the Receiver's Motion to Quash is GRANTED and Ms. McElhone's Motion to Compel is DENIED. Signed by Magistrate Judge Bruce E. Reinhart on 7/1/2022.
DE 1295 - PAPERLESS ORDER granting [1294] Receiver, Ryan K. Stumphauzer's Unopposed Motion for Extension of Time to File Reply to Responses to Expedited Motion to Expand Receivership to Include 19 Country Drive, Morristown, NJ 07960. Receiver's response is due on or before July 14, 2022. Signed by Judge Rodolfo A. Ruiz, II on 7/7/2022.
DE 1299 - TRANSCRIPT of Hearing - Motion to Compel (Via Zoom) held on April 21, 2022 before Judge Rodolfo A. Ruiz, II, 1 - 69 pages, Court Reporter: Glenda Powers, 305-523-5022 / [email protected]. Transcript may be viewed at the court public terminal or purchased by contacting the Court Reporter/Transcriber before the deadline for Release of Transcript Restriction. After that date it may be obtained through PACER. Redaction Request due 8/1/2022. Redacted Transcript Deadline set for 8/11/2022. Release of Transcript Restriction set for 10/11/2022.
DE 1302 - PAPERLESS ORDER requiring Defendant Michael C. Furman to file the Declaration that was intended to be included in his filing [1300] Motion for Leave to Appeal in forma pauperis on or before July 13, 2022. The included [1300-1] Affidavit indicates that an "attached declaration" was meant to answer Question 11 of the Affidavit Accompanying Motion for Permission to Appeal In Forma Pauperis. Signed by Judge Rodolfo A. Ruiz, II on 7/12/2022.
DE 1304 - PAPERLESS ORDER requiring an expedited response to [1303] Plaintiff Securities and Exchange Commission's Expedited Motion to Strike Defendants' Expert Report on or before July 14, 2022. Signed by Judge Rodolfo A. Ruiz, II on 7/12/2022.
DE 1310 - PAPERLESS ORDER granting in part and denying in part [1306] Defendants LaForte, McElhone, and Cole's Expedited Motion to Strike the S.E.C.'s Expedited Motion to Strike Defendants' Expert Report Based on the S.E.C.'s Flagrant Disregard of Local Rule 7.1(a)(3), or for Alternative Relief ("Motion"). The Court has reviewed [1309] Plaintiff's Response to Defendants' Expedited Motion to Strike. The Motion is granted insofar as Defendants request an extension of time to respond to [1303] Securities and Exchange Commission's Expedited Motion to Strike Defendants' Expert Report. Defendants' Response is due on or before Monday, July 18, 2022 and shall be limited to seven (7) pages. Accordingly, any reply by the S.E.C. is due on or before Thursday, July 21, 2022 and shall be no longer than five (5) pages. Should the S.E.C. need additional time to file a reply in support of [1252] the S.E.C.'s Amended Omnibus Motion for Judgments, the S.E.C. shall seek leave of Court. Defendants' request for attorneys' fees related to the instant Motion is DENIED. Signed by Judge Rodolfo A. Ruiz, II on 7/13/2022.
DE 1313 - TRANSCRIPT of Motion Hearing held on 7/1/2022 before Magistrate Judge Bruce E. Reinhart, 1-22 pages, Joanne Mancari: Other, 305-523-5635. Transcript may be viewed at the court public terminal or purchased by contacting the Court Reporter/Transcriber before the deadline for Release of Transcript Restriction. After that date it may be obtained through PACER. Redaction Request due 8/4/2022. Redacted Transcript Deadline set for 8/15/2022. Release of Transcript Restriction set for 10/12/2022.
DE 1316 - PAPERLESS ORDER granting [1315] Plaintiff's Unopposed Motion for Enlargement of Time to File An Omnibus Reply In Support of The Motion for Relief Against All Remaining Defendants. Within two business days of the entry of the Court's Order on Plaintiff's Motion to Strike Defendants' Expert Witness Report [ECF No. 1303], the Commission shall file either (i) its Omnibus Reply Brief, if the Motion to Strike is granted, or (ii) a Motion for additional time to file the Omnibus Reply Brief in order to obtain expert witness discovery. Signed by Judge Rodolfo A. Ruiz, II on 7/15/2022.
DE 1318 - Clerk's Notice to Filer re [1317] Notice of Appeal,. Notice of Appeal Requires a Fee; CORRECTIVE ACTION REQUIRED Appellate Filing Fee Not Paid. The Filer must file a Notice of Compliance of Filing Fee-Notice of Appeal and electronically pay the correct fee of $505.00 within 24 hrs of this notice. (kpe)
DE 1321 - PAPERLESS ORDER scheduling a hearing on [1180] Receiver, Ryan K. Stumphauzer's Expedited Motion to Expand the Receivership to include 19 Country Drive, Morristown, NJ 07960 via Zoom on August 3, 2022 at 10:30 A.M. The Court will publish the Zoom login information on the docket at least 48 hours prior to the hearing. Signed by Judge Rodolfo A. Ruiz, II on 7/22/2022. (ob)
DE 1322 - PAPERLESS ORDER granting [1303] Plaintiff Securities and Exchange Commission's Expedited Motion to Strike Defendants' Expert Report ("Motion"). Upon review of [1319] Defendants' Response to the Motion, [1320] Plaintiff's Reply, the [1298-17] Dunkelberger Report ("Report"), and the record, the Court finds that the Report is untimely and improper. While Defendants argue that the Consents and Judgments permit the inclusion of additional expert reports, see Resp. at 3, the Court disagrees. A plain reading of both the Consents and Judgments specify exactly what types of discovery are permitted for disgorgement and additional expert testimony is not an enumerated category. See Resp. at 3, see also Reply at 2. As such, the Court relies on its [521] Amended Scheduling Order ("Scheduling Order") for guidance. The Scheduling Order required that the parties exchange rebuttal expert witness summaries or reports no later than August 27, 2021. Scheduling Order at 1. At the latest, all expert discovery was due to be completed on September 10, 2021. Id. at 2. Those deadlines have long passed. At best, Defendants seek to include a "supplemental" expert report. However, Courts have broad discretion to exclude untimely-disclosed expert witness testimony - even when they are designated as "supplemental" reports. Companhia Energetica Potiguar v. Caterpillar Inc., No. 14-CV-24277, 2016 WL 3102225, at *5 (S.D. Fla. Jun. 2, 2016) (citing Corwin v. Walt Disney Co., 475 F.3d 1239, 1252 (11th Cir. 2007) ("a supplemental expert report may be excluded pursuant to Federal Rule of Civil Procedure 37(c) if a party fails to file it prior to the deadline imposed")). Here, the Report at issue is an additional report by an undisclosed expert whose purpose is to bolster Defendants' original expert and rebut Plaintiff's original expert. But supplemental disclosures are prohibited "whenever a party wants to bolster or submit additional expert opinions [because it] would reek [sic] havoc in docket control and amount to unlimited expert opinion preparation." Id. at *6 (citing Friebel v. Paradise Shores of Bay Cnty., LLC, No. 5:10-cv-120, 2011 WL 2420230, at *2 (N.D. Fla., Jun. 13, 2011)). Because the Dunkelberger Report runs afoul of the Scheduling Order and inappropriately bolsters and rebuts previous experts, the Court finds that the Report must be stricken. Accordingly, Defendants may submit an amended response to Plaintiff's [1252] Amended Omnibus Motion for Final Judgments on or before July 29, 2022. Any reply by Plaintiff is due on or before August 3, 2022. Furthermore, to the extent Defendants request that the Receiver Declaration be stricken, that request is DENIED. The Receiver Declaration is not an expert witness opinion and he does not vouch for Plaintiff's expert in his summation of Defendants' own Quickbooks records. Signed by Judge Rodolfo A. Ruiz, II on 7/22/2022. (ob)
DE 1327 - PAPERLESS ORDER granting [1326] Receiver's Unopposed Motion For Leave To Exceed Page Limitation On Receiver's Motion For An Order To Show Cause Why Defendants Joseph Laforte And Lisa Mcelhone Should Not Be Held In Contempt, And To Lift Litigation Injunction Against Specified Third Parties. The Receiver may exceed the standard page limitation by six (6) pages. Signed by Judge Rodolfo A. Ruiz, II on 7/29/2022. (ob)
DE 1335 - PAPERLESS ORDER containing Zoom instructions for the hearing scheduled for Wednesday, August 3, 2022 at 10:30 A.M. The Zoom hearing can be accessed at click here. Meeting ID: 161 561 6641 - Passcode: 965142 Signed by Judge Rodolfo A. Ruiz, II on 8/2/2022.
DE 1336 - PAPERLESS Minute Entry for proceedings held before Judge Rodolfo A. Ruiz, II: Zoom Evidentiary Motion Hearing held on 8/3/2022 re [1180] EXPEDITED MOTION to Expand the Receivership to Include 19 Country Drive, Morristown, NJ 07960 re [141] Order filed by Ryan K Stumphauzer. Attorney Appearance(s): James David Silver, Katie Brinson Hinton, Amie Riggle Berlin, Timothy Andrew Kolaya, Gaetan J. Alfano, Court Reporter: Ilona Lupowitz, 954-769-5568 / [email protected]. (gp)
DE 1337 - PAPERLESS ORDER granting Receiver's ore tenus Motion to allow Supplemental Briefing on [1180] Receiver, Ryan K. Stumphauzer's Expedited Motion to Expand the Receivership to Include 19 Country Drive, Morristown, NJ 07960 ("Expedited Motion"). As discussed at the [1336] hearing held on August 3, 2022, the Receiver shall file any additional briefing addressing the concerns laid out by the Court on or before August 17, 2022. Should the Receiver file supplemental briefing, the Responding Parties shall have fourteen (14) days by which to file a response. Until such time as the Court makes a ruling on the [1180] Expedited Motion, the funds at issue shall remain in an escrow account held by the Receiver. Signed by Judge Rodolfo A. Ruiz, II on 8/3/2022. (obt)
DE 1342 - PAPERLESS ORDER granting [1340] Plaintiff Securities and Exchange Commission's Motion for Page Enlargement. The SEC is permitted to file an omnibus Reply brief that is thirty-two (32) pages in length. Signed by Judge Rodolfo A. Ruiz, II on 8/4/2022. (jb03)

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