Frequently Asked Questions
- What is the status of the case?
- Did the Receiver or the SEC reach a settlement with David Tanner?
- How do I file a claim?
- What happens if I do not submit proof of my investment, i.e. copies of the Joint Venture Agreement, last Monthly Financial Report, canceled checks, wire transfers, electronic currency receipts, and cash receipts as requested with the claim form?
- Who is eligible for a payment?
- How much money will I receive on my claim?
- How long will this process take?
- Who is paying the expenses of the CEC Receivership?
- Should I hire a lawyer?
- If I invested on behalf of someone else, what should I do?
- If I pooled funds from several people, either informally, or through a corporation, partnership, or other venture, what should I do?
- Is it true that the claim form only allows 10% of investors to file a claim?
- Is there an agreement or court order that investors are not to be harmed?
- When will investors receive a distribution on their investment?
- What if I have questions, or need additional information?
1. What is the status of the case?
Since his appointment, the Receiver has investigated the assets, liabilities and business operations of the defendants and relief defendants. The Receiver has recovered approximately $5,138,651.07 in investor funds. The Receiver has also identified and obtained orders directing, and/or agreements for, the return of an additional $8.1 million of investor funds. The Receiver has pending motions for turnover of approximately $1.3 million in investor funds transferred to foreign banks.
The Receiver has also obtained an Order of Turnover for two properties in Nevada purchased with investor funds and titled in the name of Worldplaza, a Panamanian corporation. Worldplaza has appealed the Order of Turnover and requested a stay of sale of the properties pending appeal. The U.S. District Court for the District of Nevada recently denied Worldplaza’s efforts to prevent the Receiver from liquidating the properties. The Receiver now intends to liquidate these properties and deposit the proceeds into the Receiver’s account for the benefit of the investors. The properties were purchased with approximately $286,000 of investor funds and the Receiver believes the liquidation of these properties will bring at least that amount.
The Receiver has devoted considerable time to the collection of outstanding turnover orders including $4.99 million still due to the Receiver from Seaforth Meridian, Ltd. In addition, the Receiver, in cooperation with the Commission, the Commission’s Office of International Affairs, and other governmental authorities, is working to repatriate approximately $4.4 million in funds frozen in foreign bank accounts and obtain foreign bank account records to further trace investor funds.
The Receiver has also devoted considerable time investigating and assessing recovery of approximately $5,085,000 in investor funds received by Server to Go, Inc.
The SEC has reached settlement agreements with all defendants and relief defendants except Vectra Resources and David Tanner. After being ordered to appear in the United States to sit for a deposition and being further ordered to execute a Consent Directive, David Tanner agreed to an Order of Permanent Injunction and Disgorgement of $15 million. Unfortunately, David Tanner has failed to turnover any CEC funds to the Receiver. He has also refused to provide the Receiver with any information on the identity of the investors, contact information for the investors, the amounts the investors originally invested in CEC, or an accounting of the amount each investor is owed. Accordingly, the Receiver does not yet know the total amount invested in CEC.
The Receiver recently obtained a list of the SafeMail.net e-mail addresses for approximately 10,000 CEC investors. He has sent an email message to each of the addresses on the list to notify investors of the receivership web site and the procedure for filing a claim.
On March 26, 2006 U.S. District Court Judge Sam A. Crow entered an order:
(i) Establishing April 28, 2006 as the Claims Bar Date by which investors must file a claim via the Receiver's website;
(ii) Approving the Receiver's request to provide notice of the Claims Bar Date via this e-mail and by posting the Order on the Receiver's website; and
(iii) Approving the Claim Form located on the Receiver's website.
NOTE: YOUR CLAIM FORM AND SUPPORTING DOCUMENTS MUST BE POSTMARKED ON OR BEFORE THE CLAIMS BAR DATE OF APRIL 28, 2006.
The Receiver is aware of a significant amount of misinformation being circulated by David Tanner and others. Concerned investors are invited to review the court pleadings (a link to the court pleadings is provided in this website under “Court Documents”) and decide for themselves how they wish to proceed. The Receiver will contact all known investors to request that they file a claim with the Receiver via this website. Those investors who elect not to file a proof of claim will not receive a distribution on their claim. Investors who wish to receive a distribution are encouraged to file a claim.
The Receiver is still in the process of collecting the assets that the Court ordered be paid to the Receiver, and will pay certain expenses upon approval of the Court. Additional expenses will be incurred. Net assets remaining after payment of all expenses will be distributed to investors.
For the latest status information, please read the Receiver's Status Reports to the Court in the COURT FILINGS Section.
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2. Did the Receiver or the SEC reach a settlement with David Tanner?
No. There was no settlement with Mr. Tanner. Mr. Tanner agreed to accept a judgment against him in the amount of $15 million and an Order of Disgorgement directing him to pay this amount to the Receiver. Mr. Tanner will receive a credit for amounts the Receiver recovers from certain accounts. The $15 million amount represents the SEC and the Receiver’s best estimate of the total amount of defrauded investor funds. The judgment against Mr. Tanner provides that the Receiver may ask the Court to increase this amount if the Receiver discovers the investors lost more than $15 million in the Capital Enhancement Club scheme.
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3. How do I file a claim?
Select the “Register Claim” tab on the ceclubreceiver.com home page.
Complete all questions on the complaint form.
Select the “Submit” button.
Print the Claim Form you completed.
Complete the Claim Form Verification and sign before a notary.
Attach copies of all relevant documents: Joint Venture Agreement, Last Monthly Financial Report, Investment Receipts (i.e. canceled checks, money orders, wire transfers, electronic currency receipt, etc.)
Mail notarized copy of Claim Form and Verification, and relevant documents to:
Capital Enhancement Club Receiver
14904 W. 87th St. Parkway, #333
Lenexa, Kansas 66215
YOUR CLAIM FORM AND SUPPORTING DOCUMENTS MUST BE POSTMARKED ON OR BEFORE THE CLAIMS BAR DATE OF APRIL 28, 2006.
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4. What happens if I do not submit proof of my investment, i.e. copies of the Joint Venture Agreement, last Monthly Financial Report, canceled checks, wire transfers, electronic currency receipts, and cash receipts as requested with the claim form?
The Receiver will propose to the Court that all claims will need to be documented to prevent fraudulent claims against the receivership estate. Any claim not supported by proper documentation will be rejected. Proper documentation of a claim should include all documents and communications which demonstrate a withdrawal of funds from an investor’s bank or other private investment account, the deposit of those funds with CEC (including proof of wire transfers or electronic account deposits), and any payments received from CEC (including returns, “sponsor income,” and referral fees). The Receiver will consider and you should provide any Monthly Financial Reports (MFR’s) that you received from CEC. Contrary to the apparent assertions of Mr. Tanner, CEC has not provided to the Receiver or the SEC copies of MFR’s for each investor.
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5. Who is eligible for a payment?
The Court will make the ultimate decision regarding who will qualify for a payment. The Receiver will propose to divide net assets available, after expenses, to court-approved investors in Capital Enhancement Club, pro-rata based on the amount of that investment less any payments received.
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6. How much money will I receive on my claim?
The amount of money available to pay claims depends on several factors, including (1) number and amount of verifiable claims, (2) the total funds recovered by the Receiver for the claim fund, and (3) the expenses paid by the Receiver to operate the receivership. The Receiver is unable to estimate these amounts at this time.
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7. How long will this process take?
The Receiver has to operate without the cooperation of David Tanner and the other parties involved in operating and accepting funds for Capital Enhancement Club. This will make it difficult and expensive to search for, locate, and recover the victim’s funds. To make this process even more difficult, most of the money paid in by victims was sent to banks and electronic currency providers outside the legal jurisdiction of the United States.
The Receiver will not be in a position to present to the court a plan for claims distribution until all efforts to recover victim’s funds are completed. While it is impossible to give an accurate estimate, it is not unusual for this process to take a year or longer.
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8. Who is paying the expenses of the CEC Receivership?
Receivership expenses are borne by the Receivership Estate. The Receiver makes every effort to limit the expenses and conserve the Receivership’s assets for distribution back to the victims.
If the defendants in this action were to provide the accounting ordered by the Court, it would drastically reduce the time and expense required to gather this information.
Anything that you can do to limit the extent of the efforts required to administer the estate is therefore very much appreciated.
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9. Should I hire a lawyer?
Neither the Receiver nor his attorneys may represent your interest. You may seek the assistance of a personal attorney, although this is not necessary or required.
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10. If I invested on behalf of someone else, what should I do?
If you invested on behalf of just one other individual, then you should assist that individual in making a claim and provide supporting documentation of your investment in CEC (front and back copy of a check, bank wire confirmation report, etc) to them if necessary. The investor, in turn, should include with their claim their proof of payment to you, as well as your proof of payment to CEC.
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11. If I pooled funds from several people, either informally, or through a corporation, partnership, or other venture, what should I do?
You should provide to the Receiver's office, a full accounting for all of your group's transactions with CEC that shows the net cash loss/gain of each investor, supported by bank statements for all accounts that handled investor funds. You should eliminate from your accounting "paper profits" or reinvested returns. Your accounting should identify any sales commissions or other expenses you may have deducted as a fee for acting on behalf of your investors and any “sponsor income” you received directly from CEC.
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12. Is it true that the claim form only allows 10% of investors to file a claim?
No. The Receiver encourages all investors to provide proof of their investment. Proof of payment is required for all types of investment and payment (e.g., e-currency, money order, cashier check, etc.). Investments and payments can also be supported by bank statements, MFR, and JVA forms that reflect the amount of the payment. Even those investors who invested via e-currency may support their claim by providing proof of the e-currency withdrawal or deposit and communications with CEC or a CEC “up-line”contact.
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13. Is there an agreement or court order that investors are not to be harmed?
No. Although the Receiver does not intend to “harm” investors, his duties require him to pursue “offsets,” or deductions from investments of the amount investors received from CEC. In addition, the Receiver will pursue recovery of funds from investors who received more than their initial investment. The Receiver’s goal is that all defrauded investors be treated equally. The Receiver does not believe it would be fair to allow some investors to profit from the CEC scheme at the expense of investors who received nothing from CEC. For example, the Receiver is aware of one person who stated he did not invest any money in CEC, but received over $2 million on payments. In addition, one of the relief defendants reported an investment of $30,000, but withdrawals of over $1 million.
Furthermore, there is no agreement that CEC members “will not be prosecuted for failure to report offshore income.” Although the Receiver’s duties do not include prosecuting tax fraud claims, the SEC routinely makes referrals and cooperates with other law enforcement agencies.
The SEC has informed the Receiver it may consider an immediate civil action or criminal referral for anyone filing a false or misleading claim.
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14. When will investors receive a distribution on their investment?
There is no agreement or court order regarding the timing of distributions to investors. Once the Court is satisfied the Receiver has undertaken all reasonable steps to alert investors of their opportunity to file a claim, the Receiver will ask the Court to approve a notice process and set a “Claims Bar Date” or deadline by which investors must file their claim to be eligible to participate in a distribution.
The Receiver will use his best efforts to notify investors of the Claims Bar Date. After the Claims Bar Date expires, the Receiver will review the claims submitted, recommend to the Court which claims should be allowed, and request authority to make a distribution on the allowed claims. Distribution of recovered funds will commence shortly after the Court approves the claims and the distribution.
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15. What if I have questions, or need additional information?
You may send your questions and requests by email to the Receiver at info@ceclubreceiver.com or send a letter to the address above.
This web site has been developed to provide CEC victims with information on the progress of the receivership. Due to time and expense limitations, the Receiver will not respond to emails requesting progress updates so please visit the receivership web site for that information.
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