These facts were stipulated by the parties in the Pretrial Order. 2 The Pretrial Order contained 123 separately numbered stipulations of fact. The Court includes only those facts necessary to reach its decision herein. The stipulated facts have been renumbered and edited by the Court where necessary to provide clarity to the reader. All relevance objections by the Defendant regarding these stipulated facts are hereby overruled.
1. On January 7, 2011, George David Gordon, Jr. (“Defendant” or “Gordon”) filed a voluntary Chapter 7 petition, schedules, statement of financial affairs (“SOFA”), and other miscellaneous statements. Defendant signed his declarations under penalty of perjury in the petition, Declaration Concerning Debtor's Schedules, and the SOFA. Defendant indicated that his debts were primarily business debts. Defendant signed the documents over several days prior to the date of filing, and filed a statement verifying the documents were valid and there was no material change in circumstances that had occurred in the interim.
2. Defendant filed three amendments to his schedules and statements in this case on January 18, 2011, June 13, 2011, and December 1, 2011.
3. The U.S. Trustee (“Plaintiff”) appointed Patrick J. Malloy, III (“Trustee”) as the Chapter 7 trustee in Defendant's case. He continues to serve in that capacity.
4. The first meeting of creditors was held on February 16, 2011. Defendant appeared telephonically, testifying under oath that he signed the petition, schedules of assets and liabilities, and SOFA, and that he had reviewed them and they were true and correct at the time.
5. At the meeting of creditors, Defendant testified he had a couple of changes to make to his schedules and statements. The changes involved omitted or undervalued assets, accounts, and business interests.3
6. Defendant is presently incarcerated in a federal correctional facility in Texarkana,Texas. He was convicted of conspiracy to commit securities fraud, wire fraud, and money laundering by the United States District Court for the Northern District of Oklahoma (the “District Court”). His crime has been described as a “pump and dump” stock scheme (or series of schemes).4
7. Amy Gordon (“Mrs. Gordon”) is the Defendant's wife, and they lived together at all relevant times until his incarceration. At her request, the automatic stay provided by § 362 has been terminated for her to proceed with the dissolution of their marriage.
8. Defendant was formerly licensed as a CPA and an Oklahoma attorney. His undergraduate degree is from Baylor University. He received his Juris Doctorate degree in 1988 from the University of Tulsa.
9. Defendant was the sole owner of a professional corporation, namely: G. David Gordon & Associates, P.C. His company was incorporated to provide legal services.
10. In his deposition dated November 2, 2012, Defendant characterized his business as his law firm and his principal occupation as the practice of law. In addition, Defendant did some accounting work, approximately $600 a month that did not run through the law firm. He also did personal investing in companies.
11. In November 2001, Defendant filed a Complaint for Injunctive Relief in the District Court, Case No. 01–CV–0858C, against the United States Securities and Exchange Commission, seeking a temporary restraining order, preliminary injunction, and permanent injunction prohibiting the SEC from issuing and/or enforcing a subpoena duces tecum for the production of records by Bank of America relating to the G. David Gordon & Associates, P.C. Trust account. Defendant subsequently voluntarily dismissed the action.
12. In July 2007, Tim J. Tylicki, Special Agent for the Federal Bureau of Investigation, filed an Application and Affidavit for Search Warrant in the District Court, to search and seize records from the location where Defendant conducted business.
13. In January 2009, in United States v. George David Gordon, et al., 09–CR–13 GKF (“the Government Case”) filed in the District Court, Gordon was charged with conspiracy, wire fraud, aiding and abetting, securities fraud, money laundering, false statements, and obstruction of justice for manipulating share prices of “penny stock” companies by a “pump and dump” scheme through his corporation and other shell companies under his direction and control.
14. On May 3, 2010, after a jury trial in the Government Case, Defendant was convicted of nine counts of wire fraud, five counts of securities fraud, five counts of money laundering, a wire fraud scheme, and one count of obstruction of justice.
15. On October 29, 2010, Defendant was sentenced for his criminal conduct by The Honorable James H. Payne, District Judge for the District Court, who made, in part, the following findings:
a. Defendant was convicted of a conspiracy wherein the jury found that Defendant conspired and agreed with others to commit securities fraud and other crimes in the manipulation and sale of stock for Defendant's monetary gain.5
b. Defendant was responsible for an illegal gain caused by [the stock fraud scheme of 3 specific stocks] of $43,927,809.6
c. Defendant conceived and perpetrated a scheme to illegally convert [a specific stock's] shares to free-trading shares, then caused the sale of the stock resulting in the receipt of $2,714,504. The Defendant caused the transfer of $2,172,604 of the proceeds to his control enabling him to pay off his home mortgage.7
16. Defendant was incarcerated upon his conviction in May 2010. He has remained incarcerated since that time. His business office was closed in May 2010, and all records and assets of the law firm of G. David Gordon & Associates, P.C. and all personal business files of Defendant were moved under the direction of Mrs. Gordon and Susan Willis, Defendant's paralegal, from his place of business to the residence of Mrs. Gordon, as well as other locations.
17. On September 15, 2010, Judge Payne entered the following judgment for the United States in the Government Case: a money judgment against Gordon in the sum of $43,927,809.95; a criminal forfeiture money judgment of $2,747,761.81 representing a traceable wire fraud scheme; forfeiture to the United States of three financial accounts; and forfeiture of Gordon's interest in real property, commonly known as 10726 South Lakewood Avenue, Tulsa, Tulsa County, Oklahoma (the “Residence”) to the extent of $1,702,000 that was traceable to a wire fraud scheme, with the remainder of his interest in the Residence forfeited as a substitute asset.8
18. On January 11, 2011, a Second Order for Forfeiture of Certain Assets of Gordon was entered by Judge Payne forfeiting his interests in several corporations, brokerage trading accounts, and other real property.9
19. On February 16, 2011, Judge Payne entered a Final Order of Forfeiture of Real Property and Funds in Financial Accounts, forfeiting to the United States the entirety of the Residence, subject to a settlement regarding the interest of Mrs. Gordon.10
20. In February 2009, in Securities and Exchange Commission v. George David Gordon, et al., 09–CV–061–CVE (Civil) (the “SEC Case”) filed in the District Court, Gordon was alleged to have manipulated share prices of “penny stock” companies by a “pump and dump” scheme from the spring of 2005 through December 2006, and alleged to have derived illegal trading profits totaling in excess of $20 million.
21. In November 2011, a money judgment for disgorgement was awarded in the SEC Case in the amount of $40,072,806.97, representing profits from the sale of said penny stocks including interest of $10,307,489.92 from January 1, 2007 through December 31, 2010, with interest accruing at. 10 percent [sic] per annum. Defendant was also permanently barred from participating in an offering of any penny stock, including engaging in activities with a broker dealer, or issuer for purposes of issuing, trading, or inducing or attempting to induce the purchase or sale of any penny stock.
22. Defendant and Mrs. Gordon sold stock in 2000 that resulted in a capital gain for that year of almost $20,000,000 (the “2000 Capital Gain”). The Gordons' joint federal income tax returns show stock sales and gains or losses on stock sales as follows:
$Sales |
$Gain/Loss |
23. On September 6, 2010, Defendant executed a Durable Power of Attorney giving Mrs. Gordon certain powers to act on Defendant's behalf.
24. The Trustee...
