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Case 3:16-cr-01545-BEN Document 54 Filed 11/01/16 Page 1 of 2

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TIMOTHY A. SCOTT
California Bar No. 215074
LAW OFFICES OF TIMOTHY A. SCOTT, APC
1350 Columbia Street, Suite 600
San Diego, California 92101
Telephone: (619) 794-0451
Facsimile: (619) 652-9964
email: tscott@timscottlaw.com
Attorneys for Jeffrey Spanier

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UNITED STATES DISTRICT COURT

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SOUTHERN DISTRICT OF CALIFORNIA

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HONORABLE ROGER T. BENITEZ

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United States of America,

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Plaintiff,

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vs.

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Jeffrey Spanier,

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Defendant.

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Case No.: 16cr1545-BEN


Date: November 4, 2016
Time: 10:00 a.m.
Notice of Motions and Motions to:
1. Dismiss the superseding indictment
as time-barred and not relating back to a
timely original indictment.
2. Dismiss Count 2 for duplicity and
failure to allege a distinct crime within
the limitations period.
3. Incorporate motions attacking
original indictment.

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On Friday October 30th, the government returned a superseding indictment

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alleging six new overt actsan apparent bid to extend the governments case into

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the applicable limitations period. Because the original indictment is time-barred,

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as is the superseding indictment that relies upon it, he asks that the Court dismiss

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the counts in both indictments.

Case 3:16-cr-01545-BEN Document 54 Filed 11/01/16 Page 2 of 2

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Dated: November 1, 2016


Respectfully Submitted,

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S/ Timothy A. Scott

____________________________
TIMOTHY A. SCOTT

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Law Offices of
Timothy A. Scott, APC

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Case 3:16-cr-01545-BEN Document 54-1 Filed 11/01/16 Page 1 of 13

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TIMOTHY A. SCOTT
California Bar No. 215074
LAW OFFICES OF TIMOTHY A. SCOTT, APC
1350 Columbia Street, Suite 600
San Diego, California 92101
Telephone: (619) 794-0451
Facsimile: (619) 652-9964
email: tscott@timscottlaw.com
Attorneys for Jeffrey Spanier

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UNITED STATES DISTRICT COURT

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SOUTHERN DISTRICT OF CALIFORNIA

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HONORABLE ROGER T. BENITEZ

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United States of America,

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Plaintiff,
vs.
Jeffrey Spanier,

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Defendant.

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Case No.: 16cr1545-BEN


Date: November 4, 2016
Time: 10:00 a.m.
Memorandum in Support of Motions to
Dismiss

Introduction and Issues Presented

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I.

Statute of limitations, Counts 1 and 2.


For conspiracy charges, the statute of limitations is measured from the date

of the latest overt act alleged in the indictment. The July 1 indictment failed to
allege any overt act within the preceding five years, thus it was untimely. The
government has now filed a superseding indictment, but that indictment also fails
to allege an overt act within five years of its filing. This new indictment does not
relate back to the original indictment either. This is so because: 1) the
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Case 3:16-cr-01545-BEN Document 54-1 Filed 11/01/16 Page 2 of 13

superseding indictment relies on a charging document that was itself time-barred;

and 2) it impermissibly broadens the original indictment. Dismissal of all charges

in both indictments should result.

II.

Statute of limitations, Count 2 only.


Count 2 charges securities fraud. Securities fraud is supposed to be a

discrete offense, criminalizing particular stock transactions. It is simply not a

continuing offense under Ninth Circuit law. As a result, it is impermissible to have

a single count in the indictment charge a vague and wide-ranging course of

conduct that could conceivably encompass hundreds of potential criminal acts.

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These duplicity and vagueness problems are exacerbated by the fact that no

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securities fraud transactions appear to have occurred within the applicable statute

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of limitations. This count should be dismissed accordingly.

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Statement of Facts

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In February of 2016, the Ninth Circuit dismissed the underlying case United
States v. Spanier, 12cr918. The government re-indicted the following July. 1 In
response to a defense motion to dismiss, this Court found that the government did
not re-indict within 60 days of dismissal, thus the tolling provisions set forth in 18
U.S.C. 3299 and 3289 did not apply. Because the indictment was returned on
July 1, 2016, the applicable statute of limitations serves to bar any offense that was
completed before July 1, 2011, and Counts 2-18 were dismissed accordingly.

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Docket at 1. A copy of the original indictment is attached as Exhibit A for


the Courts reference.

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But the remaining counts of that indictmentCounts 1 and 19also fail to

allege any overt act occurred within the limitations period. The last alleged overt

act was in May of 2011, two months before the cut-off of July 1, 2011. 2

On October 30th, a Friday afternoon nine days before trial, the government

returned a superseding indictment. 3 That indictment did not allege any overt acts

occurring after October 30, 2011. But it did add six overt acts that allegedly

occurred after July 1, 2011. 4 Presumably the government believes that these six

overt acts relate back to the July 1 indictment, and somehow save the indictment

from being time-barred. That premise is the focus of the first part of these

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motions.

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But Count 2 of the indictment suffers from its own problems. Count 2, the

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securities-fraud charge, does not allege that a specific crime was committed on a

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date certain. It instead alleges that [b]eginning in or around February 2003, and

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continuing up to at least March 14, 2012, Mr. Spanier committed securities fraud

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under 15 U.S.C. 78j(b) and 78ff. Count 2 also incorporates paragraphs 1-7 and

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11-12 by reference, but it does not say which (if any) of these are the actual count

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The indictment did allege that the conspiracy described in Count 1 and the
securities fraud alleged in Count 19 continued up to and including October 25,
2013. Exhibit at 3. This is just the date of the superseding indictment in the
underlying casemonths after one alleged co-conspirator was convicted at trial
and the other co-conspirator had committed suicide. As described infra, it is the
overt acts alleged that matter in this context, not obviously untrue allegations that a
conspiracy was continuing in October of 2013.

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See Exhibit B.

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See Id. at 8, overt acts (t)-(y). These acts all relate to a single witness,
Richard Sellers. Mr. Sellerss stock had already been conveyed before July 1,
2011. The overt acts all pertain to after-the-fact conversations with Mr. Sellers
most if not all of which were after the F.B.I. was publicly investigating the case.

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alleged. Securities fraud is not a continuing offense, and the indictment does not

specify how a securities offense occurred within the limitations period.


These motions follow.

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Discussion

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I.

The Superseding Indictment and the original Indictment that it relies


upon are both barred by the statute of limitations.
A five-year statute of limitations applies to Counts 1 and 2 under 18 U.S.C.

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3282. Because the present indictment was returned on October 30, 2016, the

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charges would ordinarily be time-barred unless the government can prove that the

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crimes alleged occurred after October 30, 2011. The government has tried to draft

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its way around its statute-of-limitations problem by ostensibly relating back to

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the July 1, 2016 indictment, and then alleging some overt acts that occurred after

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July 1, 2011.

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This gambit fails. The rule is that [a] superseding indictment brought after

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the statute of limitations has expired is valid so long as the original indictment is

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still pending and was timely and the superseding indictment does not broaden or

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substantially amend the original charges. United States v. Italiano, 894 F.2d

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1280, 1282 (11th Cir. 1990). But this rule does not save the government here for

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two reasons: 1) the original indictment was itself not timely, thus it cannot

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support a superseding indictment; and 2) even if the original indictment was

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somehow timely, the superseding indictment substantially amends and broadens it

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by adding new critical facts, theories, and a distinct alleged conspiracy. For these

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reasons, the superseding indictment was not tolled by the July 1 indictment.

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A.

The superseding indictment is time-barred because it rests on an


original indictment that is itself barred by the statute of
limitations.

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To toll the statute of limitations, the relation-back doctrine requires a

timely underlying indictment. See Italiano, 894 F.2d at 1282 (original

indictments tolling applies as long as that indictment is still pending and was

timely) (emphasis provided). See also United States v. Friedman, 649 F.2d 199,

204 (3d Cir. 1981) (a superseding indictment returned while the original

indictment is validly pending is not barred by the statute of limitations if it does not

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expand the charges made in the initial indictment) (emphasis provided); United

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States v. Grady, 544 F.2d 598, 601-02 (2d Cir. 1976) (a superseding indictment

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[is not time-barred if] the first indictment is still validly pending, [and] if and only

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if it does not broaden the charges made in the first indictment) (emphasis

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provided).

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The original indictment was not timely. In its Order dismissing Counts 2-

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traditional rule used in computing periods of limitation in conspiracy cases, the

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Court wrote, is the statute of limitations starts to run on the date of the last overt

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act alleged to have caused the complainant injury. Order, docket at 34, page 2

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(citing United States v. Charnay, 537 F.2d 341, 354 (9th Cir. 1976)). This has been

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Supreme Court law for over 100 years: the period of limitation must be computed

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from the date of the overt act rather than the formation of the conspiracy. And

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where during the existence of the conspiracy there are successive overt acts, the

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period of limitation must be computed from the date of the last of them of which

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there is appropriate allegation and proof. Brown v. Elliott, 225 U.S. 392, 401

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(1912) (emphasis provided). The same is true of the Ninth Circuit. See Hedderly

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v. United States, 193 F. 561 (9th Cir. 1912) (prosecution is not barred by the

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statute of limitations until three years after the commission of the last overt act

alleged and proved.) (emphasis provided).


When the government fails to allege an overt act within the statutory

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limitation period, the indictment is invalid and must be dismissed. See United

States v. Ben Zvi, 242 F.3d 89, 97 (2d Cir. 2001) (Ben Zvi argues that the wire

fraud conspiracy as charged in the First Indictment was time barred because none

of the alleged overt acts occurred within five years of the indictment's return. We

agree.). Even if evidence of overt acts might be proven to fall within the

limitations period, they must be included within the indictment to save it from

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being time-barred. Put differently, charging a timely overt act in the indictment is

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mandatory; proof at trial does not save an indictment missing this key element.

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See United States v. Davis, 533 F.2d 921, 929 (5th Cir. 1976) (rejecting

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government argument to the contrary, holding that for purposes of the statute of

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limitations the overt acts alleged in the indictment and proved at trial mark the

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duration of the conspiracy) (emphasis provided); Id. at 929 n.11 (describing our

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repeated holdings that proof of a conspiracy must be based on allegation and proof

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of both the criminal agreement and of the commission by one of the conspirators of

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an overt act in furtherance of the conspiracy) (emphasis in original). 5

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The government cannot draft its way around these problems by simply

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alleging an ongoing conspiracy without factual support. See e.g. Fiswick v. United

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States, 329 U.S. 211, 216 (1944) (end of conspiracy measured from date of last

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overt act described in the indictment, even though indictment generally alleged a

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Mr. Spanier recently became aware of this case law through research in
response to the governments superseding indictmentand in particular the
addition of six overt acts nine days before trial. He expressly disavows any
suggestion in prior briefing that merely alleging a continuing offense in the
limitations period (without any overt acts supporting the allegation) is sufficient to
avoid being time-barred.

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conspiracy continuing until the date of the indictment itself). See also Bridges v.

United States, 346 U.S. 209, 222-23 (1953) (The embellishment of the indictment

does not lengthen the time for prosecution. It is the statutory definition of the

offense that determines whether or not the statute of limitations has been

violated.). 6
The remaining counts of the original indictment, then, must be measured by

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their last overt act. The latest overt act described in Count 1 of the original

indictment is May 11, 2011almost two months outside of the July 1, 2001 cut-

off. Count 19 simply incorporated the same allegations by reference, thus it is

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time-barred too. Because an indictment must allege an overt act within the

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limitations period, and because the original indictment failed to do so, it was and is

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untimely. The superseding indictment that relies on it to be valid and timely thus

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also fails. Dismissal should result.

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B.

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Even if the original indictment was timely, the superseding


indictment does not relate back for statute of limitations purposes
because it substantially amended and broadened the original
indictment.

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Even if an original indictment is timely, a superseding indictment does not

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relate back to it if it broadens or substantially amends the charges in the original

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indictment. United States v. Sears, Roebuck & Co., 785 F.2d 777, 778-79 (9th Cir.

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1986). See also United States v. Hickey, 580 F.3d 922, 929 (9th Cir. 2009)

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(finding relation back because the superseding indictment did not broaden or

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substantially amend the original indictment). To determine whether the

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superseding indictment impermissibly changed the charges in the original

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indictment it is necessary to examine the two indictments carefully. Sears,

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See supra, at n.4.


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Roebuck, 785 F.2d at 779. See United States v. Liu, 731 F.3d 982, 996-97 (9th Cir.

2013) (To determine whether a superseding indictment substantially broadens or

amends a pending timely indictment, . . . it is appropriate to consider 'whether the

additional pleadings allege violations of a different statute, contain different

elements, rely on different evidence, or expose the defendant to a potentially

greater sentence.).

The superseding indictment adds six crucial overt acts. As the government

well knows, those acts are the difference between a time-barred indictment and a

timely one. And they introduce a new factual matrix as well: the question is no

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longer whether Mr. Spanier knew that Argyll was selling stock to funds loans and

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was making false representations to induce borrowers to pledge stock. Now the

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factual question is whether there was an after-the-fact cover-up; whether there was

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lulling that constitutes an offense within the limitations period, or whether the

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alleged conspiracy had already been completed.

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An entirely different body of law governs these questions, and would subject

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Spanier to a host of new jury instructions and litigation. In Grunewald v. United

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States, 353 U.S. 391, 406 (1957), for example, the government alleged a tax-

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related conspiracy, and the question was whether criminal conduct fell within the

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applicable statute of limitations. First, the Court rejected the argument that an

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agreement to conceal a conspiracy can extend the statute of limitations: after the

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central criminal purposes of a conspiracy have been attained, a subsidiary

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conspiracy to conceal may not be implied from circumstantial evidence showing

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merely that the conspiracy was kept a secret and that the conspirators took care to

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cover up their crime in order to escape detection and punishment. Id. at 401-02

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(citing Krulewitch v. United States, 336 U.S. 440, 444 (1949) (plausible

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arguments could generally be made in conspiracy cases that most out-of-court

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statements offered in evidence tended to shield co-conspirators. We are not

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persuaded to adopt the Government's implicit conspiracy theory which in all

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criminal conspiracy cases would create automatically a further breach of the

general rule against the admission of hearsay evidence.)) See also Lutwak v.

United States, 344 U.S. 604, 617 (1953) (same).

Grunewald also held that the district courts instructions to the jury were

erroneous. The Could held that this was so because [t]he jury was never told that

these overt acts of concealment could be taken as furthering the conspiracy only if

the basic criminal aim of the conspiracy was not yet attained [within the limitations

period]. On the charge as given, the jury might easily have concluded that the

petitioners were guilty even though they found merely (1) that the central aim of

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the conspiracy was accomplished in 1949, and (2) that the subsequent acts of

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concealment were motivated exclusively by the conspirators' fear of a conspiracy

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prosecution. 353 U.S. at 414.

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Ninth Circuit law confirms that a defendant is entitled to have the fact-finder

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instructed on a statute-of-limitations defense. In fact, it can be plain error not to do

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so. In United States v. Fuchs, 218 F.3d 957, 961 (9th Cir. 2000), for example, the

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defendant in a conspiracy case moved to dismiss the case on statute-of-limitations

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grounds. But neither the government nor the defense asked the district court to

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include the question of limitations in the jury instructions. Id. The Ninth Circuit

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reversed, holding that the omission was plain error. Considering that a statute of

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limitations instruction is clearly required under established Supreme Court law and

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that the defendants had previously moved to dismiss the indictment [on those

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grounds] the Court held, the trial court's error was plain. Id. at 952.

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All of which is to say that the governments new allegations substantially

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alter and broaden the charges against Mr. Spanier. Simply put, this is much a

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different case than the one the government charged in July. These theories and

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factual questions substantially amend and broaden the July 1st indictment such that

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the superseding indictment does not relate back. The statute of limitations is not

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tolled accordingly, and the superseding indictment must be dismissed in its

entirety.

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II.

Even if the Court does not dismiss Count 1, the substantive securitiesfraud charge in Count 2 is not a continuing offense, it was completed in
2004 at the latest, and thus it should be dismissed as time-barred.

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Count 2 of the superseding indictment charges that beginning in or around

February 2003 and continuing up to and including March 14, 2012, 7 Mr. Spanier

and others did use and employ manipulative and deceptive devices and

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contrivances in connection with the purchase and sale of securities in violation of

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Title 17, Code of Federal Regulations, Section 240.10b-5, by (a) employing

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devices, schemes, and artifices to defraud; (b) making untrue statements of

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material fact and omitting to state facts necessary in order to make the statements

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made, in light of the circumstances under which they were made, not misleading;

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and (c) engaging in acts, practices, and courses of business which operated and

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would operate as a fraud and deceit upon purchasers of securities.


Even if the Court does not dismiss Count 1, this count should be dismissed

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because it does not allege a particular offense, and it certainly does not allege a

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offense within the limitations period.

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A.

Securities fraud is not a continuing offense; it is completedand


the statute begins to runas soon as all of the elements are
present.
By alleging a sweeping course of conduct from 2003 until 2012, the

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government seems to believe that securities fraud is a continuing offense. But it is

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Again, the government continues to tinker with the end-date of the alleged
conspiracy, sometimes claiming that it continued up to October of 2013, and
sometimes alleging that it continued through March of 2012. Thus, even beyond
the legal authority holding that it is the last overt act that matters, the governments
allegations regarding the end-date of any conspiracy are demonstrably arbitrary.
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not, and this misunderstanding wreaks havoc on this count of the indictment. The

seminal case on continuing offenses is United States v. Toussie, 397 U.S. 112

(1970). In Toussie, the Supreme Court held that failing to register for the draft was

not a continuing offense for statute of limitations purposes, even though the

defendant repeated his failure to register every successive day. The Court

explained that the doctrine of continuing offenses should be applied in only

limited circumstances and further relied on the principle that criminal limitations

statutes are to be liberally interpreted in favor of repose. Id. at 115.

The Ninth Circuit applies Toussie faithfully, to the extent that it has

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articulated a presumption against continuing offenses. This court has held that

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there is a presumption against finding continuing violations unless the language of

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the statute compels such a conclusion or the nature of the crime involved is such

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that Congress must assuredly have intended that it be treated as a continuing one.

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United States v. Nash, 115 F.3d 1431, 1441 (9th Cir. 1997). See also United States

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v. Niven, 952 F.2d 289, 291 (9th Cir. 1991). 8

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And under Ninth Circuit law, securities fraud was already not a continuing

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offenseeven before Toussie. In Carroll v. United States, 326 F.2d 72, (9th Cir.

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1963), the government alleged fraud in the sale of securities under 15 U.S.C.

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77q(a). For three of the counts in the indictment, the investors confirmed the stock

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purchase and paid for it outside of the limitations period, but the actual stock

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certificates were mailed inside the limitations period. The question was whether

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Traditional continuing offenses include, for example, escape from federal


custody, kidnapping, and crimes of possession. Id. (citing United States v.
Rodriguez-Moreno, 526 U.S. 275, 281-82 (1999) (kidnapping); United States v.
Bailey, 444 U.S. 394, 413 (1980) (escape from federal custody); United States v.
Waters, 23 F.3d 29, 36 (2d Cir. 1994) (unlawful possession of a firearm)). Each of
these crimes, by their nature, continue after the offense is initially committed. The
same is not true for securities fraud, which is complete as soon as the stock
transaction is consummated.
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the resulting indictmentwhich was returned more than five years after payment

was made but less than five years after the certificates were mailedwas time-

barred. Id. at 86. The Ninth Circuit began with the premise that [t]t is established

law that the statute of limitations begins to run when an offense is completed. It

then observed that substantive mail fraud is deemed completed when the

defendants received the money that was intended to be obtained by their fraud, and

that certain subsequent transactions (banking transactions) were merely incidental

and collateral to it, and not a part of it. Id. It affirmed the same rule for securities

fraud. Accordingly, the Court held that once an offer, acceptance, and payment

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occurred for the stock, then the offense was complete. Id. This was so even

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though victims mailed the actual stock certificates afterwards within the limitations

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period. Id. Accordingly, the Court of Appeals reversed the convictions, holding

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that they were time-barred. 9


Thus, even taking the governments allegations at face value, the crime of

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securities fraud was complete as soon as the first investor was defraudedback in

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2004 or so, according to the governments claims. The allegations twelve years

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later are time-barred.

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For additional authority holding that securities fraud is not a continuing


offense, see United States v. Motz, 652 F. Supp. 2d 284, 294 (E.D.N.Y. 2009)
(securities fraud under 18 U.S.C. 1348 is not a continuing offense); Sanders v.
United States, 415 F.2d 621, 626 (5th Cir. 1969) (under 15 U.S.C. 77q(a), each
fraudulent offer or sale of any security accompanied by mailing or use of any
means or instruments of transportation or communication in interstate commerce is
a separate crime). See also In Finkel v. Stratton Corporation, 962 F.2d 169, 173
(2d Cir. 1992) (holding that statute of limitations begins to run in securities-fraud
case at the moment that the parties become contractually bound to the deal
even if the parties have not yet fully performed on the contract for sale).

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B.

The fact that the government has made the indictment hopelessly
duplicitious should not save it from dismissalespecially
when all of the potential crimes are barred by the statute
of limitations.
The government may respond that the fraud alleged in Count 2 did not end

with the first investor, arguing essentially that there are dozens of incidents within
that count that could support a conviction. But that is the governments problem,
not its solution. Rampant duplicity and vagueness exacerbate rather than cure a
statute of limitations problem. Throwing dozens of potential charges into one
count is the definition of duplicity, many times over. This lack of specificity is
also unconstitutionally vague, and it could create Double Jeopardy problems to the
extent it does not reveal the precise charges that Mr. Spaniers jury will pass upon.
And perhaps most importantly here, it creates the likelihood that the jury could
convict for an act that had long been completed outside of the limitations period.
The law does not permit that result.
For all of these reasons, the Court should dismiss Count 2 of the superseding
indictment for being both time-barred and hopelessly vague and duplicitous.

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Conclusion
For all of these reasons, Mr. Spanier asks that these motions be granted.
Dated: November 1, 2016
Respectfully Submitted,

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S/ Timothy A. Scott

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____________________________
TIMOTHY A. SCOTT
Law Offices of
Timothy A. Scott, APC
Attorneys for Mr. Spanier

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Case
Case3:16-cr-01545-BEN
3:16-cr-01545-BEN Document
Document54-2
1 Filed
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Page1 1ofof1515

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"

'201& JUL -I PH 2: 62

SOUTHERN DiSTRiCT Of CAllF{)Rt lA

CLERK US DiSTRICT COUI'!

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UNITED STATES DISTRICT COURT


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SOUTHERN DISTRICT OF
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~LIFORNIA
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March 2015 Grand Jury


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UNITED STATES OF AMERICA,

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I N D I C T MEN
---r-

Plaintiff,

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JEFFREY R. SPANIER,
Defendant.

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~--------------------------------~

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The Grand Jury charges:

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INTRODUCTORY ALLEGATIONS

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At all times material to this Indictment

23

1.

24

Title ~8, U.S.C., Sec. 371 Conspiracy; Title 18, U.S.C.,


Sec. 1341 - Mail Fraud; Title 18,
U.S.C., Sec. 1343 - Wire Fraud;
Title 15, U.S.C., Sees. 78j (b) and
78ff - Securities Fraud; Title 18,
U.S.C., Sec. 2 - Aiding and
Abetting; Title 18, U.S.C.,
Sees. 981(a) (1) (C), 984, and
Title 28, U.S.C., Sec. 2461(c) Criminal Forfeiture

v.

15

16CR 154 5 BEN

Case No.

Defendant JEFFREY R. SPANIER was a resident of Delray Beach,

Florida.

25

2.

Amerifund
under

the

Capital
laws

the

State

LLC

26

formed

27

controlled by defendant JEFFREY R. SPANIER.

28

//
MGW:nlv(l) :San Diego
7/1/16

of

Finance,

of

("ACF")

was

Florida

and

a
was

corporation
owned

and

Case
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Page2 2ofof1515

3.

Amerifund
the

laws

of

Group,
the

LLC

formed

controlled by defendant JEFFREY R. SPANIER.

under

Capital

State

of

("ACG")

was

Florida

and

was

ACF and ACG purported to operate a

4.

corporation
owned and

stock lending business

that specialized in originating stock loans for business executives.

Defendant JEFFREY R.

ACG were direct lenders, and also served as the "retail" arm of other

lenders,

Investments,

10

SPANIER,

represented to the public that ACF and

including but not limited to, Argyll Equities, LLC, SW Argyll


LLC, Ayuda Funding,

LLC, and Amerifund Capital Holdings,

LLC.
Argyll Equities, LLC was a corporation formed under the laws

5.

11

12

of

the

State

of

13

California and Savannah, Georgia.

14

(now

15

McClain, Jr., charged elsewhere,

16

Jr.")

deceased)

Texas

(hereinafter

6.

SW Argyll

laws

of

17

the

State

the

19

San Diego,

20

Miceli and McClain, Jr.


7.

California

The Argyll

of
and

to

do

business

in

San Diego,

Its principals were James T. Miceli

referred

to

as

"Miceli")

and

Douglas

(hereinafter referred to as "McClain,

Investments,

18

21

and purported

LLC was
and

Texas

Savannah,

corporation formed under

purported
Georgia.

to
Its

do

business

principals

in

were

entities referred to in paragraphs 5 through 6

22

(hereinafter,

23

to the public by defendant JEFFREY R.

24

institutional lender with significant assets that were in the business

25

of

26

which

27

collateral for the loans ARGYLL made.

28

making

collectively referred to as

loans

would

to

accept

corporate
stock

SPANIER,

executives

(either

"ARGYLL"), were represented

and

restricted

and others,

other
or

to be an

individuals

and

unrestricted)

as

Case
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Count 1

[18 U.S.C. 371]

Conspiracy

8.

are

herein.

9.

The allegations set forth in paragraphs 1

realleged

and

incorporated by

reference

as

if

through 7 above
fully

set

forth

Beginning in at least February 2003 and continuing up to and

including October 2S, 2013, within the Southern District of California

and

elsewhere,

defendant

JEFFREY

R.

SPANIER,

T.

deceased),

II

conspirators,

12

persons

known

13

against

the

14

Title 18,

IS

of Title 18,

16

in violation of Title IS,

17

and Title 17, Code of Federal Regulations, Section 240.10b-S.


10.

knowingly
and

United

conspired

unknown

to

States,

United States Code,

and

the

to

charged elsewhere,

Miceli

10

18

and Douglas McClain, Jr.,

James

agreed

grand

wit:

jury,

mail

Section 1341;

United States Code,

with
to

fraud,

and other co-

each

other,

commit
in

wire fraud,

(now

offenses

violation

of

in violation

Section 1343; and securities fraud,

United States Code,

Sections 78j and 78ff,

It was the purpose and object of the conspiracy to devise a

19

scheme and artifice

20

clients

21

pretenses, representations, promises and omissions of material fact.

to defraud and obtain money from borrowers and

of ACF and ACG by means

of

false,

fraudulent

22

Methods and Means by Which Objects of the

23

Conspiracy Were to be Accomplished

24

11.

2S

thereof,

26

and means, among others:

27

II

28

and

and material

In furtherance of the conspiracy and to effect the obj ects


defendant JEFFREY R.

SPANIER utilized the following methods

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Defendant JEFFREY R.

a.

SPANIER,

and others,

would induce

potential borrowers to pledge stock the borrowers owned in publicly

traded securities as collateral for

misleading

substantial independent sources of cash to lend.

representations

ARGYLL,

Defendant JEFFREY R.

b.

that

and

SPANIER,

potential borrowers

traded securities as collateral for

misleading

10

loans by false,

fraudulent,

other

lenders,

and others,

and
had

would induce

to pledge stock the borrowers owned in publicly

representations

that

loans by false,

their

stock

fraudulent,

would

be

and

held

in

safekeeping and not be sold unless the borrower defaulted on the loan.
c.

11

Defendant JEFFREY R.

SPANIER,

and others,

would induce

12

borrowers to execute documents transferring shares the borrowers owned

13

in publicly traded securities to ARGYLL, and other lenders, by making

14

false,

15

other lenders, would abide by all securities laws,

16

which

17

securities outside of certain guidelines and reporting requirements.

fraudulent,

restricts

d.

18

and

misleading

affiliated

representations

persons

from

that

ARGYLL,

and

including Rule 144

selling

publicly

traded

Defendant JEFFREY R. SPANIER, would induce borrowers to

19

execute documents transferring shares the borrowers owned in publicly

20

traded securities to ARGYLL by falsely representing that he was only

21

receiving as much as

22

receiving substantial incentive fees which exceeded 5%.


e.

23

in

fees,

when,

Defendant JEFFREY R.
make

quarterly

in

SPANIER,

interest

truth and

and others,
on

he

was

would induce
loans

ARGYLL

borrowers

25

purportedly made by falsely representing that the stock they pledged

26

as collateral for the loans was safe and would be returned to them as

27

long as they continued to make all of their interest payments timely.


4

payments

fact,

24

28

to

5%

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OVERT ACTS

12.

In

furtherance
the

said

elsewhere:
2003

and

acts,

and

1,

overt

effect

others, were committed within the Southern District of California, and

February

following

to

Between

the

and

accomplish

a.

thereof,

conspiracy

objects

of

January

among

29,

2004,

JEFFREY R. SPANIER negotiated four loan agreements with borrower PB in

which PB pledged 1,250,000 shares of common stock PB held in ATP Oil

and Gas Corporation, a publicly traded company listed on the National

10

Association

11

("NASDAQ"),

12

ARGYLL.

13

of
as

b.

Securities
collateral

On

or

for

before

four

Automated
loans

February

totaling

27,

2004,

from

JEFFREY

R.

SPANIER

in which

GS

pledged

500,000 shares of common stock GS held in ATP Oil and Gas Corporation,

16

17

$1.5 million loan from ARGYLL.


On

c.

or

GS

$3,277,750

15

company

with borrower

System

negotiated a

publicly traded

agreement

Quotation

14

18

loan

Dealers

listed on NASDAQ,

before

April

2004,

loan

20

1.19 million

shares

21

International,

22

NASDAQ, as collateral for a $4.1 million loan from ARGYLL.

23

d.

common

("MSI"),

stock

LP

LP

JEFFREY

negotiated a

of

with borrower

collateral

19

Inc.

agreement

20,

as

R.

in which

held

in

for

SPANIER

LP pledged

Mace

Security

a publicly traded company listed on the

Between June 2004 and December 2005, JEFFREY R. SPANIER

24

facilitated

25

Directivos Servia S.A. de C.V.

26

14,178,193 publicly traded American Depository Receipts of Grupo TMM

27

S.A. de C.V.

28

the

execution

of

14

loan

agreements

with

Servicios

("SDS") in which SDS pledged a total of

("TMM") as collateral for loans totaling $23,157,078.

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e.

On

or

before

December

16,

2008,

JEFFREY

R.

SPANIER

requested that borrower JC payoff a loan that JC obtained from ARGYLL

in the amount of $3,462,500.

On or about May 8,

f.

2009,

JEFFREY

R.

SPANIER sent

an

e-mail to JC in which he assured JC that stock he had pledged for his

loan would be returned to him.

g.

On
a

or

loan

before

agreement

May

2009,

22,

wi th

borrower

JEFFREY
in

RS

which

R.
RS

SPANIER
pledged

negotiated

1,000,000 shares of common stock RS held in Vu1 Corporation ("VUl"),

10

publicly traded company listed on the Over The Counter Bulletin Board

11

("OTCBB"), to Amerifund Capital Holdings, LLC.

12

h.

On

or

about

September

29,

2009,

JEFFREY

R.

SPANIER

13

caused borrower DA to execute a

loan agreement in which DA pledged 1

14

million shares of common stock DA held in Provectus Pharmaceuticals,

15

Inc.

("PVCT").
On

i.

16

loan

before

agreement

December
with

1,

2009,

borrower

SW

JEFFREY
in

which

R.

SPANIER

SW

pledged

17

negotiated

18

700,000 shares of common stock that

19

Realty

20

Exchange ("NYSE"), as collateral for a $4.3 million loan from ARGYLL.

21

or

("DDR"),

j.

On

publicly

or

about

sw

traded

December

owned in Diversified Developers

company

10,

on

2009,

the

New

JEFFREY

York

R.

Stock

SPANIER

22

caused a wire transfer in the amount of $410,977 to be sent to him of

23

which $273,480 was a back end fee that was not disclosed to SW prior

24

to executing the loan agreement with ARGYLL.

25

k.

On

26

negotiated a

27

million shares of

28

or

before

loan agreement

March

4,

2010,

with borrower KY

JEFFREY

R.

SPANIER

in which KY pledged 1

common stock KY held in China Armco Metals,

Inc.

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("CNAM"),

a publicly traded company on the NYSE,

$4.68 million loan from ARGYLL.


1.

On
loan

before

agreement

April
with

22,

2010,

borrower

TP

JEFFREY
in

R.

which

SPANIER

negotiated

500,000 shares of common stock TP held in Searchlight Minerals,

("SM") ,

for a $270,000 loan from ARGYLL.

a publicly traded company listed on the OTCBB,

m.

8
9

or

as collateral for a

negotiated

On
a

or

loan

before

February

agreement

with

18,

2011,

borrower

FB

TP

as

JEFFREY
in

which

pledged
Inc.

collateral

R.

SPANIER

FB

pledged

10

52,246 shares of common stock that FB held in First PacTrust Bancorp,

11

Inc.

12

cOllateral in exchange for a $557,726.05 loan from ARGYLL.

("FPTB"),

13

n.

publicly

On
a

or

loan

traded

before

March

14

negotiated

15

750,000 shares of common stock RS

16

publicly

17

$207,900 loan from ARGYLL.

traded

o.

18

agreement

company

company

with

listed

15,

listed on

2011,

borrower

RS

the

NASDAQ,

JEFFREY
in

which

R.

SPANIER

RS

pledged

held in VU1 Corporation


on

the

OTCBB,

as

as

("VU1"),

collateral

for

a
a

On or about March 30, 2011, JEFFREY R. SPANIER received

19

a wire transfer in the amount of $38,244.07 of which $15,935.03 was a

20

back-end fee

21

executing the loan agreement.

22

p.

for the FB loan which was not disclosed to FB prior to

On or about March 30, 2011, JEFFREY R. SPANIER received

23

a wire transfer in the amount of $26,895 of which $16,500 was a back-

24

end

25

executing the loan agreement.

fee

for

26
27
28

q.
negotiated

the

On
a

loan

RS

or

loan

which

before

agreement

was

April
with

not

1,

disclosed

2011,

borrower

CW

to

JEFFREY
in

which

RS

R.
CW

prior

to

SPANIER
pledged

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1,000,000

shares

Inc. ("QBC") ,

Equities exchange

from ARGYLL.

r.

sv

of

common

publicly

stock

traded

that

CW

company

("NYSE Amex"),

as

held

listed

in
on

collateral for

Cubic
the

NYSE

Amex

$358,000

loan

On or before April 21, 2011, JEFFREY R. SPANIER caused

borrower

to transfer

in

company, as collateral for a $1.9 million loan from ARGYLL.

Elephant

s.

Energy,

Talk

1,300,000 shares of common stock that SV held

Communication,

Inc.

On or about May 11,

("ETAK"),

2011,

JEFFREY R.

publicly

traded

SPANIER received

10

wire transfers in the amount of $158,196 and $65,912 from the sale of

11

ETAK shares pledged by SV.

12

All in violation of Title 18, united States Code, Section 371.

13

Counts 2-7

14

[18 U.S.C. 1341 and 2]

15

Mail Fraud

16

13.

The allegations set forth in paragraphs 1 through 7, and 11

17

through 12 above are realleged and incorporated by reference as

18

fully set forth herein.

19

14.

if

Beginning in at least February 2003 and continuing up to and

20

including

21

California,

22

Miceli

23

with the intent to defraud, devised and intended to devise, a material

24

scheme

25

property

26

representations,

27

described in paragraphs 11 through 12 of Count 1.

28

October
and

25,

elsewhere,

(now deceased),

to defraud as
by

2013,

means

of

within

defendant

the

Southern

JEFFREY

and Douglas McClain,

to material matters
materially

promises,

or

false

omissions

R.

Jr.,

and to
and
of

District

SPANIER,

James

of
T.

charged elsewhere,

obtain money and

fraudulent
material

pretenses,
facts,

as

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Execution of the Material Scheme by Mail

15.

On or about the dates set forth below,

within the Southern

District of California, defendant JEFFREY R.

(now deceased),

purpose of executing and attempting to execute the aforesaid scheme

caused to be placed in a United States post office or other authorized

depository for mail matter, or private commercial carrier,

delivered by the United States Postal Service or United Parcel Service

according to the directions thereon, as set forth below:

and Douglas McClain,

Jr.,

SPANIER,

James T. Miceli

charged elsewhere,

for the

items to be

10
11
12

Count

Date

Sender

Addressee

Item

2/25/2010

SW
Beachwood,
Ohio

ARGYLL
San Diego, CA

Check

8/26/2010

SW
Beachwood,
Ohio

ARGYLL
San Diego, CA

Check

10/7/2010

KY
San Mateo, CA

ARGYLL
San Diego, CA

Check

1/5/2011

KY
San Mateo, CA

ARGYLL
San Diego, CA

Check

2/8/2011

TP
Cottonwood,
AZ

ARGYLL
San Diego, CA

Check

3/28/2011

FB
San Diego, CA

Amerifund
Boca Raton, FL

Promissory
Note

13
14

15
16
17
18
19

20
21
22
23
24
25
26
27
28

All in violation of Title 18, United States Code, Sections 1341 and 2.
9

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Counts 8-18

[Title 18 U.S.C. Sec. 1343 and 2]

Wire Fraud

16.

The allegations

set

forth

in paragraphs 1 through 7,

and

11 through 12 above are realleged and incorporated by reference as if

fully set forth herein.

17.

Beginning in at least February 2003 and continuing up to and

including

October

California,

and

25,

2013,

elsewhere,

(now deceased),

within

defendant

the

Southern

JEFFREY

James

T.

Miceli

11

devised and intended to devise a material scheme to defraud as

12

material matters and to obtain money from persons by materially false

13

and

14

omissions

15

Count 1.

16

of

pretenses,

fact,

as

representations,

described

in

Jr.,

SPANIER,

of

10

fraudulent

and Douglas McClain,

R.

District

charged elsewhere,

promises,

paragraphs

11

or

to

material

through

12

of

Execution of Material Scheme by Wire Communications

17

18.

On or about the dates set forth below, within the Southern

18

District of California,

19

James

20

elsewhere,

for the purpose of executing the aforementioned material

21

scheme

defraud

22

fraudulent

23

cause to be transmitted, in interstate and foreign commerce, by means

24

of wire,

25

signals, pictures, and sounds set forth below:

26

II

27

II

28

T.

to

Miceli

(now deceased),

and

pretenses,

radio,

and elsewhere,

to

defendant JEFFREY R.

and Douglas

obtain money

representations,

and

McClain,

property

promises,

and television communication,

10

did

SPANIER,

Jr.,

by

charged

false

and

transmit

and

the writings,

signs,

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Count

Date

Sender

Addressee

Communication

12/10/2009

SW ARGYLL
BofA Acct. #
0526
San Diego, CA

Amerifund
Iberia Bank Acct.
# 0663
(formerly
Sterling Bank)
Delray Beach, FL

Wire transfer
in the amount
of $410,977.00

4/9/2010

SW ARGYLL
BofA Acct #
3952
San Diego, CA

Amerifund
Iberia Bank Acct
# 0663 (formerly
Sterling Bank)
Delray Beach, FL

Wire transfer
in the amount
of $425,000

10

5/18/2010

SW ARGYLL
BofA Acct #
3952
San Diego, CA

Amerifund
Iberia Bank Acct
(formerly
# 2968
Sterling Bank)
Delray Beach, FL

Wire transfer
in the amount
of $402,892.80

11

6/24/2010

SW ARGYLL
BofA Acct #
3952
San Diego, CA

Amerifund
Iberia Bank Acct
# 2968
(formerly
Sterling Bank)
Delray Beach, FL

Wire transfer
in the amount
of $338,910

12

4/14/2011

SW ARGYLL
BofA Acct #
3952
San Diego, CA

Amerifund
Iberia Bank Acct
# 2968
(formerly
Sterling Bank)
Delray Beach, FL

Wire transfer
in the amount
of $26,250

13

4/15/2011

SW ARGYLL
BofA Acct #
3952
San Diego, CA

Amerifund
Iberia Bank Acct
(formerly
# 2968
Sterling Bank)
Delray Beach, FL

Wire transfer
in the amount
of $43,750

14

4/21/2011

Jeffrey
Spanier
Delray Beach,
FL

SV
Brussels, Belgium

e-mail
communication
regarding
transfer of
ETAK shares

15

5/11/2011

SW ARGYLL
Bank of
America
Acct # 3952
San Diego, CA

Amerifund
Iberia Bank Acct
(formerly
# 2968
Sterling Bank)
Delray Beach, FL

Wire transfer
in the amount
of $65,915

2
3
4
5

6
7
8

10
11

12
13
14
15
16

17
18
19
20
21
22
23
24

25
26
27
28

11

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16

5/11/2011

SW ARGYLL
Bank of
America
Acct # 3952
San Diego, CA

Amerifund
Iberia Bank Acct
# 2968
(formerly
Sterling Bank)
Delray Beach, FL

Wire transfer
in the amount
of $158,196.24

17

5/19/2011

Jeffrey
Spanier
Delray Beach,
FL

DD/Goldman Sachs
Chicago, IL

e-mail
communication
re payoff of SW
loan

18

6/15/2011

JEFFREY R.
SPANIER
Delray Beach,
FI

RS
Seattle, WA

e-mail

2
3
4

5
6

7
8
9

10

communication

re return of
stock after FBI
search warrant

11

execution

12
13

All in violation of Title 18, United States Code, Sections 1343 and 2.
Count 19

14

[15 U.S.C. 78j (b), 78ff and 18 USC 2]

15

securities Fraud

16
19.

17
18
19

22
23
24
25
26
27
28

allegations

set

forth

in paragraphs

through

7,

and

11 through 12 above are realleged and incorporated by reference as if


fully set forth herein.
20.

20
21

The

and

Beginning in or around February 2003

including

California
Miceli

and

October

25,

elsewhere,

(now deceased),

2013,

within

defendant

the

JEFFREY

and Douglas McClain,

did knowingly and willfully,

and continuing up to
Southern

R.
Jr. ,

District

SPANIER,

James

of
T.

charged elsewhere,

directly and indirectly,

by the use of

the means and instrumentalities of interstate commerce, the mails, and


the

facilities

of

national

securities

exchanges,

use

and

employ

manipulative and deceptive devices and contrivances in connection with

12

Case
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Page1313ofof1515

the purchase and sale of securities in violation of Title 17, Code of

Federal

schemes,

material fact and omitting to state facts necessary in order to make

the statements made,

were made,

courses of business which operated and would operate as a

deceit upon purchasers of securities.

All in violation of Title 15, United States Code, Sections 78j(b) and

Regulations,

Section

and artifices

to defraud;

(b)

by

(a)

making

employing

devices,

untrue statements of

in light of the circumstances under which they

not misleading;

Title 17,

240.10b-5,

Code of

and

(c)

engaging in acts,

10

78ff,

Federal Regulations,

'11

Title 18, United States Code, Section 2.

practices,

fraud and

Section 240 .10b-5,

12

Criminal Forfeiture Allegation

13

[Title 18, United States Code, Sections 981(a) (1) (C), 984 and

14

Title 28, United States Code, Section 2461(c)]

15

21.
reference

17

criminal

18

States Code,

19

Code, Section 2461(c).


22.

as

though set

forfeiture

As

forth

pursuant

in full

to

result

of

the

the purpose of

the provisions of

Sections 981(a) (1) (C),

for

984,

Title

and Title 28,

commission

of

the

22

R.

23

real

24

traceable to those offenses, including but not limited to:

United

offenses

defendant JEFFREY

SPANIER shall forfeit to the United States any and all property,
and

personal,

25

28

18,

foregoing

alleged in Counts 1 through 19 of this Indictment,

27

charging

United States

21

26

and

Counts 1 through 19 are realleged and incorporated herein by

16

20

and

which

constitutes

or

is

deri ved

from

proceeds

Real Property

a.

The real property located at located at 16013


D' Alene Drive, Delray Beach, Florida 33446, and
all
appurtenances
affixed
thereto.
The
real
property is more particularly described as:
13

Case
Case3:16-cr-01545-BEN
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Page1414ofof1515

PROPERTY ID. NO.: 00-42-46-20-16-000-0020

Lot 2, DELRAY TRAINING CENTER P. U. D. - PARCEL B,


according to the map or plat thereof, as recorded
in Plat Book 86, Page 157, of the Public Records
of Palm Beach County, Florida.

Financial Accounts at Wachovia Bank

All monies,

b.

funds and credits in Wachovia Bank Account

xxxxxxxx6242, in the name of Amerifund Capital Finance,

LLC.

c.

All monies,

funds and credits in Wachovia Bank Account

xxxxxxxxx7113, in the name of Jeffrey Spanier.

10
d.

11

All monies,

funds and credits in Wachovia Bank Account

xxxxxxxxx6481, in the name of Regina Spanier.

12
13

Financial Accounts at Iberia Bank

e.

14

All monies,

funds and credits in Iberia Bank (formerly

15

Sterling

16

Amerifund Capital Finance, LLC.


All monies,

f.

17

Bank)

Account

xxxxxx0663 ,

Sterling

19

Amerifund Capital Finance LLC.


23.

In

the
or

is

event

Bank)

that

derived

the

name

Account

xxxxxx2968,

any property,

from

proceeds

real

in

or

21

constitutes

22

described in Counts 1 through 19 of this Indictment,

23

any act or omission of the defendant:

traceable

the

name

personal,
to

the

offenses

as a result of

(1)

cannot be located upon the exercise of due diligence;

25

(2)

has

26
27
28

transferred or sold

to,

or

of

which

24

been

of

funds and credits in Iberia Bank (formerly

18

20

in

deposited with,

third parties;
(3)

has been placed beyond the jurisdiction of the courts;


14

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Page1515ofof1515

(4)

has been substantially diminished in value; or

(5)

has been co-mingled with other property which cannot be

divided without difficulty; any other property of the defendant, up to

the

pursuant to Title 18, united States Code,

United States Code, Section 853.

All

Sections

value

of

$81,000,000

violation

in

shall

of

981 (a) (1) (C),

984

be

Title
and

forfeited

18,
Title

to

DATED:

united
28,

United

July 1, 2016.

11

A TRUE BILL:

13

Foreperson

14

LAURA E. DUFFY

: ::t'd~
17

t.-

jffciiAEwlm

~7 Assistant U. S. Attorney

18
19
20
21
22
23

24
25

26
27

28

15

United States

Section 982, and Title 21,

9 Section 2461 (c) .


10

the

States
States

Code,
Code,

Case 3:16-cr-01545-BEN Document 54-3 Filed 11/01/16 Page 1 of 12


I

d :.-...
~

atbOCT 28 PM 2: 41

3
4

'i> - - . -"

,,JQ
"'''U----

r. ~~t"P"'t

~.

UNITED STATES DISTRICT COURT


8

SOUTHERN

DIST~ICT

OF CALIFORNIA

March 2015 Grand Jury

10
11 "UNITED STATES OF AMERICA
12

Plaintiff

Case No. 16CR1545-BEN

v.

13

14 II JEFFREY R. SPANIER

N D I C T MEN T

- (SupersedIng)

Title 18 U,S,C'
Sec. 371
Conspiracy; Title 15 U,S,C'
Secs. 78j (b) and 78ff - Securities
Fraud; Title 18 U.S.C. Sec. 2
Aiding and Abetting; Title 18
U. S . C. Sec s. 981 (a) (1) (C)
984 and
Title 28 1 U,S,C' I Sec. 2461(c)
Criminal Forfeiture
1

Defendant.

15

16

17
18
19 II

The Grand Jury charges:

20 II

INTRODUCTORY ALLEGATIONS

2111

At all times material to this Indictment

22

1.

23

II

2.
II

Defendant JEFFREY R. SPANIER was a resident of Delray Beach

Florida.

24
25

formed

Amerifund
under

the

Capital
laws

of

Finance
the

State

LLC
of

26 II controlled by defendant JEFFREY R. SPANIER.


27

//

28

//
JJO:nlv:San Diego

10/28/16

("ACF")

Florida

was
and

a
was

corporation
owned

and

Case 3:16-cr-01545-BEN Document 54-3 Filed 11/01/16 Page 2 of 12

3.

Amerifund
under

the

LLC

formed

controlled by defendant JEFFREY R. SPANIER.


4.

laws

Group,

the

Capital

State

of

("ACG")

was

Florida and

corporation

was

owned

and

ACF and ACG purported to operate a stock lending business that

5 II specialized

originating

stock

loans

for

business

executives.

6 II Defendant JEFFREY R. SPANIER, represented to the public that ACF and ACG
711were direct

lenders,

and also

served as

the

"retail"

arm of other

8 II lenders, including but not limited to, Argyll Equities, LLC, SW Argyll
9 II Investments,

10

LLC, Ayuda Funding, LLC,

and Amerifund Capital Holdings,

LLC.

11

5.

12 II of

Argyll Equities, LLCwas a corporation formed under the laws

the

State of

Texas

and purported

13 II California and Savannah, Georgia.


14 II (now

deceased)

(hereinafter

do bus

in San

Its principals were James T. Miceli

referred

15 II McClain, Jr., charged elsewhere,

to

to

as

"Miceli")

and

Douglas

(hereinafter referred to as "McClain,

161IJr.")
17 II

6.

1811laws

SW Argyll Investments, LLC was a corporation formed under the

of

the

State

of

Texas

and

purported

19 IISan Diego, California and Savannah, Georgia.

to

do

business

in

Its principals were Miceli

20 II and McClain, Jr.


21

referred to in paragraphs 5 through 6

The Argyll ent

7.

22 II (hereinafter,

collectively referred to as "ARGYLL"),

23 II to the public by defendant JEFFREY R.

SPANIER,

were represented

and others,

to be an

24 II institutional lender with significant assets that were in the business


25110f

making

2611which

loans

would

to

accept

corporate
stock

executives

(either

27

collateral for the loans ARGYLL made.

28

//
2

and

restricted

other
or

individuals

and

unrestricted)

as

Case 3:16-cr-01545-BEN Document 54-3 Filed 11/01/16 Page 3 of 12

Count 1

[18 U.S.C. 371]

Conspiracy

8.

The allegations set forth in paragraphs 1 through 7 above are

5 Ilrealleged and incorporated by reference as if fully set forth herein.


6

9.

Beginning in or around February 2003, and continuing up to at

7 II least March 14,

2012,

within the Southern District of California and

8 II elsewhere, defendant JEFFREY R. SPANIER, James T. Miceli (now deceased),


9 II and Douglas McClain,

Jr.,

charged elsewhere,

knowingly and willfully

10 II conspired and agreed with each other, and persons known and unknown to
11 lithe grand jury, to commit offenses against the United States, to wit:
12 II mail fraud,

in violation of Title 18, United States Code, Section 1341;

13 II wire fraud, in violation of Title 18, United States Code, Section 1343i
14 II and securities fraud,
15 II Sections

78j

and

in violation of Title 15,

78ff,

17,

and Title

Code

of

United States Code,


Federal

Regulations (

16 II Section 240.10b-5.
17 II

10.

It was the purpose and object of the conspiracy to devise a

18 II scheme and artifice


19 II clients

to defraud and obtain money from borrowers

of ACF and ACG by means

of

false,

fraudulent

and

and material

20 II pretenses, representations, promises and omissions of material fact.


21 II

Methods and Means by Which Objects of the

22 II

Conspiracy Were to be Accomplished

23 II

11.

In furtherance of the conspiracy and to effect the obj ects

24 II thereof, defendant JEFFREY R. SPANIER and others utilized the following


25 II methods and means, among others:
26 11//
27 II / /
28 11/ /
3

Case 3:16-cr-01545-BEN Document 54-3 Filed 11/01/16 Page 4 of 12

111

a.

Defendant JEFFREY R.

SPANIER,

and others, would induce

2 II potential borrowers to pledge stock the borrowers owned in publicly


3 II traded securities as collateral for loans by false,
411misleading

representations

that

ARGYLL,

and

fraudulent,

other

lenders,

and
had

5 II substantial independent sources of cash to lend.


611

b.

Defendant JEFFREY R.

SPANIER,

and others, would induce

7 II potential borrowers to pledge stock the borrowers owned in publicly


8 II traded securities as collateral for loans by false,
911 misleading

representations

that

their

stock

fraudulent,

would

be

held

and
in

10 II safekeeping and not be sold unless the borrower defaulted on the loan.
c.

II

Defendant JEFFREY R.

SPANIER, and others, would induce

12 II borrowers to execute documents transferring shares the borrowers owned


13 II in publicly traded securities to ARGYLL, and other lenders, by making
14 II false, fraudulent, and misleading representations that ARGYLL, and other
151/1enders, would abide by all securities laws,

including Rule 144 which

1611restricts affiliated persons from selling publicly traded securities


17 II outside of certain guidelines and reporting requirements.
18
19

d.

Defendant JEFFREY R.

SPANIER would induce borrowers to

execute documents transferring shares the borrowers owned in publicly

20 II traded securities to ARGYLL by falsely representing that he was only


21 II receiving as much as 5 percent in fees, when, in truth and fact, he was
22 II receiving substantial incentive fees whiCh exceeded
23
24

e.
borrowers

to

Defendant JEFFREY R.
make

quarterly

SPANIER,

interest

percent.

and others,

payments

on

would induce
loans

ARGYLL

25 II purportedly made by falsely representing that the stock they pledged as


26 II collateral for the loans was safe and would be returned to them as long
27 lias they continued to make all of their interest payments timely.
2811//
4

Case 3:16-cr-01545-BEN Document 54-3 Filed 11/01/16 Page 5 of 12

l II

OVERT ACTS

2 II

12.

In

furtherance

of

said

3 II accomplish the objects thereof,

411were

committed

within

the

conspiracy

and

to

effect

and

the following overt acts, among others,

Southern

District

of

California,

and

5 II elsewhere:
a.

6 II

Between February I,

2003 and January

29

2004, JEFFREY

711R. SPANIER negotiated four loan agreements with borrower PB in which PB


8 II pledged 1 / 250,000 shares of common stock PB held in ATP Oil and Gas
9 II Corporation,

publicly

traded

company

listed

on

the

National

10 II Association of Securities Dealers Automated Quotation System ("NASDAQII),


llllas collateral for four loans totaling $3 / 277 t 750 from ARGYLL.
1211

b.

13 II negotiated

On
a

or

loan

before

February

agreement

with

27,

2004

borrower

GS

JEFFREY

in

which

R.

SPANIER

GS

pledged

1411500,000 shares of common stock GS held in ATP oil and Gas Corporation,
15 II a

publicly

traded

company

listed

on

NASDAQ,

as

collateral

for

1611$1,500,000 loan from ARGYLL.

18

On

c.

17
negotiated

or

loan

before

April

agreement

wi th

20,

2004

borrower

JEFFREY

LP

in which

R.

SPANIER

LP

pledged

19111,190,000 shares of common stock LP held in Mace Security International t


20 II Inc.

("MSI II )

publicly

traded

company

listed

on

the

NASDAQ,

as

21 II collateral for a $4,100,000 loan from ARGYLL.


22
23

d.
facilitated

Between June 2004 and December 2005, JEFFREY R. SPANIER


the

execution

24 II Directi vos Servia S. A.


25

of

de C. V.

l4
(" SDS tI

loan
)

agreements

with

Servicios

in which SDS pledged a total of

1114,178,193 publicly traded American Depository Receipts of Grupo TMM

261IS.A. de C.V

("TMMII)

as collateral for loans totaling $23,157,078.

27 11/ /

28 11/ /

Case 3:16-cr-01545-BEN Document 54-3 Filed 11/01/16 Page 6 of 12

e.

On

or

before

December

16,

2008,

JEFFREY

R.

SPANIER

requested that borrower JC payoff a loan that JC obtained from ARGYLL

in the amount of $3,462,500.


f.

On or about May 8,

2009,

JEFFREY R.

SPANIER sent an

e-mail to JC in which he assured JC that stock he had pledged for his

loan would be returned to him.


g.

On

22,

with

2009,

borrower

RS

JEFFREY
in

which

R.
RS

SPANIER

1,000,000 shares of common stock RS held in Vu1 Corporation ("VU1"), a

10

publicly traded company listed on the Over The Counter Bulletin Board

pledged

to Amerifund Capital Holdings, LLC.

II
),

h.

12

agreement

May

negotiated

("OTCBB

loan

before

11

or

On

or

about

September

29,

2009,

loan agreement

JEFFREY

R.

SPANIER

13

caused borrower DA to execute a

in which DA pledged

14

1,000,000 shares of common stock DA held in Provectus Pharmaceuticals,

15

Inc.

("PVCT").

16

i.

17 II negotiated

On
a

loan

or

before

agreement

December
with

I,

2009,

borrower

SW

JEFFREY
in

which

R.

SPANIER

SW pledged

1811700,000 shares of common stock that SW owned in Diversified Developers


19 II Realty ("DDR"), a publicly traded company on the New York Stock Exchange
20/1 ("NYSE")

as collateral for a $4,300,000 loan from ARGYLL.


On or about December 10, 2009, JEFFREY R. SPANIER caused

j .

21
22

a wire transfer in the amount of $410,977 to be sent to him of which

23

$273,480 was a

back end fee

that was not disclosed to SW prior to

24 II executing the loan agreement with ARGYLL.

26 II negotiated
27

On

k.

25

11

loan

or

before

agreement

March
with

4,

2010,

borrower

KY

JEFFREY
in

which

R.
KY

SPANIER
pledged

1 ,000,000 shares of common stock KY held in China Armco Metals,

28
6

Inc.

~~-~

..

-------------

Case 3:16-cr-01545-BEN Document 54-3 Filed 11/01/16 Page 7 of 12

1 II

a publicly traded company on the NYSE,

("CNAM"),

as collateral for a

211$4,680,000 loan from ARGYLL.


1.

3
4 II

negotiated

On

loan

or

before

agreement

April
with

22,

JEFFREY

2010,

borrower

TP

in

R.

SPANIER

TP

pledged

which

511500,000 shares of common stock TP held in Searchlight Minerals,

Inc.

6 II ("SM"), a publicly traded company listed on the OTCBB, as collateral for

7 lIa $270,000 loan from ARGYLL.

m.

9 II negotiated

On
a

loan

or

before

agreement

February
with

18,

JEFFREY

2011,

borrower

FB

in

which

R.

SPANIER

FB

pledged

101152,246 shares of common stock that FB held in First PacTrust Bancorp,


11 II

Inc.

{"FPTB"},

publicly traded company

listed on the NASDAQ,

as

12 II collateral in exchange for a $557,726.05 loan from ARGYLL.

n.

13 II
14 II negotiated

On
a

loan

or

before

agreement

March
with

IS,

JEFFREY

2011,

borrower

RS

SPANIER

RS

pledged

in which

1511750,000 shares of common stock that RS held in VU1,


16 II company listed on the OTCBB,

R.

as collateral for a

a publicly traded
loan from

$207,900

17 II ARGYLL.

On or about March 30, 2011, JEFFREY R. SPANIER received

o.

18
19

a wire transfer in the amount of $38,244.07 of which $15,935.03 was a

20

back-end fee for the FB loan which was not disclosed to FB prior to

21 II executing the loan agreement.

p.

22 II

On or about March 30, 2011, JEFFREY R. SPANIER received

23

a wire transfer in the amount of $26,895 of which $16,500 was a back

24

end

25

executing the loan agreement.

fee

for

26
27 II negotiated
28111,000,000

the

on

q.

loan

shares

RS

or

loan

which

before

agreement
of

common

was

April
wi th

not

1,

disclosed

2011,

borrower

stock
7

that

CW

CW

to

RS

JEFFREY
in

held

which
in

R.

prior

to

SPANIER

CW pledged

Cubic

Energy,

Case 3:16-cr-01545-BEN Document 54-3 Filed 11/01/16 Page 8 of 12

1 II Inc. ("QBCII), a publicly traded company listed on the NYSE Amex Equities
211exchange ("NYSE Amex
3 II

r.

On

ll
),

or

as collateral for a $358,000 loan from ARGYLL.


before

April

21,

2011,

JEFFREY

R.

SPANIER

4 II caused borrower sv to transfer 1,300,000 shares of common stock that SV


5 II held in Elephant Talk Communication,

("ETAK II ), a publicly traded

Inc.

6 II company, as collateral for a $1,900,0000 loan from ARGYLL.


7 II

s.

On or about May 11,

2011,

JEFFREY R.

SPANIER received

811wire transfers in the amounts of $158,196 and $65,912 from the sale of
9 IIETAK shares pledged by SV.
10 II

t.

On or about July 13, 2011, JEFFREY R. SPANIER spoke by

II II telephone with borrower RS where they discussed ARGYLL's return of RS's


1211750,000 shares pledged as collateral for a loan.
13 II

u.

On or about July 18,

2011,

JEFFREY R.

SPANIER emailed

14 II borrower RS concerning RS's return of his stock from ARGYLL.


15 II

v.

On or before August 3, 2011, JEFFREY R. SPANIER spoke by

16 II telephone with borrower RS whereby he informed RS that he had a meeting


17 II with ARGYLL in San Diego, California.
18 II
19 II charged

w.

On

elsewhere,

or

before

spoke

by

August

3,

telephone

2011,
with

Douglas
borrower

McClain,
RS

Jr.,

whereby

he

20 II reassured RS that ARGYLL would honor all loans, was working through all
21 II issues with the government investigation,

and would be able to return

22 IIRS's 750,000 shares within two weeks.


23 II

x.

On or about August 7, 2011, JEFFREY R. SPANIER and Douglas

24 II McClain, Jr., charged elsewhere, caused borrower RS to initiate a wire


25 II transfer in the amount of $3,839.06 to ARGYLL for an interest payment
26 lion an existing stock loan transaction.

27 11/ /

28 II / /

Case 3:16-cr-01545-BEN Document 54-3 Filed 11/01/16 Page 9 of 12

y.

2 /I elsewhere,

On or about August 8, 2011, Douglas McClain, Jr., charged

emailed borrower RS and agreed to delay future

interest

3 II payments with ARGYLL.


411AII in violation of Title 18, United States Code, Section 371.
5

Count 2

[15 U.S.C. 78j (b) and 78ff]

Securities Fraud

8 II

19.

The allegations set forth in paragraphs 1 through 7, and 11

9 II through 12 above are realleged and incorporated by reference as if fully


10

set forth herein.

11

20.

Beginning in or around February 2003, and continuing up to at

12 I/least March 14,

2012,

within the Southern District of California and

13 II elsewhere, defendant JEFFREY R. SPANIER, did knowingly and willfully,


14 II directly and indirectly, by the use of the means and instrumentalities
15 /I of

interstate

commerce,

the

mails,

and

the

facilities

of

national

16 II securities exchanges, use and employ manipulative and deceptive devices


17/1and

contrivances

18 II securities

in

connection

in violation

of

with

Title

17,

the
Code

purchase
of

and

Federal

sale

of

Regulations,

19 II Section 240.10b-5, by (a) employing devices, schemes, and artifices to


20l/defraudi

(b) making

untrue statements of material fact and omitting to

21 II state facts necessary in order to make the statements made, in light of


22 II the

circumstances

under which

they

were

made,

not

misleading i

and

23 II (c) engaging in acts, practices, and courses of business which operated


24 II and would operate as a fraud and deceit upon purchasers of securities.
25

All in violation of Title 15 1 United States Code,

26

78f,

27

Title 18, United States Code, Section 2.

28

//

Title 17,

Code of Federal Regulations,

Sections 78j (b)

and

Section 240.10b-5,

and

Case 3:16-cr-01545-BEN Document 54-3 Filed 11/01/16 Page 10 of 12

Criminal Forfeiture Allegations

[18 U.S.C.

3 "

21.

4 /I reference

Counts
as

981(a) (1) (C), 984, and 28 U.S.C.

and

though

set

are

realleged

forth

in full

and
for

2461(c)]

incorporated
the

purpose

herein

of

by

charging

5 /I criminal forfeiture pursuant to the provisions of Title 18, United States


6 II Code,

Sections

981(a)(1)(C),

984,

and Title 28,

United States Code,

7 II Section 2461(c).
8 II

22.

As a result of the commission of the foregoing offenses alleged

911in Counts 1 and 2 of this Indictment, defendant JEFFREY R. SPANIER shall


10 II forfeit to the United States any and all property,
11 II which

constitutes

or

is

derived

from

proceeds

real and personal,


traceable

to

1211offenses, including but not limited to:


13
Real Property
14
a.

15

The

real

property

located

at

located

at

16013

16

D'Alene Drive, Delray Beach, Florida 33446, and all

17

appurtenances affixed thereto. The real property is

18

more particularly described as:


PROPERTY ID. NO.: 00-42-46 20-16-000-0020

19
20

Lot 2, DELRAY TRAINING CENTER P.U.D.

21

B,

22

recorded in Plat Book 86,

23

Public Records of Palm Beach County, Florida.

according to the map or plat thereof,

24

2511//

26

/ /

27

/ /

PARCEL

28 11/ /

10

Page 157,

as

of the

those

Case 3:16-cr-01545-BEN Document 54-3 Filed 11/01/16 Page 11 of 12

Financial Accounts at Wachovia Bank

b.

All monies,

funds and credits in Wachovia Bank Account

xxxxxxxx6242, in the name of Amerifund Capital Finance,


4

LLC.
5

c.

All monies,

funds and credits in Wachovia Bank Account

xxxxxxxxx7113, in the name of Jeffrey Spanier.


7

d.

All monies,

funds and credits in Wachovia Bank Account

xxxxxxxxx6481, in the name of Regina Spanier.


9

10

Financial Accounts at Iberia Bank

11

e.

12

All monies,

funds and credits in IberiaBsank

13

Sterling

14

Amerifund Capital Finance, LLC.


All monies,

f.

15

Bank)

Account

xxxxxx0663,

Sterling

17

Amerifund Capital Finance LLC.


23.

In

19 II constitutes

the
or

is

event

Bank)

that

derived

the

funds and credits in IberiaBank

16

18 II

in

Account

xxxxxx2968,

any property,

from

proceeds

real

in

or

traceable

the

(formerly
name

(formerly
name

personal,
to

the

of

of

which

offenses

20 II described in Counts 1 and 2 of this Indictment, as a result of any act


21 Ilor omission of the defendants:
22

(I)

cannot be located upon the exercise of due diligence;

23

(2)

has been transferred or sold to, or deposited with, third

25

(3)

has been placed beyond the jurisdiction of the courts;

26

(4)

has been substantially diminished in value; or

24

parties;

271111
28

II11
11

Case 3:16-cr-01545-BEN Document 54-3 Filed 11/01/16 Page 12 of 12

(5)

has been co-mingled with other property which cannot be

2 II divided without difficulty; any other property of the defendant, up to

3 lithe value of $81,000[000 shall be forfeited to the United States pursuant

4 lito Title 28, United States Code [ Section 2461(c}.

5 IIAll in violation of Title 18, United States Code, Sections 981(a) (1) (C) [

611984, and Title 28/ United States Code, Section 2461(c).

7 II

DATED:

October 28, 2016.

A TRUE BILL:

~~

10

11 II

12 ..
13_
II

14

Foreperson
LAURA E. DUFFY

united States Attorney

By:

ORABONA
U.S. Attorney

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20

21

22

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2S

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27

28

12

Case 3:16-cr-01545-BEN Document 54-4 Filed 11/01/16 Page 1 of 1

CERTIFICATE OF SERVICE

1
2
3

I hereby certify that I am over the age of eighteen and am not a party to this

action. On todays date, I filed a true and correct copy of the attached document

through this Courts Electronic Filing System (ECF), and the system indicated that

the filing had been received successfully. By virtue of the ECF system, the AUSA

assigned to this case and all interested parties were served electronically upon

filing of this document.

9
10

I declare under penalty of perjury that the foregoing is true and correct,
dated: November 1, 2016.

11
12

s/ Timothy A. Scott

13

TIMOTHY A. SCOTT

14

Attorney at Law

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