Creates a legal pleading - EIMT Receivership

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FUTTERMAN DUPREE DODD CROLEY MAIER LLP
JAMIE L. DUPREE (158105)
JAIME G. TOUCHSTONE (233187)
180 Sansome Street, 17 th Floor
San Francisco, CA 94104
Telephone: (415) 399-3840
Facsimile: (415) 399-3838
jdupree@fddcm.com
jtouchstone@fddcm.com
Attorneys for Receiver
Stephen E. Anderson
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF CALIFORNIA
SACRAMENTO
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SECURITIES AND EXCHANGE
COMMISSION,
v.
Plaintiff
ANTHONY VASSALLO, et al,
Defendants.
Case No. CV 09-000665 LKK-DAD
MEMORANDUM IN SUPPORT OF
RECEIVER’S SIXTH APPLICATION
FOR FEES AND COSTS
Local Rule 66-232(g)
Date: December 17, 2012
Time: 10:00 a.m.
Courtroom: 4, 15 th Floor
Judge: Hon. Lawrence K. Karlton
FUTTERMAN DUPREE
DODD CROLEY
MAIER LLP
MEMORANDUM IN SUPPORT OF RECEIVER’S SIXTH APPLICATION FOR FEES AND COSTS
CASE NO. CV 09-000665 LKK-DAD

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TABLE OF CONTENTS
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INTRODUCTION............................................................................................................................1
APPLICATION ................................................................................................................................2
Page
A. Previous Fee Applications .......................................................................................3
B. Fees Incurred for Sixth Fee Application ..................................................................4
1. Case Management, Communication with SEC and Law
Enforcement .................................................................................................5
2. EIMT Financial Analysis/Vassallo ..............................................................5
3. Investor Communications ............................................................................6
4. Clawback: General (Investors/Fund Managers/Others)/Equity
Constellation ................................................................................................6
5. Property: Fiddletown/Island Park ...............................................................7
6. Investments (Active Investigations and/or Monitoring): J.R. Trust
(Global Mergers and Schotts)/Rohan Grant/Wunderli/Wiseman
and Joiner .....................................................................................................8
7. Investments (Closed Investigations and/or Monitoring):
Ferentz/CMO/Vestium & Arcanum/Buckhannon Dewayne
Smith/Changing the Planet/Phlorian Racing & Sir Joseph
Birch/Richard Sacks/ Martin Porter/Vastmann (VIP)/NCT Trading
(Westlake, Ban Europa) ...............................................................................9
8. General .......................................................................................................10
C. Fees and Costs Requested ......................................................................................10
CONCLUSION ..............................................................................................................................15
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FUTTERMAN DUPREE
DODD CROLEY
MAIER LLP
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MEMORANDUM IN SUPPORT OF RECEIVER’S FIFTH APPLICATION FOR FEES AND COSTS
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TABLE OF AUTHORITIES
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Cases
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Statutes and Rules
Local Rule 66-232(g) ...................................................................................................................... 1
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FUTTERMAN DUPREE
DODD CROLEY
MAIER LLP
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MEMORANDUM IN SUPPORT OF RECEIVER’S FIFTH APPLICATION FOR FEES AND COSTS
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DODD CROLEY
MAIER LLP
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INTRODUCTION
Receiver Stephen E. Anderson (“Receiver”) was appointed Receiver over Defendant
Equity Investment Management and Trading, Inc. (“EIMT”) in orders filed on April 30, 2009 and
July 31, 2009. Receiver now brings his sixth application for fees and costs for the period of
October 1, 2011 through August 31, 2012 (eleven months).
Receiver’s fifth application for fees was approved in an order dated December 19, 2011.
(Doc. No. 456). Receiver submits this sixth application for fees and costs pursuant to Local Rule
66-232(g), from October 1, 2011 through August 31, 2012, for services performed by 1)
Receiver, 2) Receiver’s consultant Cindi Sherrod, 3) Receiver’s accountant Stephan A. Werth,
and 4) attorneys for Receiver. For the reasons set forth below, Receiver requests the Court’s
approval of his sixth fee application in the total amount of $300,414.25 for the following
incurred fees and costs:
Name Fees Costs Total Payment
Receiver Stephen E.
Anderson
$117,202.50 $670.62 $117,873.12
Stephan A. Werth,
C.P.A.
$15,785.00 _ $15,785.00
Cindi Sherrod $56,142.50 $2,680.74 $58,823.24
Demco Law Firm,
P.S.
The Law Offices of
Miriam Hiser
Futterman Dupree
Dodd Croley
Maier LLP
$200.00 _ $200.00
$32,900.00 $1,614.79 $34,514.79
$70,059.50 $3,158.60 $73,218.10 1
TOTALS $292,289.50 $8,124.75 $300,414.25
1 In calculating the fees and costs incurred by Futterman Dupree, Receiver realized that a $73.00 overpayment was
made to Futterman Dupree in January 2012 in connection with Receiver’s Fifth Application for Fees and Costs.
Accordingly, while Futterman Dupree’s August 2012 invoice reflects fees and costs incurred in the amount of
$73,291.10, Futterman Dupree is only requesting $73,218.10 as part of this fee application to take into account the
$73.00 overpayment. This deduction has been subtracted from the fee allocation. Dupree Declaration, 3.
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APPLICATION
During the period covered by this fee application, October 1, 2011 through August 31,
2012, Receiver finalized his investigation and analysis into the finances of EIMT and its funds in
order to pursue clawback and devise a distribution plan. Receiver also continued to investigate
and marshal EIMT assets, engage in extensive investor, fund and creditor communications, and
work on receivership issues with his consultant, accountant, legal counsel and various
government entities. Declaration of Stephen E. Anderson (“Anderson Declaration”), filed
herewith, 2. During this period, Receiver has recovered $997,636.32 on behalf of the
Receivership estate and has initiated the clawback process, through which he expects to recover
additional funds. Anderson Declaration, 3. Receiver’s activities during this period are detailed
at length in his Seventh Interim Report, being filed simultaneously with this fee application.
During this period, Receiver has completed his thorough and exhaustive review of the
books and records for EIMT and now understands the financial relationship of EIMT’s 21 funds
to EIMT and the financial relationship of each fund investor to EIMT. This review and
understanding allowed him to determine the total amount of investor money received from and
returned to each EIMT fund. Anderson Declaration, 2. This amount forms the basis for the
equitable clawback process and the ultimate distribution plan. Accordingly, during this period,
Receiver determined each individual investor and fund manager’s clawback obligation and has
issued written clawback notices to the majority of those investors and fund managers. Id.
This fee application covers an eleventh month period, a longer time than Receiver would
like, but which was logical because it constituted the period in which he completed his review of
EIMT’s books and records such that he could initiate the clawback process and devise the
distribution plan. Anderson Declaration, 4. In addition to his accounting review, Receiver
spent time wrapping up his investigation into certain “exotic” investments, which included
monitoring of, and filing proofs of claim in the bankruptcy actions of fraudsters who orchestrated
certain exotic investments. Id., 4. The purpose of this work was to determine if these
individuals possess assets from which he could pursue collection and secure EIMT’s claim to any
of those available assets. Id., 4.
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Receiver billed his services at $225 an hour, $175 an hour for accountant Stephan A.
Werth, and $50 an hour for consultant Cindi Sherrod. Anderson Declaration, 5, 6. These are
competitive rates when compared with similar service providers and all have been previously
approved by the Court. Id. Receiver’s legal services for the time period covered by this fee
application have been performed by his Bay Area counsel, Futterman Dupree Dodd Croley Maier
LLP (“Futterman Dupree”), his Washington counsel Demco Law Firm, P.S. (“Demco”) and his
bankruptcy counsel the Law Offices of Miriam Hiser (“Miriam Hiser”). See generally
Declaration of Jamie Dupree (“Dupree Declaration”), filed herewith. Futterman Dupree billed its
services at the same rates previously approved by the Court in connection with Receiver’s first
fee application. Id., 2. Demco billed its services at the rate previously approved by this Court
in connection with the Receiver’s fourth fee application. Id., 4. Miriam Hiser billed her
services at the rates previously approved by the Court in connection with its September 29, 2011
Order. (Doc. No. 429). Futterman Dupree, Demco, and Miriam Hiser’s rates are competitive
and reflect significant value for the EIMT investors. See generally Dupree Declaration.
Receiver prepared a spreadsheet analyzing the fees billed for this period by activity,
which breaks down fees (excluding travel time and costs) by billing category by billing
professional (Receiver, Receiver’s consultants, Receiver’s accountant, and Receiver’s counsel).
Anderson Declaration, 7, Exhibit B.
The total amount of fees and costs incurred through August 2012 on the receivership is
$1,463,928.38. (Doc. Nos. 201, 345, 394, 412, 456). As set forth in the Standardized Fund
Accounting Reports compiled by Receiver’s accountant, Receiver has recovered $3,130,501.97
for the receivership, leaving a net asset balance of $1,666,573.59. Anderson Declaration, Exhibit
G.
A. Previous Fee Applications
The Court approved Receiver’s first fee application in the amount of $202,939.48 in an
order dated December 8, 2009 for services rendered from the inception of the receivership
(April 30, 2009) through September 30, 2009 (five months). (Doc. No. 201). The Court
approved Receiver’s second fee application in the amount of $381,126.88 in an order dated
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September 27, 2010 for the period of October 1, 2009 through May 31, 2010 (eight months).
(Doc. No. 345). The Court approved Receiver’s third fee application in the amount of
$160,318.96 in an order dated December 13, 2010 for the period of June 1, 2010 through
September 30, 2010 (four months). (Doc. No. 394). The Court approved Receiver’s fourth fee
application in the amount of $143,235.01 in an order dated May 9, 2011 for the period of
October 1, 2010 through January 31, 2011 (four months). (Doc. No. 412). The Court approved
Receiver’s fifth fee application in the amount of $275,893.80 in an order dated December 19,
2011 for the period of February 1, 2011 through September 30, 2011 (eight months). (Doc. No.
456).
B. Fees Incurred for Sixth Fee Application
This fee application covers an eleventh month period, from October 1, 2011 through
August 31, 2012. Receiver, Receiver’s consultant, Receiver’s accountant and Receiver’s
counsel’s activities, are described in some detail in their work records, time records and invoices,
all of which are attached either as exhibits to the Anderson Declaration or the Dupree
Declaration, filed herewith. Receiver’s recent activities are also discussed in full in his Seventh
Interim Report, filed simultaneously with this application.
Receiver billed his services at $225 an hour, $175 an hour for accountant Stephan A.
Werth, and $50 an hour for consultant Cindi Sherrod. Anderson Declaration, 6, 7. These are
competitive rates when compared with similar service providers and have been previously
approved by the Court. Id. Receiver’s legal services for the time period covered by this fee
application have been performed by his Bay Area counsel, Futterman Dupree Dodd Croley Maier
LLP (“Futterman Dupree”), his Washington counsel Demco Law Firm, P.S. (“Demco”) and his
bankruptcy counsel the Law Offices of Miriam Hiser (“Miriam Hiser”). Anderson Declaration,
20; see generally Dupree Declaration. Futterman Dupree billed its services at the same rates
previously approved by the Court in connection with Receiver’s first fee application. Id. Demco
billed its services at the rate previously approved by this Court in connection with the Receiver’s
fourth fee application. Id. Miriam Hiser billed her services at the rates previously approved by
the Court in connection with its September 29, 2011 Order. (Doc. No. 429). Futterman Dupree,
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Demco, and Miriam Hiser’s rates are competitive and reflect significant value for the EIMT
investors. See generally, Anderson Declaration and Dupree Declaration.
In this sixth fee application, Receiver seeks $292,289.50 in fees and $8,124.75 in costs,
for the total of $300,414.25. Anderson Declaration, 27. Receiver’s activities from October 1,
2011 through August 31, 2012, are described in some detail in his work records, the invoices of
his consultant, Cindi Sherrod and the invoice of his accountant Stephan A. Werth, all of which
are attached as exhibits to the Anderson Declaration, filed herewith, in his reports filed with the
court, in applications, motions and orders filed in this action during this period, and in the time
records of his counsel, which are attached as exhibits to the Dupree Declaration.
Receiver breaks out and describes the fees (excluding travel time and costs) incurred by
category in more detail below as requested by the SEC.
1. Case Management, Communication with SEC and Law Enforcement
During this period, fees of $44,756.00 have been incurred for case management and
communication with the SEC and law enforcement agencies. Services have generally consisted
of communicating via telephone, e-mail and in person with various law enforcement agencies to
review and share information relevant to the receivership. Receiver and his consultant engaged
in extensive communications with the SEC, the Federal Bureau of Investigation, Internal
Revenue Service and the United States Attorneys’ Office concerning EIMT and its investments
and have reviewed substantial documentation from those entities. Services in this category
include meetings with the SEC, preparing an interim report and court appearances related to case
management, but, in compliance with the SEC’s Billing Instructions, no fees have been charged
for the preparation of any fee applications even though the time spent in preparation of those
applications is substantial. Anderson Declaration, 8 and Exhibit B; Dupree Declaration, 2
and Exhibit H.
2. EIMT Financial Analysis/Vassallo/Fund Managers/Distribution Plan
During this period, fees of $6,985.00 have been incurred for EIMT financial analysis,
$148.00 related to the investigation into Anthony Vassallo, $5,180.00 related to the investigation
into the fund managers and $11,620.00 to analyze and devise a distribution plan. For EIMT
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financial analysis, services generally consisted of reviewing EIMT and Vassallo Group financial
records and reconciling the books to determine how much money went in and out of EIMT.
Receiver continued to work with his accountant and consultant, to review and analyze available
EIMT accounting/financial records, QuickBooks computer files and e-mails in order to analyze
EIMT’s past and current company balance sheet and to assess EIMT’s financial situation and
compile an “investment” timeline. Receiver has utilized this financial analysis to assist in his
clawback investigations and initiate the clawback process and to devise a distribution plan.
Anderson Declaration, 9 and Exhibit B; Dupree Declaration, Exhibit H.
3. Investor Communications
During this period, fees of $4,805.00 have been incurred for investor communications.
Services generally consisted of communicating via telephone, e-mail, in person and via the
eimt.receivership.com website to collect information on various topics related to the receivership.
Receiver maintains a database with investor information for communications with investors from
various sources and has engaged in countless investor communications concerning his
investigation and status of the receivership. Receiver has also responded to specific investor
concerns filed with and addressed by the Court. Receiver maintains the EIMT receivership
website for posting of up-to-date status and case information for all investors. The total amount
of recovery to be distributed to investors is unknown at this time. Anderson Declaration, 10
and Exhibit B; Dupree Declaration, Exhibit H.
4. Clawback: General
Clawback is the recovery of “phony” profit paid from investor proceeds. During this
period, fees of $68,103.00 have been incurred for general clawback work. In some
circumstances, services related to clawback have been characterized as financial analysis since
financial analysis is relevant to clawback and other receivership purposes. When categorized as
“clawback,” services generally consisted of recreating EIMT accounting and completing the
financial analysis necessary to determine amounts eligible for clawback from EIMT investors and
fund managers, drafting and sending written clawback notices to those investors and managers
and corresponding with those investors and managers – directly or via legal counsel – who
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responded to the written clawback notices. Additionally, general clawback work involves
investigation and pursuit of third parties that do not qualify as investors or fund managers, but
have received EIMT funds to which they are not entitled. Receiver pursued third parties Elevate
Communications and Wright Thurston for receiving $100,000.00 of EIMT investor money and
received a disgorgement order against Elevate Communications. Receiver is also pursuing the
Church of Latter Day Saints. The estimated amount of recovery from EIMT investors and others
is unknown at this time. The estimated amount of recovery from the fund managers could
possibly be as much as $3.6 million. Nearly five hundred thousand dollars has already been
recovered from Equity Constellation investors and its fund manager. Anderson Declaration, 11
and Exhibit B; Dupree Declaration, 2 and Exhibit H.
5. Property: Fiddletown/Island Park
During this period, fees of $472.50 have been incurred for the Fiddletown property and
$13,806.50 for the Island Park property. Anderson Declaration, 12 and Exhibit B; Dupree
Declaration, Exhibit H.
With respect to Island Park, Receiver conducted a four day open house for the Island Park
property as well as a public auction, held at the property on October 22, 2011, which was
approved in advance by the Court. Anderson Declaration, 12 and Exhibit B; Dupree
Declaration, Exhibit H. Unfortunately, despite Receiver’s best efforts to market the Island Park
Property, the high bid obtained on October 22, 2011, and the close on November 14, 2011, did
not generate much by the way of proceeds for the defrauded investors. The receivership estate
will net $1,500 from the sale, which will not cover the carrying costs of the property over the last
year and a half. Receiver nevertheless presented the high bid to the court for a confirmation
hearing on November 7, 2011, because he did not believe hanging onto the property for another
year would be prudent given the ongoing costs of doing so and no assurance that another year
would result in a substantial increase in the amount offered for the property since there is no
indication that property values are rising. Receiver believes that the marketing process was
sound, but the Island Park property is simply not worth anywhere near what EIMT investors paid
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for it in January 2008 given the ongoing foreclosures in the area and the ongoing weakness in the
real estate market. Anderson Declaration, 12 and Exhibit B; Dupree Declaration, Exhibit H.
With respect to Fiddletown, services generally consisted of upkeep, maintenance and
marketing of the property. Receiver maintained the upkeep of and insurance on the property.
Receiver has also been monitoring the real estate market in Amador County, California, where
the Fiddletown Property is located. This monitoring has included communication with real estate
brokers, property managers and interested buyers. The estimated amount of recovery from the
Fiddletown property is $150,000-$175,000. In spite of continued marketing efforts, the
Fiddletown property has not generated much interest and remains on the market for sale.
Anderson Declaration, 12 and Exhibit B; Dupree Declaration, Exhibit H.
6. Investments (Finalizing Investigations and/or Monitoring): J.R. Trust
(Global Mergers and Schotts)/Rohan Grant/Wunderli/Wiseman and Joiner/
Vastmann (VIP)
As set forth above, a portion of Receiver’s work has been finalizing his investigations and
attempting to recover substantial funds transferred by EIMT related to purported “exotic”
investments, all of which appear to be fraudulent. Work has also been performed to monitor the
bankruptcy actions of Schotts and Wunderli to gain information that will assist Receiver in
collecting funds from third parties involved with these exotic investments. During this period,
fees of $15,523.00 have been incurred for the J.R. Trust (Global Mergers and Schotts)
investment, $1,695.50 for the Rohan Grant investment, $40,156.50 for the Kyle Wunderli
investment and $14,214.00 for the Wiseman and Joiner investment and $34,884.00 for the
Vastmann (VIP) investment. Services generally consisted of obtaining and reviewing financial
records to trace EIMT funds, disgorge assets and cash from third parties and determine the
likelihood of recovery for the remaining funds. Receiver’s counsel corresponded with opposing
counsel and explored/pursued interested parties in the bankruptcy courts. With respect to the
Rohan Grant investment, Receiver has been monitoring the matter and corresponding with the
FBI’s forfeiture unit. Notably during this period, Receiver collected $981,699.32 from the FBI’s
forfeiture unit on behalf of the EIMT investors. With respect to the J.R. Trust investment, in
August 2011, Receiver obtained a disgorgement order requiring J.R. Trust and its trustee Richard
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Schotts to disgorge $2.5 million. Schotts filed for bankruptcy protection. Receiver believes
there may be assets to recover and is pursuing Schotts in the bankruptcy court. The amount of
any recovery is unknown at this time. With respect to the Kyle Wunderli investment, Receiver
corresponded with Mr. Wunderli and requested documents and an accounting but Mr. Wunderli
failed to provide the requested information and filed for bankruptcy protection. Mr. Wunderli
has asserted that he transmitted funds received from EIMT to his investors, but refused to
identify those investors or providing an accounting. During this period, Receiver successfully
pursued the majority of the necessary information through the bankruptcy proceeding and will
shortly initiate the clawback process against Wunderli’s investors who received EIMT investor
money. The estimated amount of recovery on this investment is currently unknown. With
respect to the Wiseman and Joiner investment, Receiver compiled documents and information
through his investigation and is in the process of attempting to clawback up to $2.8 million in
EIMT investor funds. The estimated amount of recovery from Wiseman and Joiner is currently
unknown. With respect to the VIP/SIG investments, Receiver, his accountant and his consultants
have done financial and investigatory research during this fee period and have been able to –
notwithstanding their previous concerns about the complexity of VIP/SIG – formulate and
initiate an equitable method for clawback of EIMT funds from VIP/SIG investors who
unknowingly invested in and/or received money from EIMT. Receiver hopes to recover funds
through the VIP/SIG clawback process. Given the fraudulent nature of the transactions, Receiver
will continue to minimize expenses while he determines if there are assets to recover through the
bankruptcy proceedings and/or clawback process. Anderson Declaration, 13 and Exhibit B;
Dupree Declaration, Exhibit H.
7. Investments (Closed Investigations and/or Monitoring):
Ferentz/CMO/Vestium & Arcanum/Buckhannon/Changing the
Planet/Phlorian Racing & Sir Joseph Birch/Martin Porter/Dyches/Vechery
During this period, fees of $1,377.50 have been incurred for the Ferentz investment,
$1,173.00 for the CMO investment, $2,525.00 for the Vestium/Arcanum/Buckhannon
investment, $1,169.50 for the Changing the Planet (Damante) investment, $687.00 for the
Phlorian Racing/Sir Joseph Birch Investment, $312.50 for the Martin Porter investment, $75.50
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for the Vechery investment and $534.00 related to Troy Dyches. These investments, while
substantial, have been fully investigated and Receiver has determined that recovery is unlikely
and no further action will be required. Services generally consisted of meeting with investors
and interested third-parties to discuss the investments, obtaining (often by court order) and
reviewing financial records to trace EIMT investment funds, working with law enforcement to
share information, monitoring bankruptcy actions and filing proofs of bankruptcy claim (where
applicable) and assessing the likelihood of recovery for the remaining funds. Receiver obtained
orders requiring Matthew Tucker and Attorney Michael Callahan to disgorge $2.0 million related
to the CMO, but Tucker has been convicted of mortgage fraud and appears to have no assets and
it is not clear what assets Callahan has other than a home in Bainbridge, Washington that is
currently in foreclosure. Through Washington counsel, Receiver recorded his disgorgement
order against the Bainbridge, Washington home and is monitoring the status of the foreclosure of
the Bainbridge home. The estimated amount and likelihood of recovery on the above-detailed
investments is low. Anderson Declaration, 14 and Exhibit B; Dupree Declaration, Exhibit H.
8. General
During this period, fees of $12,813.00 have been incurred on general receivership
matters. Receiver and his service providers have attempted to categorize fees whenever possible,
but in numerous instances, services cut across multiple categories. When this is the case, the fees
are categorized as “general.” In this category, services include conferences between Receiver,
his staff, his accountant and/or counsel involving multiple matters, communications with third
parties and investors that encompass multiple categories, and analysis and investigation across
multiple categories. Anderson Declaration, 15 and Exhibit B; Dupree Declaration, Exhibit H.
C. Fees and Costs Requested
Attached as Exhibit A to the Anderson Declaration is a summary of invoices for the
services of Receiver, his accountant Stephan Werth, his consultant Cindi Sherrod and counsel
calculated at rates approved by the Court in various orders or the first fee application. Anderson
Declaration, 8, Exhibit A. Attached as Exhibit C to the Anderson Declaration are detailed
invoices for services rendered by Receiver from October 1, 2011 through August 31, 2012. Id.,
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MEMORANDUM IN SUPPORT OF RECEIVER’S SIXTH APPLICATION FOR FEES AND COSTS
CASE NO. CV 09-000665 LKK-DAD

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DODD CROLEY
MAIER LLP
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18, Exhibit C. Attached as Exhibit D to the Anderson Declaration are invoices for services
rendered by Receiver’s accountant, Stephan Werth. Id., 20, Exhibit D. Attached as Exhibit E
to the Anderson Declaration are invoices for services rendered by Receiver’s consultant, Cindi
Sherrod. Id., 21, Exhibit E. Receiver submits that the fees and costs of Receiver and his staff
were reasonably incurred, at rates reasonable for the services rendered, and benefited the
receivership estate. Id., 28.
In this application, Receiver seeks payment of $117,873.12 for his services, which
consists of $670.62 for costs and $117,202.50 in fees at the rate of $225.00 an hour or $112.50
an hour for travel time, which was previously approved by the Court and which Receiver
believes is a competitive rate for a receiver of his experience. Anderson Declaration, 16, 17
and Exhibit C. As described by his detailed billing records, this receivership has been extremely
active and Receiver has worked well over 538.3 hours on activities benefiting the receivership as
detailed above. Id. In addition, he has spent significant time preparing and reviewing this fee
application. Id. Although he normally would charge for time spent in connection with a fee
application, in conformity with the United States Securities and Exchange Commission Billing
Instructions, he has not sought fees for time spent in connection with this fee application and has
omitted time spent on this fee application from his invoices. Id.
Receiver seeks payment of $15,785.00 for his accountant Stephan Werth’s services,
which consists of $15,785.00 in fees at the rate of $175 an hour, which was previously approved
by the Court. Anderson Declaration, 18 and Exhibit D. From October 1, 2011 through August
31, 2012, Mr. Werth spent 90.2 hours working on this matter performing the tasks described in
his time records, including attending meetings with Receiver and his consultant Cindi Sherrod,
review and analysis of EIMT, EIMT fund financial records and SIG/VIP and Wiseman/Joiner
financial records, management of QuickBooks, review, analysis and management of the
receivership financial records, preparation of cash basis financial statements, preparation and
review of financial schedules to be included in Receiver’s Seventh Interim Report to the Court
and financial analysis related to the clawback process and the ultimate distribution plan. Id.
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MEMORANDUM IN SUPPORT OF RECEIVER’S SIXTH APPLICATION FOR FEES AND COSTS
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MAIER LLP
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Receiver seeks payment of $58,823.24 for his consultant Cindi Sherrod’s services, which
consists of $2,680.74 in costs and $56,142.50 in fees. Anderson Declaration, 19 and Exhibit E.
Ms. Sherrod bills her time at a rate of $50.00 an hour or $25.00 an hour for travel time, which
was previously approved by the Court. From October 1, 2011 through August 31, 2012,
Ms. Sherrod spent 1,160.1 hours working on this matter performing the tasks described in her
time records, including communicating with Receiver, Receiver’s accountant and his counsel,
maintaining the receivership website, investigating EIMT funds and assets, communicating with
Ken Kenitzer, identifying and communicating with EIMT investors and reviewing financial
documents and correspondence concerning various EIMT investment schemes. Id.
Attached as Exhibit H to the Dupree Declaration, are the invoices Receiver has received
from California counsel, Futterman Dupree, reflecting fees and costs from October 1, 2011
through August 31, 2012, at the rates approved by the Court and approved in connection with
Receiver’s first fee application. Anderson Declaration, 21; Dupree Declaration 2 and
Exhibit H. The total fees being billed are $70,059.5, and costs are $3,158.60. Anderson
Declaration, 21; Dupree Declaration 3 and Exhibit H. Prior to the issuance of invoices to
Receiver, Futterman Dupree reviews and discounts and/or removes certain time entries that
reflect excessive time for the task performed. The time recorded in Futterman Dupree’s invoices
therefore is less than the time actually spent providing services in this matter. Dupree
Declaration 2. In addition, while Futterman Dupree’s fees increased as to other clients as of
January 1, 2010, January 1, 2011 and January 1, 2012 by approximately nine percent in total, it
has maintained its 2009 billing rate in this matter, which effectively discounts its 2012 fees by
nine percent, also providing additional value for the EIMT investors. Id. As set forth above, in
calculating the fees and costs incurred by Futterman Dupree, Receiver realized that a $73.00
overpayment was made to Futterman Dupree in January 2012 in connection with Receiver’s Fifth
Application for Fees and Costs. Accordingly, while Futterman Dupree’s August 2012 invoice
reflects fees and costs incurred in the amount of $73,291.10, Futterman Dupree is only requesting
$73,218.10 as part of this fee application to take into account the $73.00 overpayment. This
deduction has been subtracted from the fee allocation. Id., 3 and Exhibit H. Receiver believes
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CASE NO. CV 09-000665 LKK-DAD

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DODD CROLEY
MAIER LLP
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these fees were reasonably incurred and benefited the receivership estate and reflect a substantial
value to the receivership estate. Anderson Declaration, 21. Accordingly, Receiver seeks
payment of $70,059.5 in fees and $3,158.60 for costs in the total amount of $73,218.10 for
Futterman Dupree’s services. Id., 24.
Attached as Exhibit I to the Dupree Declaration, are the invoices Receiver has received
from Washington counsel, Demco, reflecting fees and costs from October 1, 2011 through
August 31, 2012, at the rates approved by the Court in connection with the fourth fee application.
Anderson Declaration, 22; Dupree Declaration 4 and Exhibit I. The total fees billed are
$200.00, and costs are $0. Anderson Declaration, 24; Dupree Declaration 4 and Exhibit I.
Receiver believes these fees were reasonably incurred and benefited the receivership estate and
reflect a substantial value to the receivership estate. Anderson Declaration, 22. Accordingly,
Receiver seeks payment of $200.00 for Demco’s services. Id., 24.
Attached as Exhibit J to the Dupree Declaration, are the invoices Receiver has received
from bankruptcy counsel, Miriam Hiser, reflecting fees and costs from October 1, 2011 through
August 31, 2012, at the rates approved by the Court in its September 29, 2011 Order. (Doc. No.
429). Anderson Declaration, 22; Dupree Declaration 5 and Exhibit J. The total fees billed
are $32,900.00, and costs are $1,614.79. Anderson Declaration, 24; Dupree Declaration 5
and Exhibit J. Receiver believes these fees were reasonably incurred and benefited the
receivership estate and reflect a substantial value to the receivership estate. Anderson
Declaration, 23. Accordingly, Receiver seeks payment of $32,900.00 in fees and $1,614.79 for
costs in the total amount of $34,514.79 for Miriam Hiser’s services. Anderson Declaration, 24.
In summary, Receiver hereby requests that the Court approve payment in the following
amount for the services rendered in connection with this receivership from October 1, 2011
through August 31, 2012:
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Name Fees Costs Total Payment
Receiver Stephen E.
Anderson
Stephan A. Werth,
C.P.A.
$117,202.50 $670.62 $117,873.12
$15,785.00 _ $15,785.00
Cindi Sherrod $56,142.50 $2,680.74 $58,823.24
Demco Law Firm,
P.S.
The Law Offices of
Miriam Hiser
Futterman Dupree
Dodd Croley
Maier LLP
$200.00 _ $200.00
$32,900.00 $1,614.79 $34,514.79
$70,059.50 $3,158.60 $73,218.10 2
TOTALS $292,289.50 $8,124.75 $300,414.25
Anderson Declaration, 24.
Receiver submits that his services, the services of his accountant, consultant and counsel
have been reasonable, have been for the benefit of the receivership estate, and should be
compensated in the amounts set forth above. Anderson Declaration, 25. The rates at which
services have been billed are reasonable and have already been approved by the Court. See
generally Anderson and Dupree Declarations. Accordingly, Receiver requests that the Court
grant this application and approve payment of administrative expenses as set forth in the
proposed order accompanying this application.
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DODD CROLEY
MAIER LLP
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2 In calculating the fees and costs incurred by Futterman Dupree, Receiver realized that a $73.00 overpayment was
made to Futterman Dupree in January 2012 in connection with Receiver’s Fifth Application for Fees and Costs.
Accordingly, while Futterman Dupree’s August 2012 invoice reflects fees and costs incurred in the amount of
$73,291.10, Futterman Dupree is only requesting $73,218.10 as part of this fee application to take into account the
$73.00 overpayment. This deduction has been subtracted from the fee allocation. Dupree Declaration, 3.
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CONCLUSION
For the reasons set forth above, Receiver requests the Court’s approval of his sixth
application for fees and costs in the amount of $300,414.25.
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Dated: November 7, 2012
FUTTERMAN DUPREE
DODD CROLEY MAIER LLP
By:
/s/ Jamie L. Dupree
Jamie L. Dupree
Attorneys for Receiver
Stephen E. Anderson
FUTTERMAN DUPREE
DODD CROLEY
MAIER LLP
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MEMORANDUM IN SUPPORT OF RECEIVER’S SIXTH APPLICATION FOR FEES AND COSTS
CASE NO. CV 09-000665 LKK-DAD