Frederick J. Gilliland
RECEIVERSHIP WEB SITE

GENERAL INFORMATION




Lawsuit by the SEC

 

On March 27, 2002 the United States Securities and Exchange Commission ("SEC") filed a Complaint for Injunctive and Other Relief against Frederick J. Gilliland ("Gilliland") and MM ACMC Banque de Commerce, Inc. ("Banque de Commerce") alleging violations of the securities laws. The case no. is 3:02-CV-128-H and it is pending in the United States District Court for the Western District of North Carolina, Charlotte Division, the Honorable David C. Keesler presiding. On April 29, 2002 Banque de Commerce filed a Response to the Complaint. Gilliland never answered the lawsuit. Accordingly, on June 17, 2003 the SEC filed a Motion for Default Judgment against Gilliland. On July 21, 2004 the Court issued an Order granting the Motion for Default Judgment. On October 26, 2004 the Court entered a Final Judgment against Gilliland. This case directly relates to other proceedings pending in the same court before the same judge which are generally described as the "Rollar Proceedings." Click here for a link to that case and some information about it.


Appointment of the Receiver and His Activities

 

On March 5, 2003 the SEC filed a Motion to Appoint Receiver. On May 22, 2003 the Court issued its Order Appointing Receiver. Since his appointment, the Receiver has been tracing funds and identifying potential claimants and on October 2, 2003 the Receiver filed a Motion to Establish Claim Procedures and to Approve Claim Form. On November 24, 2003 the Court issued an Order approving the motion. As set forth in the motion, to the extent any claimant filed a claim in the Rollar Proceedings which is really a claim in these proceedings, it will be treated as such and there is no need to file a new claim. If you have not received a claim form and believe you have a claim, please contact the Receiver's claims administrator, Steve Tomasky, at stomasky@qsclpc.com.

On February 1, 2005 the Receiver filed a Motion to Approve Settlement Agreement with Maxine Gregory pursuant to which she agreed to pay the receivership estate $75,000.00. On March 21, 2005 the Court issued an Order Approving Settlement Agreement.

On May 20, 2004 the Receiver filed a Complaint against Marilyn Cristell seeking to recover what appeared to be a fraudulent transfer. After documents were produced which indicated the transaction was not a fraudulent transfer, the case was dismissed.

On May 20, 2004 the Receiver also filed a Complaint against Grand Street Trust and others seeking to recover fraudulent transfers. The Defendants ultimately agreed to pay the Receiver $25,000.00 and the case was dismissed.

On May 18, 2007 the Receiver filed his First Motion to Allow Claims. On May 30, 2007 the Court entered its Order granting the Receiver's motion.

On June 5, 2007 the Receiver filed his Second Motion to Allow Claims. On June 7, 2007 the Court entered its Order granting the Receiver's motion.

On June 5, 2007 the Receiver filed his Objections to Claims. On July 18, 2007 the Court entered its Order Regarding Receiver's Objections to Claims.

On July 27, 2007, the Receiver filed his Third Motion to Allow Claims (Exhibit 1). On August 10, 2007, the Court entered its Order granting the Receiver's motion.

On February 1, 2008, the Receiver filed his Final Report (Exhibit A - Exhibit B - Exhibit C - Exhibit D).

Assets of the Receivership

 

After Gilliland learned he was going to be prosecuted by the United States, he fled to Canada taking most of his assets with him or transferring them to offshore bank accounts. The primary asset available to pay claims are distributions from the Rollar Proceedings which account for funds Gilliland aggregated from investors and "upstreamed" to accounts which are the subject of the Rollar Proceedings. The total amount of distributions out of the Rollar Proceedings to this receivership was $2,074,442.65.

In addition, this receivership has obtained a distribution from the Receiver in Securities and Exchange Commission v. Funding Resource Group, et al.; Case No. 3:98-CV-2689, which involved the receivership proceedings of Hammersmith Trust, an entity to whom Gilliland sent investor funds. The amount of the distribution was $477,421.24. Finally, the Receiver obtained $75,000.00 from Maxine Gregory as the result of a settlement described above.

Activities of the Receiver against Gilliland in Canada

After his appointment, the Receiver hired legal counsel in Canada to have the Canadian courts recognize his appointment and to freeze the assets of Gilliland. In that regard the Receiver filed a Statement of Claim and Motion which requested such relief. Thereafter, on July 30, 2003 and August 11, 2003 the Supreme Court of British Columbia issued Orders which recognized the appointment of the Receiver in Canada and froze all of Gilliland’s assets.

At the time the July 30, 2003 Order was issued, Gilliland was hours away from selling his house in Vancouver. As a result of the Order, the sale was stopped and all of Gilliland’s known personal assets and his car were seized by the Receiver. Since that time the Receiver has concluded the sale of the house for $1,580,000.00 (Canadian) after filing a Motion and obtaining an Order. The Receiver has returned Gilliland’s car to the leasing company and has filed a Motion to allow him to sell all of Gilliland’s personal assets. As a result of a hearing on December 17, 2003 and negotiations, it was agreed that most of Gilliland's possessions would be sold and the proceeds would be held in the trust account of the Receiver's lawyers in Canada. On December 19, 2003 the Court in Canada issued an Order to that effect.

Criminal Proceedings against Gilliland

On October 16, 2001, a federal grand jury in Pensacola, Florida issued an Indictment against Gilliland charging him with conspiracy to commit securities fraud, wire fraud and money laundering. Prior to the issuance of the Indictment, Gilliland liquidated all his possessions in the United States and fled to Canada where he remained a fugitive until July 29, 2003 when he was arrested by the Canadian authorities as a result of extradition proceedings brought by the United States.

On March 12, 2005, Gilliland was duped into crossing the U.S./Canadian border on the pretext of a free lunch and was promptly arrested. He was then sent to Pensacola, Florida for trial where he pled guilty on June 24, 2005. At his sentencing hearing on October 11, 2005 Gilliland was sentenced to 60 months in federal prison. Click here to review the newspaper article regarding his arrest.

Costs of Administration

On October 8, 2003 the Receiver filed his First Interim Application to Allow and Pay (1) Receiver’s Fees and Expenses and (2) Attorneys’ Fees and Expenses for the time period from July 1, 2003 through September 30, 2003. On November 21, 2003 the Court issued an Order approving the First Interim Application and, thereafter, the Receiver and his law firm were paid a total of $69,746.32.

On February 13, 2004 the Receiver filed his Second Interim Application to Allow and Pay (1) Receiver's Fees and Expenses and (2) Attorneys' Fees and Expenses for the time period from October 1, 2003 through January 31, 2004. On June 1, 2004 the Court issued an Order approving the Second Interim Application and, thereafter, the Receiver and his law firm were paid a total of $91,634.81.

On June 9, 2004 the Receiver filed his Third Interim Application to Allow and Pay (1) Receiver's Fees and Expenses and (2) Attorneys' Fees and Expenses for the time period from February 1, 2004 through April 30, 2004. On July 20, 2004 the Court issued an Order approving the Third Interim Application and, thereafter, the Receiver and his law firm were paid a total of $25,548.25.

On October 13, 2004 the Receiver filed his Fourth Interim Application to Allow and Pay (1) Receiver's Fees and Expenses and (2) Attorneys' Fees and Expenses for the time period from May 1, 2004 through September 30, 2004. On October 26, 2004 the Court issued an Order approving the Fourth Interim Application and, thereafter, the Receiver and his law firm were paid a total of $18,336.98.

On January 21, 2005 the Receiver filed his Fifth Interim Application to Allow and Pay (1) Receiver's Fees and Expenses and (2) Attorneys' Fees and Expenses for the time period from October 1, 2004 through December 31, 2004. On April 15, 2005 the Court issued an Order approving the Fifth Interim Application and, thereafter, the Receiver and his law firm were paid a total of $6,684.27.

On April 7, 2005 the Receiver filed his First Interim Application to Allow and Pay Attorneys' Fees and Expenses of Canadian Counsel. On July 14, 2005 the Court issued an Order granting the application. Thereafter, the Receiver paid Bennett Jones, LLP $119,932.74 and Edwards, Kenny & Bray $13,638.60.

On April 27, 2005 the Receiver filed his Sixth Interim Application to Allow and Pay (1) Receiver's Fees and Expenses and (2) Attorneys' Fees and Expenses for the time period from January 1, 2005 through March 31, 2005. On May 25, 2005 the Court issued an Order approving the Sixth Interim Application and, thereafter, the Receiver and his law firm were paid a total of $29,908.15.

On August 25, 2005 the Receiver filed his Seventh Interim Application to Allow and Pay (1) Receiver's Fees and Expenses and (2) Attorneys' Fees and Expenses for the time period from April 1, 2005 through July 31, 2005. On September 25, 2005 the Court issued an Order approving the Seventh Interim Application and, thereafter, the Receiver and his law firm were paid a total of $52,581.10.

On November 16, 2005 the Receiver filed his Eighth Interim Application to Allow and Pay (1) Receiver's Fees and Expenses and (2) Attorneys' Fees and Expenses for the time period from August 1, 2005 through October 31, 2005. On December 28, 2005 the Court issued an Order approving the Eighth Interim Application and, thereafter, the Receiver and his law firm were paid a total of $9,254.70.

On June 11, 2006 the Receiver filed his Ninth Interim Application to Allow and Pay (1) Receiver's Fees and Expenses and (2) Attorneys' Fees and Expenses for the time period from November 1, 2005 through October 31, 2006. On December 19, 2006 the Court issued an Order approving the Ninth Interim Application and, thereafter, the Receiver and his law firm were paid a total of $37,204.89.

On February 1, 2008 the Receiver filed his Final Application to Allow and Pay (1) Receiver's Fees and Expenses and (2) Attorneys' Fees and Expenses for the time period from November 1, 2006 through January 31, 2008.

On February 1, 2008 the Receiver filed his Final Application to Allow and Pay Attorneys' Fees and Expenses of Canadian Counsel.

On February 1, 2008 the Receiver filed his Application for Compensation of Fees and Reimbursement of Expenses for Accountants.

 

Documents

Document
Number
Date Filed/
Sent or Signed
Document Title
1
03.26.02
Complaint for Injunctive and Other Relief
2
04.29.02
Response to Complaint for Injunctive and Other Relief
3
06.17.03
Plaintiff's Motion for Default Judgment against Defendant Frederick Gilliland
4
10.21.03
Order Setting Case for Trial March 15, 2004
5
05.02.03
Securities and Exchange Commission's Motion to Appoint Receiver
6
05.22.03
Order Appointing Receiver
7
10.02.03
Receiver's Unopposed Motion to Establish Claim Procedures and to Approve Claim Form
8
07.30.03
Writ of Summons and Statement of Claim
9
07.30.03
Notice of Motion
10
07.30.03
Order
11
07.30.03
Order
12
08.22.03
Notice of Motion
13
08.26.03
Order
14
10.07.03
Receiver's Unopposed First Interim Application to Allow and Pay (1) Receiver's Fees and Expenses and (2) Attorneys' Fees and Expenses and Brief in Support
15
11.24.03
Order
16
12.19.03
Order Regarding the Sale of Gilliland's Possessions
17
11.21.03
Order Approving First Interim Application to Allow and Pay (1) Receiver's Fees and Expenses and (2) Attorneys' Fees and Expenses.
18
02.13.04
Receiver's Unopposed Second Interim Application to Allow and Pay (1) Receiver's Fees and Expenses and (2) Attorneys' Fees and Expenses and Brief in Support
19
06.01.04
Order
20
06.09.04
Receiver's Unopposed Third Interim Application to Allow and Pay (1) Receiver's Fees and Expenses and (2) Attorneys' Fees and Expenses and Brief in Support
21
07.20.04
Order Approving Third Interim Application
22
10.13.04
Receiver's Unopposed Fourth Interim Application to Allow and Pay (1) Receiver's Fees and Expenses and (2) Attorneys' Fees and Expenses and Brief in Support
23 10.26.04 Final Judgment as to Defendant Frederick Gilliland
24 10.27.04 Order Granting Receiver's Fourth Interim Fee Application
25 01.21.05 Receiver's Unopposed Fifth Interim Application to Allow and Pay (1) Receiver's Fees and Expenses and (2) Attorneys' Fees and Expenses and Brief in Support
26 02.01.05 Receiver's Motion to Approve Settlement Agreement [Gregory]
27 03.21.05 Order Approving Settlement Agreement [Gregory]
28 4.07.05 Receiver's First Interim Application to Allow and Pay Attorneys' Fees and Expenses of Canadian Counsel and Brief in Support
29 04.15.05 Order Granting Receiver's Fifth Interim Fee Application
30 04.27.05 Receiver's Unopposed Sixth Interim Application to Allow and Pay (1) Receiver's Fees and Expenses and (2) Attorneys' Fees and Expenses and Brief in Support
31 05.25.05 Order Granting Receiver's Sixth Interim Fee Application
32 07.14.05 Order Granting Receiver's First Interim Fee Application of Canadian Counsel
33 08.25.05 Receiver's Unopposed Seventh Interim Application to Allow and Pay (1) Receiver's Fees and Expenses and (2) Attorneys' Fees and Expenses and Brief in Support
34 09.15.05 Order Granting Receiver's Seventh Interim Fee Application
35 11.16.05 Receiver's Unopposed Eighth Interim Application to Allow and Pay (1) Receiver's Fees and Expenses and (2) Attorneys' Fees and Expenses and Brief in Support
36 12.28.05 Order Granting Receiver's Eighth Interim Fee Application
37 04.21.05 Receiver's Second Interim Application to Allow and Pay Attorneys' Fees and Expenses of Canadian Counsel and Brief in Support
38 06.05.06 Order Granting Receiver's Second Interim Fee Application of Canadian Counsel
39 09.05.06 Order (regarding filing of status report)
40 09.14.06 Status Report
41 11.15.06 Order Approving Receiver's Unopposed Motion to Approve Compromise and Settlement Agreement (Cristell)
42 11.15.05 Order Approving Receiver's Unopposed Motion to Approve Settlement and Release Agreement
43 11.16.06 Receiver's Unopposed Ninth Interim Application to Allow and Pay (1) Receiver's Fees and Expenses and (2) Attorneys' Fees and Expenses and Brief in Support
44 12.20.06 Order Granting Receiver's Unopposed Ninth Interim Fee Application
45 01.03.07 Motion of Defendant Rein Evans Sestanovich for Entry of Default Judgment - Declaration in Support
46 05.18.07 Receiver's First Motion to Allow Claims
47 05.30.07 Order (Granting the Reciever's First Motion to Allow Claims)
48 06.05.07 Receiver's Second Motion to Allow Claims
50 06.05.07 Receiver's Objection to Claims
49 06.05.07 Order (Granting the Reciever's Second Motion to Allow Claims)
50 06.07.07 Receiver's Objection to Claims
51 07.18.07 Order Regarding Receiver's Objections to Claims
52 07.27.07 Third Motion to Allow Claims
53 08.10.07 Order (Granting the Receiver's Third Motion to Allow Claims)
54 02.01.08 Final Report (Exhibit A - Exhibit B - Exhibit C - Exhibit D)
55 02.01.08 Final Application to Allow and Pay (1) Receiver's Fees and Expenses and (2) Attorneys' Fees and Expenses
56 02.01.08 Final Application to Allow and Pay Attorneys' Fees and Expenses of Canadian Counsel
57 02.01.08 Application for Compensation of Fees and Reimbursement of Expenses for Accountants