United States v. RaPower-3, LLC
| Decision Date | 14 September 2020 |
| Docket Number | Civil No. 2:15-cv-00828-DN |
| Parties | UNITED STATES OF AMERICA, Plaintiff, v. RAPOWER-3, LLC; INTERNATIONAL AUTOMATED SYSTEMS, INC.; LTB1, LLC; R. GREGORY SHEPARD; NELDON JOHNSON; and ROGER FREEBORN, Defendants. |
| Court | U.S. District Court — District of Utah |
I. OVERVIEW
Following a bench trial,1 Findings of Fact and Conclusions of Law2 and other orders3 were entered Wayne Klein was appointed as Receiver ("Receiver")4 and directed to determine the location of and recover all receivership property.5
After the Receiver investigated transfers of real properties and cash to Glenda Johnson and conducted forensic accounting to determine the sources of funds Glenda Johnson used to acquire those assets, he filed Receiver's Motion for Order Directing Turnover and Transfer of Real Properties Titled in the Name of Glenda Johnson and Funds in Accounts Controlled byGlenda Johnson ("Turnover Motion").6 The Turnover Motion seeks an order requiring Glenda Johnson7 to turn over to the Receiver 14 real properties titled in her name and $1.4 million in bank accounts she controls.8
Glenda Johnson opposed the Turnover Motion.9 The Receiver filed his reply, identifying the sources of evidence upon which his motion relied.10 Glenda Johnson moved to strike what she claimed was new evidence and argument in the Receiver's reply ("Motion to Strike").11 The Receiver filed a memorandum in opposition to the motion to strike.12 The Court issued an order inviting the Receiver to point the Court to material in the record authenticating certain documents identified by the Court,13 to which the Receiver responded.14 Glenda Johnson objected to the Receiver's submission authenticating exhibits ("Objection").15
After careful consideration of the evidence and submissions, the Court indicated that it would grant the Receiver's Turnover Motion, deny Glenda Johnson's Motion to Strike, and overrule Glenda Johnson's Objection.16 As requested, the Receiver prepared draft findings of fact and conclusions of law and a proposed order. The Receiver provided the draft findings offact and conclusions of law and a proposed order to counsel for Glenda Johnson for review and comment. Glenda Johnson objected to certain aspects of the draft decision and order ("Second Objection").17 After the deadline for review and comment passed, the Receiver submitted a final draft to the Court. The Receiver also responded to the Second Objection.18 After careful consideration of all evidence, submissions, and materials, these final Findings of Fact, Conclusions of Law, and Order are entered.
TABLE OF CONTENTS
I. OVERVIEW ............................................................................................................ 1
II. FINDINGS OF FACT .............................................................................................. 5
III. Conclusions of Law ............................................................................................... 27
IV. ORDER .................................................................................................................. 47
II. FINDINGS OF FACT
The following factual statements from the Receiver's Turnover Motion are not disputed.19
1. Glenda Johnson currently is the record owner of the 14 properties listed in the table below:
Location Size20 Tax No. CROCite21 Millard Co., UT 160.00 4805 ¶20a Millard Co., UT 640.00 4806-A ¶20b Millard Co., UT 320.00 4806-B ¶20c Millard Co., UT 3.46 DO-4568-1 ¶20j Millard Co., UT 0.58 DO-SS-136&137 ¶20k Millard Co., UT 600.00 HD-3511 ¶20l Millard Co., UT 40.00 HD-3511-1 ¶20m Millard Co., UT 67.50 HD-4606-2 ¶20o Millard Co., UT 5.00 HD-4606-2-1 ¶20p Millard Co., UT 80.00 HD-4648 ¶20s Millard Co., UT 360.00 MA-2662-B ¶20x Utah County, UT 5.25 55:718:0006 ¶20y Utah County, UT 0.03 51:468:0132 ¶20z Los Angeles, CA 2842:027:174 ¶20aa
2. Glenda Johnson is the wife of Receivership Defendant Neldon Johnson.22
3. Glenda Johnson was the primary bookkeeper for many of the Receivership Entities and had unfettered access to entity bank accounts and records. She was the primary signer of checks issued on behalf of RaPower, IAS, Cobblestone Centre, and others.23
4. Glenda Johnson frequently issued checks to herself—from Receivership Entities—that she deposited in her personal bank accounts.24
5. Glenda Johnson transferred $70,000.00 from the RaPower savings account at Zions Bank to the RaPower checking account at Zions Bank on December 14, 2011.25 On the same day, she wrote a $70,000.00 check from the RaPower checking account (check #195) to herself and deposited it into her personal checking account at Zions Bank.26 RaPower's QuickBooks records recorded this as a "Real Estate Purchase" expense.27
6. The same day, Glenda Johnson withdrew $69,776.68 from her personal checking account at Zions Bank.28 Glenda Johnson then purchased a cashier's check from Zions Bank in the amount of $69,776.68.29
7. Glenda Johnson's checkbook register for her personal bank account at Zions Bank includes a notation that on December 14, 2011, $69,776.68 was paid to "First American Title" for "land."30
8. The sale of this property closed on December 16, 2011, with Glenda Johnson as the buyer. After payment of closing costs and a $500.00 broker credit, the net paid for this property was $69,776.68.31 A graphic demonstrating these transfers follows.
RaPowerZions BankSavings #4610 RaPowerZions BankChecking #3111 Glenda JohnsonZions BankChecking #9087 Seller 12/14/11Internet Transfer$70,000.00 12/14/11Internet Transfer$70,000.00 12/14/11Check #195$70,000.00 12/14/11Deposit #9494548663$70,000.00 12/14/11Check #0 (PresumablyCashier's Check)$69,776.68 $69,776.68 $69,776.68
9. Title to this property was recorded in the name of Glenda Johnson on December 16, 2011.32
10. All funds used to purchase this property came from Receivership Entities and were not funds Glenda Johnson obtained from other sources. Glenda Johnson retained $223.32 of Receivership funds deposited into her personal bank account.
11. This property was identified in the CRO at paragraphs 20(l) and 20(m).
12. On January 16, 2012, the closing balance of Glenda Johnson's checking account at Zions Bank was...
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