Securities and Exchange Commission v. Santillo
- John Koeltl
- 1:18-cv-05491
- U.S. District Court · Southern District of New York
- 3
In Securities and Exchange Commission v. Santillo, Judge Koeltl's text presents the SEC's request to modify an asset freeze, not a court ruling.
The request concerned the SEC, Paul A. LaRocco, the Florida property's mortgage holders Charles Ruse, Jr. and Barbara Ruse, and investors described by the SEC as victims of the alleged scheme. The provided text does not show what action the court took.
What happened
In Securities and Exchange Commission v. Santillo, the Securities and Exchange Commission described a case involving an alleged Ponzi scheme that raised more than $102 million from more than 600 investors. The request concerned property in which Paul A. LaRocco had an interest.
The SEC asked the court to modify the asset-freeze order so the Florida property could be sold. It said the property had no equity because a mortgage lien was larger than the property's value, and therefore the sale would not reduce money potentially available to investors.
The provided text does not show a ruling on the request. Judge Koeltl's text is the SEC's July 5, 2022 letter asking the court to grant the motion; it does not state that he granted or denied it.
The detailed version
- Securities and Exchange Commission v. Santillo · No. 1:18-cv-05491
- John Koeltl
- July 13, 2022
Background
The Securities and Exchange Commission (SEC) said it had sued Paul A. LaRocco and other defendants over an alleged fraudulent Ponzi scheme. According to the SEC, the scheme raised more than $102 million from more than 600 investors. On June 29, 2018, the court entered an order freezing LaRocco's assets.
The SEC had recorded a notice concerning the lawsuit against a Florida condominium property on July 12, 2018. In November 2021, Charles Ruse, Jr. and Barbara Ruse conducted a foreclosure sale involving the property. The SEC said they had not named the SEC in that foreclosure case. They later filed a new case against the SEC seeking to redo the foreclosure, and the SEC removed that case to federal court in Florida.
The Requested Modification
The SEC asked the court to modify the asset-freeze order to allow the Florida property to be sold. It stated that the mortgage lien had been recorded before the SEC's notice and was superior to the SEC's lien. The SEC also stated that the property was valued at $55,000, while the mortgage balance was approximately $76,000. The SEC therefore argued that the property had no equity and that its sale would not affect any future payment to defrauded investors.
The SEC cited the court's equitable authority to issue and modify preliminary asset freezes. It argued that modifying the order was appropriate because doing so would be in the interest of defrauded investors, and it asked the court to grant the motion.
Ruling and Current Status
The provided text does not contain an order or disposition by Judge Koeltl. It is a letter from the SEC requesting relief. The text does not say that the motion was granted, denied, or granted in part and denied in part.
Read the full 3-page opinion on CourtListener, the free public archive maintained by the Free Law Project.