United States District Court, D. South Carolina, Columbia Division
Beattie B. Ashmore, in his Capacity as Court-Appointed Receiver for the Three Hebrew Boys, Plaintiff,
Rhonda Taylor, Defendant
For Beattie B Ashmore, in his Capacity as Court Appointed Receiver for The Three Hebrew Boys, Plaintiff, Counter Defendant: Lauren S Price, Lewis Walter Tollison, III, LEAD ATTORNEYS, Tollison Law Firm, Greenville, SC.
Rhonda R Taylor, Defendant, Pro se, Columbia, SC.
Margaret B. Seymour, Senior United States District Judge.
On August 26, 2013, Plaintiff Beattie B. Ashmore, in his Capacity as Court-Appointed Receiver for the Three Hebrew Boys, filed a complaint alleging that Defendant Rhonda Taylor profited from a fraudulent investment scheme orchestrated by Joseph Brunson, Timothy McQueen, and Tony Pough, also known as the Three Hebrew Boys. See United States v. Brunson, Cr. No. 3: 08-615. Defendant, proceeding pro se, filed an answer and counterclaim on November 25, 2013. In her counterclaim, Defendant asserts that at the time the Ponzi scheme was terminated, there were no victims, and that she had the freedom to enter into a contract " that benefited [sic] all parties which to date no person was injured as a result of the contract Defendant executed in good faith." ECF No. 12, 5. Plaintiff filed an answer to Defendant's counterclaim on December 12, 2013, denying Defendant's allegations and asserting that the counterclaim should be dismissed for failure to state a claim. See Fed.R.Civ.P. 12(b)(6). ECF No. 18.
This matter now is before the court on Plaintiff's motion for summary judgment, which motion was filed on June 8, 2014. By order filed October 8, 2014, pursuant to Roseboro v. Garrison, 528 F.2d 309 (4th Cir. 1975), Defendant was advised of the summary judgment procedures and the possible consequences if she failed to respond adequately. Defendant filed no response to Plaintiff's motion for summary judgment.
Beginning in September 2004, Brunson, McQueen, and Pough orchestrated a Ponzi scheme through Capital Consortium Group (CCG), a business entity purporting to exist as a " ministry" for the purpose of debt elimination. Brunson, McQueen, and Pough offered a mortgage satisfaction program, automobile note satisfaction program, credit card satisfaction program, and other such schemes through which they promised to pay off debts of participants in exchange for a nominal investment. For example, a participant with a $50, 000 mortgage could provide a $1, 500 " processing fee" and after approximately sixteen months the mortgage would be satisfied. Brunson, McQueen, and Pough claimed that they were able to obtain such results because participant monies were deposited into " sweep accounts" that were invested in the foreign exchange market nightly. Brunson, McQueen, and Pough represented that the foreign exchange market generated returns of up to 200 percent to 500 percent per night.
Brunson, McQueen, and Pough did deposit some participant funds into sweep accounts at various banks; however, the accounts were interest-bearing accounts earning no more than five percent annually. They also deposited funds into other bank accounts through which they funded a lavish lifestyle. Brunson, McQueen, and Pough initially used a portion of the deposits to pay early participants. As is typical in a Ponzi scheme, the successful elimination of debt of early participants made the scheme attractive to new recruits. To facilitate expansion of their scheme, Brunson, McQueen, and Pough utilized " Independent Representatives" who received fees in exchange for obtaining additional participants. As of May 2007, Brunson, McQueen, and Pough controlled accounts containing approximately $17, 000, 000. They were obligated through their various programs to eliminate debt totaling over $950, 000, 000. See generally Superseding Indictment, ECF No. 84.
Upon motion of the government, the court issued a pre-indictment restraining order on August 2, 2007. The pre-indictment restraining order barred Brunson, McQueen, and Pough, individually and doing business as various business entities, as well as those in active concert or participation with them, from transferring or disposing of their property, which included numerous vehicles, an airplane, and extensive real estate holdings. The pre-indictment restraining order was extended on August 15, 2007, and the court also appointed Plaintiff as Receiver to assist in the identification and disposition of assets. Plaintiff's duties were described by order filed September 5, 2007, as thereafter amended.
Brunson, McQueen, and Pough were indicted on June 20, 2008. A superseding indictment was filed on August 21, 2008, charging Brunson, McQueen, and Pough with conspiracy to commit mail fraud, in violation of 18 U.S.C. § § 1341 and 1349 (Count 1); mail fraud, in violation of 18 U.S.C. § 1341 (Counts 2-36); interstate transportation of stolen goods, in violation of 18 U.S.C. § § 2314 and 2 (Counts 37-46); and engaging in monetary transactions in property derived from unlawful activities, in violation of 18 U.S.C. § § 1957 and 2 (Counts 47-58). A jury found Brunson, McQueen, and Pough guilty on all counts on November 20, 2009. Also on November 20, 2009, the jury returned a special verdict for forfeiture of property in the amount of $82, 000, 000.
In this case, Plaintiff contends that Defendant participated in a mortgage payoff program. Plaintiff alleges that Defendant invested or deposited $2, 500.00 and received payoffs totaling $83, 662.21, which resulted in a net profit of $81, 162.21. Plaintiff asserts causes of action for fraudulent transfer: violation of the Statute of Elizabeth, S.C. Code Ann. § 27-23-10 (First Cause of Action); unjust enrichment (Second Cause of Action); imposition of an equitable mortgage/deed of trust (Third Cause of Action); constructive/resulting trust (Fourth Cause of Action); and equitable lien (Fifth Cause of Action). Plaintiff moves for summary judgment as to all causes of action, including the equitable remedies that flow from the claims asserted in the Third, Fourth, and Fifth Causes of Action, and as to Defendant's counterclaim.
Plaintiff has moved for summary judgment pursuant to Fed.R.Civ.P. 56. Under that standard, summary judgment is appropriate if " the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a). In considering a summary judgment motion, " [t]he evidence of the non-movant is to be believed, and all justifiable inferences are to be drawn in his favor." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). At the summary judgment stage, it is not the court's role to " weigh the evidence and determine the truth of the matter" but instead to determine whether there are " genuine factual issues that properly can be resolved only by a finder of fact because they may reasonably be resolved in favor of either party." Id. at 250. Summary judgment should be granted if " the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986).
Plaintiff's cause of action under the Statute of Elizabeth and for unjust enrichment are equitable in nature. Oskin v. Johnson, 400 S.C. 390, 735 S.E.2d 459, 463 (S.C. 2012) (noting that an action to set aside a conveyance under the Statute of Elizabeth is an equitable action); Ellis v. Smith Grading & Paving, Inc., 294 S.C. 470, 366 S.E.2d 12, 14 (S.C. Ct. App. 2011) (observing that unjust enrichment is an equitable doctrine). A clear and convincing ...