SEC v. Geragos & Geragos; Mark Geragos; George Buehler; Laffer & Gottlieb; Martin Laffer; Barbara Gottlieb, et al., No. LR-18350, Northern District of California (Sept. 12, 2003) — Press Release
raw: Dennis Herula et al.
Dennis Herula et al., No. LR-18350 (Sept. 12, 2003)
The SEC filed civil contempt charges against Geragos & Geragos law firm and its attorneys Mark Geragos and George Buehler, and Laffer & Gottlieb accounting firm and its principals Martin Laffer and Barbara Gottlieb, for violating a court-ordered asset freeze by accepting $50,000 and $41,350 respectively in credit card payments from relief defendant Mary Lee Capalbo without court approval.
The SEC charged Geragos & Geragos and its attorneys Mark Geragos and George Buehler with civil contempt for accepting $50,000 in credit card payments from Mary Lee Capalbo for legal services after a May 2002 asset freeze was in effect and after being served with the order in July 2002. Similarly, Laffer & Gottlieb and its principals Martin Laffer and Barbara Gottlieb were charged for accepting $41,350 in credit card payments from Capalbo for accounting services in violation of the same freeze order and without seeking required court approval. Both firms were accused of knowingly circumventing judicial safeguards designed to preserve assets in the SEC’s fraud actions against Capalbo and Dennis Herula, who had already been subject to final judgments.
The SEC filed civil contempt charges on September 11, 2003, against the law firm Geragos & Geragos and its attorneys Mark Geragos and George Buehler, as well as the accounting firm Laffer & Gottlieb and its principals Martin Laffer and Barbara Gottlieb, for violating a court-ordered asset freeze in the SEC’s fraud case against Dennis Herula and Mary Lee Capalbo. The asset freeze, imposed by the Rhode Island federal court in May 2002 and served on the firms in July 2002, explicitly prohibited Capalbo and her representatives from transferring any of her assets, including payments to third-party service providers. Geragos & Geragos allegedly received $50,000 in credit card payments from Capalbo in October 2002 for legal services, while Laffer & Gottlieb received $41,350 in September and October 2002 for accounting services—both without seeking or obtaining prior court approval as mandated. The SEC alleged that the firms were fully aware of the freeze order and deliberately ignored its terms, undermining the integrity of the ongoing fraud proceedings. Herula and Capalbo had already been subject to final judgments by the time of these violations, with Herula judged in October 2002 and Capalbo in January 2003. The contempt charges sought sanctions for these deliberate violations, highlighting the SEC’s enforcement of asset preservation protocols even against professional service providers. This case underscored the legal obligation of third parties to comply with court-ordered freezes, regardless of their role or relationship to the defendants.
Extracted insights
- $50K $50,000 $10K–$100K
- $41K $41,350 $10K–$100K
- person civil contempt charges
- court rhode island district court
- agency Securities and Exchange Commission
- SEC Files Civil Contempt Charges
- SEC Announced it filed civil contempt charges on September 11, 2003
- SEC Alleged the Geragos firm solicited and accepted attorneys' fees in the amount of $50,000
- SEC Alleged the Geragos firm failed to adhere to procedures ordered by the court for the payment of attorneys' fees
- SEC Alleged the Laffer & Gottlieb firm solicited and accepted fees in the amount of $41,350
- SEC Alleged the Laffer & Gottlieb firm violated the May 2002 asset freeze order
- Rhode Island District Court Entered an asset freeze order in May 2002
Litigation Rel. No. 18350 / September 12, 2003 SEC Files Civil Contempt Charges Against Law Firm and Accounting Firm for Violation of Asset Freeze Order SEC v. Dennis Herula et al. (United States District Court for the District of Rhode Island, C.A. No. 02 154 ML) The Commission announced that it filed civil contempt charges on September 11, 2003, against the Los Angeles, California-based law firm of Geragos & Geragos and two of its attorneys (Mark Geragos and George Buehler), and the Los Angeles-based accounting firm of Laffer & Gottlieb and its two principals (Martin Laffer and Barbara Gottlieb) for their violations of an asset freeze order. That order was entered in May 2002 by a Rhode Island federal court in a Commission fraud action against Dennis S. Herula, Mary Lee Capalbo, and others. Herula is also a defendant and Capalbo is a relief defendant in a second Commission fraud action filed in July 2002 in the U.S. District Court for the Northern District of California. In its contempt application as to the Geragos law firm, the Commission alleged that, in connection with its representation of Herula and Capalbo in the Commission actions, the Geragos firm, through Mark Geragos and George Buehler, solicited and accepted attorneys' fees in the amount of $50,000 through credit card payments from Capalbo in October 2002. The contempt application alleged that those payments violated the asset freeze order entered by the Rhode Island District Court in May 2002 and served on the Geragos firm in July 2002 that prohibited Capalbo and her attorneys from transferring any of her funds. The Commission further alleged that the Geragos firm and the two individual attorneys also failed to adhere to procedures ordered by the court for the payment of attorneys' fees, which required court approval prior to the payment of such fees. In its contempt application as to the Laffer & Gottlieb accounting firm, the Commission alleged that, in connection with accounting services they provided to Herula and Capalbo in the Commission actions, the Laffer & Gottlieb firm, through Martin Laffer and Barbara Gottlieb, solicited and accepted fees in the amount of $41,350 through credit card payments from Capalbo in September and October 2002. The contempt application alleged that the payments to the Laffer & Gottlieb firm violated the May 2002 asset freeze order entered by the Rhode Island District Court against Capalbo. For further information, please see Litigation Release Numbers 18082 (April 10, 2003)[civil contempt charges filed against Herula and Capalbo]; 17957 (January 29, 2003)[final judgment against Capalbo]; 17800 (October 23, 2002)[final judgment against Herula]; and 17514 (May 13, 2002)[preliminary injunction and asset freeze].
Litigation Rel. No. 18350 / September 12, 2003 SEC Files Civil Contempt Charges Against Law Firm and Accounting Firm for Violation of Asset Freeze Order SEC v. Dennis Herula et al. (United States District Court for the District of Rhode Island, C.A. No. 02 154 ML) The Commission announced that it filed civil contempt charges on September 11, 2003, against the Los Angeles, California-based law firm of Geragos & Geragos and two of its attorneys (Mark Geragos and George Buehler), and the Los Angeles-based accounting firm of Laffer & Gottlieb and its two principals (Martin Laffer and Barbara Gottlieb) for their violations of an asset freeze order. That order was entered in May 2002 by a Rhode Island federal court in a Commission fraud action against Dennis S. Herula, Mary Lee Capalbo, and others. Herula is also a defendant and Capalbo is a relief defendant in a second Commission fraud action filed in July 2002 in the U.S. District Court for the Northern District of California. In its contempt application as to the Geragos law firm, the Commission alleged that, in connection with its representation of Herula and Capalbo in the Commission actions, the Geragos firm, through Mark Geragos and George Buehler, solicited and accepted attorneys' fees in the amount of $50,000 through credit card payments from Capalbo in October 2002. The contempt application alleged that those payments violated the asset freeze order entered by the Rhode Island District Court in May 2002 and served on the Geragos firm in July 2002 that prohibited Capalbo and her attorneys from transferring any of her funds. The Commission further alleged that the Geragos firm and the two individual attorneys also failed to adhere to procedures ordered by the court for the payment of attorneys' fees, which required court approval prior to the payment of such fees. In its contempt application as to the Laffer & Gottlieb accounting firm, the Commission alleged that, in connection with accounting services they provided to Herula and Capalbo in the Commission actions, the Laffer & Gottlieb firm, through Martin Laffer and Barbara Gottlieb, solicited and accepted fees in the amount of $41,350 through credit card payments from Capalbo in September and October 2002. The contempt application alleged that the payments to the Laffer & Gottlieb firm violated the May 2002 asset freeze order entered by the Rhode Island District Court against Capalbo. For further information, please see Litigation Release Numbers 18082 (April 10, 2003)[civil contempt charges filed against Herula and Capalbo]; 17957 (January 29, 2003)[final judgment against Capalbo]; 17800 (October 23, 2002)[final judgment against Herula]; and 17514 (May 13, 2002)[preliminary injunction and asset freeze].