The Seizure of Funds
LAST UPDATE: AUGUST 9, 2005

In December 1998 and May 2000, in connection with a criminal investigation of a massive and fraudulent investment scheme, the FBI seized funds on deposit in an account in the name of MM ACMC Banque De Commerce, Inc. at NationsBank, N.A. in Charlotte, North Carolina totaling $18,855,770.69. The funds have been held under the supervision of the United States Marshals Service in an interest bearing account since that time. As of October 31, 2001, the amount of $20,954,404.54 was being held, including accrued interest. The funds were seized pursuant to seizure warrants issued by the United States District Court for the Western District of North Carolina, Charlotte Division, in Cause No. 3:98-MC-96-MU styled In Re: All Funds On Deposit In Account Number 000669829075 in the name of MM ACMC Banque De Commerce, Inc. at NationsBank, NA consisting of $18,756,420.97 More or Less. After the seizure, the FBI continued its investigation and ultimately a decision was made that indictments would not be sought in North Carolina and that the funds should be returned to the victims of the scheme by virtue of civil proceedings instead of criminal restitution or petitions in remission. Accordingly, on June 18, 2001 the United States of America sought and obtained an Order Appointing Receiver to administer the funds. Upon learning of the appointment of a receiver, George and Delores Rollar (described more fully below) objected and ultimately the matter was resolved as part of the Rollar Lawsuit.

On May 1, 2001 George and Delores Rollar filed a civil lawsuit against the United States of America and a number of government officials alleging that a substantial portion of the funds seized belonged to them and requesting an immediate return of the funds. The case was assigned Cause No. 3:01-CV-205-McK and is pending before the United States District Court for the Western District of North Carolina, Charlotte Division, the Honorable David C. Keesler presiding. On July 2, 2001 Richard Vasquez intervened in the case claiming that he also had an interest in the seized funds and requesting that the funds be returned to him.

On October 11, 2001 a Consent Order was entered in the Rollar Lawsuit which provided for the appointment of a receiver to determine the identity of valid claimants to the funds and to recommend a distribution plan to the Court. After a hearing held on October 29, 2001 the Court issued an Order which specifically appointed Michael J. Quilling to act as receiver.

On October 29, 2001 Richard Vasquez filed a Petition for an Emergency Distribution of funds to him to prevent a home foreclosure. After his appointment, the Receiver was provided information and documentation by Richard Vasquez which established the validity and amount of his claim. An Order was then submitted by Richard Vasquez and the Receiver to the Court which authorized an immediate distribution to him in an amount equal to 10% of his claim. On November 7, 2001 the Court issued an Order approving the distribution. On February 20, 2002, Richard Vasquez filed a Second Petition for an Emergency Distribution of funds and on February 25, 2002, the Court signed a Consent Order regarding the distribution. On May 6, 2002 Richard Vasquez filed a Third Petition for Distribution of Funds and on May 9, 2002 the Court entered an Order granting the distribution. During the same time period, information and documentation was also supplied to the Receiver by George and Delores Rollar which established the validity and amount of their claim. On November 28, 2001 the Court issued its Order authorizing the Receiver to make an immediate interim distribution of 10% of their claim.

After his appointment the Receiver was provided certain materials by the National Authority for Investigation and Prosecution of Economic and Environmental Crime in Norway (OKOKRIM) which indicated they had frozen approximately $356,000 which was directly traceable to the MM ACMC Banque De Commerce, Inc. account at NationsBank prior to its seizure by the FBI. On December 6, 2001 the Receiver filed an Unopposed Application to pursue those funds so as to increase the amount available to claimants. On December 10, 2001 the Court issued an Order granting the Motion. On September 30, 2004 the Receiver filed his Emergency Motion to Allow Retention of Counsel and Payment of Fees. On October 6, 2004 the Court issued an Order Authorizing Retention of Counsel. Since that time the Receiver's Norwegian counsel has filed legal papers to determine the ownership of the $300,000. The Receiver's efforts to obtain the funds are being challenged by Christian Mohr's business partner, Carlos Firetto, who has made a bogus claim to the funds. On April 15, 2005, the Norwegian government released $90,988.90 to the Receiver which funds are not part of the $300,000 referenced above. Trial as to who gets the $300,000 is scheduled in Norway on April 24, 2006 through May 5, 2006.

At the time of the hearing on October 29, 2001, the parties stipulated that $502,000.00 of the funds held by the United States Marshals Service should be transferred to the United States Attorney's Office in Pensacola, Florida which is prosecuting criminal charges against Fred Gilliland in connection with a different fraudulent investment scheme. The $502,000.00 is directly traceable from that program and should not have been commingled with the balance of the seized funds. On December 10, 2001 the Court issued its Order directing a transfer of the $502,000.00.

On December 11, 2001, A.C.W. Mohr, on behalf of MM ACMC Banque de Commerce, Inc., filed a Motion for Return of Property Seized pursuant to which they seek a return of all the funds seized by the FBI. On December 20, 2001, the Receiver filed an Unopposed Application to Expand Powers and Duties so as to allow the Receiver to oppose the motion. On January 2, 2002, the Court issued an Order Expanding Receiver's Powers and Duties. In anticipation that the application would be granted, the Receiver filed a Response to the Motion to Return Property Seized on December 26, 2001. Responses were also filed by the United States of America, George and Delores Rollar and Richard Vasquez. In addition, as a result of the filing of the Motion for Return of Property Seized, the Court issued an Order Consolidating Cases pursuant to which the Seizure Action and the Rollar Lawsuit were consolidated.

On May 8, 2002, the Receiver, George and Dolores Rollar and Richard Vasquez filed a Motion for Summary Judgment with respect to the Motion for Return of Property Seized. On July 12, 2002, MM ACMC Banque de Commerce, Inc. filed a Response, and on July 19, 2002 a Reply was filed. Copies of the Motion, Response and Reply (without voluminous exhibits) can be reviewed below. On July 30, 2002 the Court issued an Order denying the Motion for Return of Property Seized and granting the Motion for Summary Judgment.

On August 7, 2002 the Receiver filed a Motion to Convey Seized Funds to Receiver so as to facilitate and expedite the distribution process. On August 8, 2002 the Court signed a Consent Order authorizing the U.S. Marshals Service to transfer the balance of the seized funds to the Receiver. Thereafter, the U.S. Marshals Service transferred $18,982,691.10 to the Receiver who is holding it in safe, interest-bearing accounts.

On January 17, 2003 the Receiver filed an Unopposed Motion to Transfer Funds pursuant to which he sought permission to transfer $150,000 of funds to the United States Attorney's office in Pensacola. The $150,000 is directly traceable to a different fraudulent investment scheme which should not have been commingled with the seized funds. On January 21, 2003 the Court issued an Order Authorizing Transfer of Funds.

On February 21, 2002 the Receiver filed an Unopposed Motion to Establish Claim Procedures and to Approve Claim Form. On February 25, 2002 the Court signed its Order granting the motion. As a result, several very important procedures were established. First, the Court approved a Claim Form. Click here to view it. This is the ONLY form which will be accepted by the Receiver. Second, the Court approved a letter to be sent by the Receiver along with each claim form once the Receiver identifies a potential claimant. Click here to view the letter. The letter is self-explanatory. Third, once you receive the Claim Form from the Receiver, you MUST RETURN IT WITHIN 60 DAYS. Failure to do so may result in your claim being disallowed. You CANNOT submit your completed claim form to the Receiver via email. You must mail it. It is suggested that you mail it via certified mail.

The Claim Form will be sent to potential claimants as they are identified by the Receiver. If you believe you have a claim but have not received a Claim Form and letter from the Receiver, please contact the Receiver's Claim Administrator, Steve Tomasky at (214) 871-2100 or via email at stomasky@qsclpc.com immediately.

After your completed Claim Form is received by the Receiver, you will be sent a post card which acknowledges receipt and which tells you if you need to do anything further. If the post card tells you that you don't need to do anything further, please do not contact the Receiver's office. It will only increase the costs. If there is anything to report to you, it will be posted on this web site.

On September 22, 2002 the Receiver filed an Unopposed Motion to Establish Distribution Procedures and Request for Evidentiary Hearing. As set forth in the motion, once an agreement is reached as to the net amount of a claim, the Receiver requests authority to make an immediate interim distribution equal to approximately 63% of the amount of the claim.

On October 7, 2002 the Receiver filed his Unopposed Motion to Establish Tax Reserve with respect to potential income tax liability relating to $2,416,732.19 of interest which accrued on the seized funds while in the possession of the United States Marshals Service. As a result of the need for a tax liability reserve, the Receiver also filed an Amended Motion to Establish Distribution Procedures whereby the amount to be paid as to each allowed claim on an interim basis is reduced to 57.59% of the amount of the claim. On October 11, 2002 the Court entered an Order Establishing Tax Reserve and an Order approving the Receiver's Amended Motion to Establish Distribution Procedures. Since that time, on July 28, 2003 the Receiver filed a Request for Tax Determination Letter with the IRS. On May 6, 2004 the IRS issued a Private Letter Ruling in favor of the Receiver. On June 30, 2004 the Receiver filed his Notice of IRS Private Letter Ruling.

On November 12, 2002 the Receiver filed his First Motion to Allow Claims and Make Interim Distribution. On November 25, 2002 the Court issued an Order approving the First Motion and thereafter the Receiver issued distribution checks to the individuals in the amounts set forth in the Order.

On December 9, 2002 the Receiver filed his Second Motion to Allow Claims and Make Interim Distribution. On December 27, 2002 the Court issued an Order approving the Second Motion and thereafter the Receiver issued distribution checks to the individuals in the amounts set forth in the Order.

On January 9, 2003 the Receiver filed his Third Motion to Allow Claims and Make Interim Distribution. On January 30, 2003 the Court issued an Order approving the Third Motion and thereafter the Receiver issued distribution checks to the individuals in the amounts set forth in the Order.

On March 10, 2003 the Receiver filed his Fourth Motion to Allow Claims and Make Interim Distribution. On April 11, 2003 the Court issued an Order approving the Fourth Motion and thereafter the Receiver issued distribution checks to the individuals in the amounts set forth in the Order.

On August 12, 2003 the Receiver filed his Fifth Motion to Allow Claims and Make Interim Distribution. On September 5, 2003 the Court issued an Order approving the Fifth Motion and thereafter the Receiver issued distribution checks in the amounts set forth in the Order.

On September 10, 2003 the Receiver filed his Sixth Motion to Allow Claims and Make Interim Distribution. On October 23, 2003 the Court issued an Order approving the Sixth Motion and thereafter the Receiver issued distribution checks in the amounts set forth in the Order.

On December 10, 2003 the Receiver filed his Seventh Motion to Allow Claims and Make Interim Distribution. On December 31, 2003 the Court issued an Order approving the Seventh Motion and thereafter the Receiver issued distribution checks in the amounts set forth in the Order.

On April 5, 2004 the Receiver filed a Motion to Approve Aggregate Claim and to Segregate Funds for International Investment Group Investors. On April 20, 2004 the Court issued an Order approving the motion. On April 27, 2005 the Receiver filed a Motion to Allow/Disallow IIG Claims and Make Interim Distribution. On May 25, 2005 the Court entered an Order granting the motion.

On April 5, 2004 the Receiver filed his First Motion to Disallow Potential Claims. On July 21, 2004 the Court issued an Order disallowing certain claims.

On May 11, 2004 the Receiver filed his Eighth Motion to Allow Claims and Make Interim Distribution. On May 27, 2004 the Court issued an Order approving the Eighth Motion and thereafter the Receiver issued distribution checks in the amounts set forth in the Order.

On July 8, 2004 the Receiver filed his Ninth Motion to Allow Claims and Make Interim Distribution. On July 20, 2004 the Court issued an Order approving the Ninth Motion and thereafter the Receiver issued distribution checks in the amounts set forth in the Order.

On September 29, 2004 the Receiver filed his Tenth Motion to Allow Claims and Make Interim Distribution. On October 26, 2004 the Court issued an Order approving the Tenth Motion and thereafter the Receiver issued distribution checks in the amounts set forth in the Order.

On September 29, 2004 the Receiver filed his Unopposed Motion to Make Supplemental Distribution pursuant to which he requested that the distribution percentage be increased to 64%. On November 2, 2004 the Court issued an Order authorizing the increase and, thereafter, the Receiver sent checks to all holders of allowed claims.

On September 29, 2004 the Receiver filed his Second Motion to Disallow Filed Claims and Potential Claims and Request for Evidentiary Hearing. An evidentiary hearing was held at 9:00 a.m. on January 26, 2005. On February 4, 2005 the Court issued its Order regarding the objections raised by the Receiver in the Second Motion to Disallow Filed Claims and Potential Claims.

On January 18, 2005, John Valentine filed a Petition for a First Emergency Distribution of Funds from Receiver and Declaration in Support. On January 24, 2005 George Rollar filed a Response and on January 25, 2005 the Receiver filed a Response. The matter was considered by the Court on January 26, 2005 at which time the Court ruled that John Valentine could file supplemental materials. A Supplemental Declaration was filed by John Valentine on January 28, 2005 and on February 4, 2004 the Receiver filed a Response. On February 24, 2005 the Court issued an Order which denied the motion and which gave Valentine 20 days to file materials with the Court or his claims would be denied. On March 17, 2005 Valentine filed a Response to Order to Show Cause and on April 5, 2005 the Receiver filed a Reply to Reponse to Order to Show Cause. On April 14, 2005 Valentine filed a Sur-Reply in Response to Order to Show Cause. On May 25, 2005 the Court entered an Order which gave Valentine and the Receiver until June 16, 2005 to submit any further evidence on the Motion to Disallow the Valentine Claims. On June 15, 2005 Valentine filed an Opposition to Receiver's Motion to Disallow Claims of Claimant Obasi John Valentine and on July 11, 2005 the Receiver filed his Response.

On February 1, 2005 the Receiver filed his Eleventh Motion to Allow Claims and Make Interim Distribution. On February 24, 2005 the Court issued an Order approving the motion and thereafter the Receiver issued distribution checks in the amounts set forth in the Order.

On February 1, 2005 the Receiver filed a Motion to Approve Settlement Agreement with respect to the claim of Maxine Gregory which provides that her claim will be withdrawn with prejudice. On February 24, 2005 the Court issued an Order approving the agreement.

On August 18, 2005 the Receiver and counsel for International Trade and Capital, Inc. filed a Stipulation regarding allowance of those claims which the Court approved on September 13, 2005. Thereafter, the Receiver issued distribution checks with respect to those claims.

On February 2, 2006 the Court issued an Order authorizing a second supplemental distribution.

On March 29, 2006 the Receiver filed his Motion to Allow Supplemental Distribution of IIG Claims and Supporting Exhibit. The Court issued an Order approving the Receiver's motion on April 17, 2006.

On November 2, 2006 the Receiver filed his Final Report and Proposed Distribution Plan. On January 9, 2007 the Government filed its Response and Notice Regarding Receiver's Final Report and Claim of Obasi John Valentine and Supporting Exhibit. On January 19, 2007 the Reciever filed his Notice of Restitution Lien and Supporting Exhibits (Exhibit 1 - Exhibit 2). On January 23, 2007 the Government filed its Response to Receiver's Notice of Restitution Lien Regarding Claim of Obasi John Valentine. On January 23, 2007 the Receiver filed his Notice of Clarification of Receiver's Position Regarding Valentine Claims. On February 2, 2007 the Court entered an Order Approving Final Report and Proposed Distribution Plan. On February 6, 2007 Obasi John Valentine filed his Response to various pleadings submitted by the Receiver and the Government.

On February 12, 2007 Obasi John Valentine filed his Request for Delay of Distribution by Receiver and Extension of Time Within Whitch to Post Bond. On February 13, 2007 the Receiver filed his Response to Request for Delay of Distribution and Extension of Time. On February 23, 2007 the Court entered an Order denying Valentine's motion to stay the Receiver's distribution.

LEGAL FEES

Pursuant to Paragraph Two of the Court's Consent Order of October 11, 2001 which appointed a receiver in these proceedings, all costs and expenses, after Court approval, are to be paid out of the Seized Funds. On February 15, 2002 the Receiver filed his First Interim Application to Allow and Pay (1) Receiver's Fees and Expenses and (2) Attorneys' Fees and Expenses. On February 20, 2002 the Court issued an Order Approving the First Interim Application and, thereafter, the Receiver and his law firm were paid a total of $71,916.77 in fees and expenses.

On May 8, 2002 the Receiver filed his Second Interim Application to Allow and Pay (1) Receiver's Fees and Expenses and (2) Attorneys' Fees and Expenses. On May 10, 2002 the Court issued an Order Approving the Second Interim Application and, thereafter, the Receiver and his law firm were paid a total of $72,877.21 in fees and expenses.

On August 12, 2002 the Receiver filed his Third Interim Application to Allow and Pay (1) Receiver's Fees and Expenses and (2) Attorneys' Fees and Expenses. On August 16, 2002 the Court issued an Order Approving the Third Interim Application and, thereafter, the Receiver and his law firm were paid a total of $50,288.94 in fees and expenses.

On August 12, 2002 the Receiver also filed a Motion to Allow Reimbursement of Legal Expenses to George Rollar's attorneys, Mayer, Brown, Rowe & Maw, for fees incurred with respect to the Motion for Summary Judgment as to the Motion for Return of Property Seized. On August 21, 2002 the Court issued an Order approving the Motion and, thereafter, Mayer, Brown, Rowe & Maw were paid $54,839.25 in fees and expenses.

On November 12, 2002 the Receiver filed his Fourth Interim Application to Allow and Pay (1) Receiver's Fees and Expenses and (2) Attorneys' Fees and Expenses. On November 14, 2002 the Court issued an Order Approving the Fourth Interim Application and, thereafter, the Receiver and his law firm were paid a total of $117,104.73 in fees and expenses.

On February 27, 2003 the Receiver filed his Fifth Interim Application to Allow and Pay (1) Receiver's Fees and Expenses and (2) Attorneys' Fees and Expenses. On February 28, 2003 the Court issued an Order Approving the Fifth Interim Application and, thereafter, the Receiver and his law firm were paid a total of $76,857.88 in fees and expenses.

On May 19, 2003 the Receiver filed his Sixth Interim Application to Allow and Pay (1) Receiver's Fees and Expenses and (2) Attorneys' Fees and Expenses. On June 16, 2003 the Court issued an Order Approving the Sixth Interim Application and, thereafter, the Receiver and his law firm were paid a total of $53,861.34 in fees and expenses.

On August 13, 2003 the Receiver filed his Seventh Interim Application to Allow and Pay (1) Receiver's Fees and Expenses and (2) Attorneys' Fees and Expenses. On November 24, 2003 the Court issued an Order Approving the Seventh Interim Application and, thereafter, the Receiver and his law firm were paid a total of $33,961.58 and Mary Vance was paid $27,780.00.

On October 14, 2003 the Rollars filed a Motion and Memorandum of Authorities requesting attorney's fees and costs in the amount of $148,276.57 incurred by them in connection with these proceedings, which fees and costs benefited all claimants in the case. On November 3, 2003, the U.S. Government filed a Response to the Motion. On November 24, 2003 the Rollars filed a Reply and on December 4, 2003 the U.S. Government filed a Sur-Reply. On September 30, 2004 the Court entered an Order denying the request for fees.

On November 14, 2003 the Receiver filed his Eighth Interim Application to Allow and Pay (1) Receiver's Fees and Expenses and (2) Attorneys' Fees and Expenses. On December 8, 2003 the Court issued an Order Approving the Eighth Interim Application and, thereafter, the Receiver and his law firm were paid a total of $46,447.34.

On February 17, 2004 the Receiver filed his Ninth Interim Application to Allow and Pay (1) Receiver's Fees and Expenses and (2) Attorneys' Fees and Expenses. On May 28, 2004 the Court issued an Order Approving the Ninth Interim Application and, thereafter, the Receiver and his law firm were paid a total of $6,705.48.

On June 9, 2004 the Receiver filed his Tenth Interim Application to Allow and Pay (1) Receiver's Fees and Expenses and (2) Attorneys' Fees and Expenses. On July 20, 2004 the Court issued an Order Approving the Tenth Interim Application and, thereafter, the Receiver and his law firm were paid a total of $43,563.74.

On October 13, 2004 the Receiver filed his Eleventh Interim Application to Allow and Pay (1) Receiver's Fees and Expenses and (2) Attorneys' Fees and Expenses. On November 2, 2004 the Court issued an Order Approving the Eleventh Interim Application and, thereafter, the Receiver and his law firm were paid a total of $78,065.86.

On January 21, 2005 the Receiver filed his Twelfth Interim Application to Allow and Pay (1) Receiver’s Fees and Expenses and (2) Attorneys' Fees and Expenses. On February 24, 2005 the Court issued an Order Approving the Twelfth Interim Application and, thereafter, the Receiver and his law firm were paid a total of $21,688.17.

On April 27, 2005 the Receiver filed his Thirteenth Interim Application to Allow and Pay (1) Receiver's Fees and Expenses and (2) Attorneys' Fees and Expenses. On May 25, 2005 the Court issued an Order Approving the Thirteenth Interim Application and thereafter, the Receiver and his law firm were paid a total of $28,836.18.

On August 25, 2005 the Receiver filed his Fourteenth Interim Application to Allow and Pay (1) Receiver's Fees and Expenses and (2) Attorneys' Fees and Expenses. On September 15, 2005 the Court issued an Order Approving the Fourteenth Interim Application and thereafter, the Receiver and his law firm were paid a total of $9,544.24.

On November 16, 2005 the Receiver filed his Fifteenth Interim Application to Allow and Pay (1) Receiver's Fees and Expenses and (2) Attorneys' Fees and Expenses. On December 28, 2005 the Court issued an Order approving the Fifteenth Interim Application and thereafter, the Receiver and his law firm were paid a total of $4,691.33.

On November 2, 2006 the Receiver filed his Final Application to Allow and Pay (1) Receiver's Fees and Expenses and (2) Attorney's Fees and Expenses. On November 14, 2006 the Court issued its Order approving the Receiver's motion.

ACCOUNTING FEES

On July 17, 2003 the Receiver filed his First Interim Application for Compensation for his accountants, Litzler, Segner, Shaw & McKenney. On August 7, 2003 the Court issued an Order approving the compensation and thereafter the accountants were paid $46,989.46.

On November 2, 2006 the Receiver filed his Final Application by Receiver for Compensation of Fees and Reimbursement of Expenses for Accountants for Receiver. On November 14, 2006 the Court issued its Order approving the Receiver's motion.

On March 27, 2003 the United States Securities and Exchange Commission ("SEC") filed a Complaint against Fred Gilliland and MM ACMC Banque De Commerce Inc. alleging violations of federal securities laws by Gilliland in raising the funds from investors which were seized. On March 5, 2003 the SEC filed a Motion to Appoint Receiver asking the Court to appoint a receiver for Gilliland and all of the companies and assets which he controlled. On May 22, 2003 the Court issued an Order appointing Mr. Quilling as receiver. Accordingly, Mr. Quilling is now the receiver for both the seized funds and for Gilliland and his companies. A separate section herein relates to Fred Gilliland and Sterling Management Services, Inc. Click here to transfer to that section. The most significant development to date, however, is that the Supreme Court in Vancouver, British Columbia has entered an Order formally recognizing Mr. Quilling's appointment as receiver and has frozen all of Gilliland's assets. In addition, Gilliland was arrested by the Canadian authorities and he was under house arrest awaiting the conclusion of an extradition hearing. 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 October 11, 2005 Gilliland was sentenced to 60 months in federal prison. Click here to review the newspaper article regarding his arrest.

Documents
LAST UPDATE: March 16, 2007