Preview
I
DALLAS COUNTY
11/17/2017 2:38 PM
FELICIA PITRE
DISTRICT CLERK
CAUSE NO. DC-17-15265
CALDWELL AND PARTNERS, INC., as INTHE DISTRICT COURT
sponsors of and on behalf of the Caldwell
and Partners
Inc. 401k Plan, ET AL.,
Plaintiffs, 116" JUDICIAL DISTRICT
v.
VANTAGE BENEFITS
ADMINISTRATORS, INC., JEFFREY A.
RICHIE, RSM US LLP,
DALLAS COUNTY, TEXAS
Defendants.
PLAINTIFF’S MOTION TO EXTEND TEMPORARY RESTRAINING ORDER AND
CONTINUE HEARING ON TEMPORARY INJUNCTION
TO THE HONORABLE JUDGE OF SAID COURT:
COME NOW, Caldwell and Partners Inc., (“CPI” or “Plaintiff’), as sponsor of and on
behalf of the Caldwell and Partners, Inc. 401k Plan (the “Plan”) files this Motion to Extend
Temporary Restraining Order and Continue Hearing On Temporary Injunction (“Motion”), and
in support thereof, shows the Court as follows:
I
INTRODUCTION
On November 7, 2017, the Court granted Plaintiffs application for temporary restraining
order, issuing the order and setting the hearing (the “Hearing”) on Plaintiffs Application for
Temporary Injunction and A pplication for Attachment on November 21, 2017 at 9:00 AM. Since
then, after being informed of various facts, along with certain agreements with Defendants,
Plaintiff files this Motion, seeking a brief extension of the aforementioned Temporary
Restraining Order (“TRO”) and a one-week continuance of the Hearing for the following
reasons: (1) Defendant Richie evaded service and was served late, after forcing Plaintiff to use
PLAINTIFF’S MOTION TO EXTEND TEMPORARY RESTRAINING ORDER AND CONTINUE HEARING ON
TEMPORARY INJUNCTION PAGEL
the constable to serve him, (2) counsel for Defendant Richie, Mr. Peter Barrett, contacted
Plaintiff's counsel, informing them that his engagement with Defendant Richie is expressly
limited to representation in a criminal capacity, and that Defendant Richie remains in the process
of procuring civil counsel for representation with respect to this matter, (3) Plaintiff and
Defendants have agreed to hold the deposition of Defendant Richie at the time currently
scheduled by the Court for the Hearing, and (4) Plaintiff has yet to receive complete responses to
the expedited discovery ordered by the Court, the receipt of which is necessary to Plaintiff's
effective preparation for the Hearing.
IL
FACTUAL BACKGROUND
The Plan is a 401k retirement savings plan for the benefit of employees of CPI and
affiliated companies including Midlands Management of Texas, Inc. (collectively, the
“employees”). As sponsor of the Plan, CPI retained Vantage Benefits Administrators, Inc.
(“Vantage”) to administer the Plan.
As the Plan’s administrator, Vantage provided statements to the employees and CPI,
conceming each employee’s transaction history and the amount of the Plan’s assets. For
example, when an employee requested and obtained a distribution under the Plan, Vantage
would issue a statement reflecting that distribution as a debit to the employee’s individual
account.
At all relevant times, Jeffrey A. Richie (“Richie”) was the president and chief executive
of Vantage and exercised direct and indirect control over all actions complained of herein. Richie
was previously a registered broker until barred from the financial services industry, following an
action for securities fraud by the United States Securities and Exchange Commission in 2008.
PLAINTIFF’S MOTION TO EXTEND TEMPORARY RESTRAINING ORDER AND CONTINUE HEARING ON
TEMPORARY INJUNCTION PAGE2
CPI retained RSM US, LLP (“RSM”) to audit the financial condition of the Plan and
report to CPI on a regular basis. RSM’s audit reports covered the years 2014 — 2016 and served
as a critical means for CPI to monitor Vantage’s administration of the Plan.
The Account Statements and Auditor Reports were False.
Following alarming news of the FBI’s raid of Vantage, CPI took emergency measures to
investigate Vantage’s actions as administrator of the Plan, including lookin into the veracity of
Vantage’s account statements and the auditor reports. Remarkably, each of the same falsely
represented the true status of the Plan’s assets to fraudulently obscure the fact that Vantage
was stealing substantial sums of money from the Plan. For example, Vantage caused RSM to
report that the Plan had $10.4 million of assets, as of Dec. 31, 2016, in a report dated, Oct. 13,
2017. This report was made by RSM, and CPI relied on it to monitor
V antage’s administration of
the Plan. However, CPI has now discovered the unfortunate truth that the Plan only contained
$3.960 million, which is over $6.6 million less than the amount that Vantage and RSM
represented to CPI.
As of Dec. 31, 2016, Vantage had already stolen millions of dollars from the Plan, and it
did not stop in 2017. As of Oct. 27, 2017, Vantage fraudulently reduced the Plan to a mere $2.4
million, an amount roughly $8 million less than represented just two weeks prior in the report
dated Oct. 13, 2017.
Absent CPI’s discovery, and this Court’s intervention, it is likely that Vantage and Richie
will continue to perpetrate their above-referenced theft of the Plans assets, making every attempt
to cover their tracks along the way. Vantage and Richie’s history demonstrates its fraudulent
scheme:
PLAINTIFF’S MOTION TO EXTEND TEMPORARY RESTRAINING ORDER AND CONTINUE HEARING ON
TEMPORARY INJUNCTION PAGE 3
Reported Pian Value Actual Plan Value
$10,353,592 $9,870,364
2014 $10,568,864 $9,044,169
$10,596,133 $6,264,268
2016 $10,405,341 $3,960,025
2017 N/A $2,406,654
Vantage and Richie transferred the Plan’s assets out of the Plan’s custody without
consent, approval, or authority on multiple occasions. While this matter is still only freshly
discovered, CPI has already identified multiple instances of theft. Many of which were
perpetrated in the name of former Plan participants.
By way of example, Vantage transferred over $800,000.00 of assets from the Plan’s
custody during 2015 and 2016 for the purported benefit of a particular employee (“Employee
A”). However, as Vantage itself knew and reported via prior account statements, Employee A’s
individual account contained an amount less than $40,000.00 during that time. What is more, in
late-2014, Employee A resigned from her employment, and withdrew the entire balance of her
account. Nonetheless, Vantage subsequently transferred roughly $433,000.00 in 2015 and
$379,000.00 in 2016, falsely representing that the funds were a distribution for Employee A.
Vantage and Richie knew Employee A was not a plan participant at the time, as evidenced by
their failure to provide account statements for Employee A, thereby concealing these transfers
from CPI.
On multiple occasions, Vantage and Richie also concealed the funds they stole by issuing
patently false, individual account statements. As another example, Vantage transferred
$340,542.71 out of the Plan’s custody in 2015 and 2016 purportedly for the benefit of another
PLAINTIFF’S MOTION TO EXTEND TEMPORARY RESTRAINING ORDER AND CONTINUE HEARING ON
TEMPORARY INJUNCTION PAGE 4
employee (“Employee B”). Despite this, Vantage falsely represented, by way of its account
statements, that it had only debited the Plan in the amount of $1,196.44 on behalf of Employee B
for the same period. As such, Vantage fraudulently represented to CPI that it only debited
roughly $1,200.00 for Employee B when in truth, Vantage and Richie actually transferred over
$340,000.00 for the purported benefit of Employee B. Vantage’s fraudulent concealment of this
fact demonstrates the wrongfulness of the transfers and an implicit acknowledgment of their own
guilt.
Vantage and Richie employed similar tactics on multiple occasions. As yet another
example, during the same time period referenced in the previous example above, Vantage
transferred $107,391.89 from the Plan’s custody for the purported benefit of another employee
(“Employee C”). This time, Vantage did not even issue an account statement for Employee C, as
Employee C was not a participant in the Plan at the time. Vantage’s failure to provide an account
statement for Employee C demonstrates that Vantage and Richie knew Employee C was not a
participant in the Plan. In all probability, this may be Vantage and Richie’s intent in choosing
Employee C as the ruse to steal from the Plan.
On other occasions, in 2015 and 2016, Vantage and Richie transferred roughly $310,000
purportedly for the benefit of another employee (“Employee D”), despite falsely representing to
CPI a debit in the amount of $12.13 on behalf of Employee D for the period. What is more,
Employee D was also not even a Plan participant in 2016, with a prior account balance of
roughly $12.00. As with the other employees referenced above, Vantage and Richie knew these
facts, and selected Employee D as another ruse to steal from the Plan.
As a fifth summary example, Vantage and Richie transferred a total of $649,262.33 via
multiple transfers in 2015 and 2016 purportedly on behalf of “Employee E.” Vantage falsely
PLAINTIFF’S MOTION TO EXTEND TEMPORARY RESTRAINING ORDER AND CONTINUE HEARING ON
TEMPORARY INJUNCTION PAGES
reported, via account statements, that it debited only $135,026.40 to the Plan for the benefit of
Employee E in 2015, and did not even provide account statements for Employee E in 2016.
To be clear, these are just a few examples of Vantage and Richie’s multiple instances of
theft. These examples are not necessarily the most egregious instances. Nonetheless, a review of
just these five examples demonstrates the egregious nature of Vantage and Richie’s repeated
theft and fraud:
Debits Reported for Actual Transfers in Difference
2015-2016 2015-2016
Employee A $0 $812,172.67 $812,172.67
Employee B $1,196.44 $340,542.71 $339,346.27
Employee C $0 $107,391.89 $107,391.89
Employee D $12.13 $309,835.37 $309,823.24
Employee E $135,026.40 $649,262.33 $514,235.93
Totals: $136,234.97 §2,219,20497 §2,082,970.00
Vantage also charged the Plan fees for each theft and fraudulent transfer that it
perpetrated. Additionally, Vantage paid fees to third parties for the fraudulent transfers with Plan
assets. Due to the depth and nature of these egregious acts, CPI requires discovery to obtain
records in the possession of third parties in order to fully investigate Vantage’s theft.
In total, Vantage and Richie have stolen millions of dollars from the Plan and obscured
this theft via false account statements and reports. What is more, the true extent of Vantage and
Richie’s misconduct is still not fully known due to their false and fraudulent misrepresentations
and conduct.
PLAINTIFF’S MOTION TO EXTEND TEMPORARY RESTRAINING ORDER AND CONTINUE HEARING ON
TEMPORARY INJUNCTION PAGE 6
TI.
RELEVANT PROCEDURAL BACKGROUND
On November 7, 2017, the Court granted Plaintiffs application for temporary restraining
order, issuing the TRO (attached hereto as Exhibit A, and incorporated herein by reference) and
setting the hearing on Plaintiff's Application for Temporary Injunction and Application for
Attachment on November 21, 2017 at 9:00 AM. Additionally, on November 7, the Court also
granted Plaintiffs Motion for Emergency Discovery (expedited). Since then, after being
informed of various facts, along with certain agreements with Defendants, Plaintiff files this
Motion, seeking a brief extension of the aforementioned TRO and continuance of the Hearing for
the following reasons: (1) Defendant Richie evaded service and was served late, after forcing
Plaintiff to use the constable to serve him, (2) counsel for Defendant Richie, Mr. Peter Barrett,
contacted Plaintiffs counsel, informing them that his engagement with Defendant Richie was
expressly limited to representation in a criminal capacity, and that Defendant Richie remains in
the process of procuring civil counsel for representation with respect to this matter, (3) Plaintiff
and Defendants have agreed to hold the deposition of Defendant Richie at the time currently
scheduled by the Court for the Hearing, and (4) Plaintiff has yet to receive complete responses to
the expedited discovery ordered by the Court, the receipt of which is necessary to Plaintiffs
effective preparation for the Hearing.
IV.
MOTION
Every temporary restraining order:
shall expire by its terms within such time after signing, not to exceed fourteen
days, as the court fixes, unless within the time so fixed the order, for good cause
shown, is extended for a like period or unless the party against whom the order is
directed consents that it may be extended for a longer period.
Tex. R. Civ. P. 680 (emphasis added).
PLAINTIFF’S MOTION TO EXTEND TEMPORARY RESTRAINING ORDER AND CONTINUE HEARING ON
TEMPORARY INJUNCTION PAGE7
The Court has discretion to extend the TRO upon a showing of “good cause.” See Tex. R.
Civ. P. 680. Here, the Court issued the TRO on November 7, 2017, at 9:07 AM. See Exhibit A.
Defendant Richie evaded service and was served late, after forcing Plaintiff to use the constable
to serve him. Additionally, counsel for Defendant Richie, Mr. Peter Barrett, contacted Plaintiff’s
counsel, informing them that his engagement with Defendant Richie was expressly limited to
representation in a criminal capacity, and that Defendant Richie remains in the process of
procuring civil counsel for representation with respect to this matter. Further, due to scheduling
conflicts, Plaintiff and Defendants were only able to agree on the time currently set by the Court
for the Hearing to conduct Defendant Richie’s deposition. Lastly, Plaintiff has yet to receive
complete responses to the emergency discovery requests (expedited), ordered by the Court, that
it propounded upon Defendants. Full and complete responses to such discovery are necessary to
Plaintiff's effective preparation for the Hearing. Based on all of the foregoing reasons, Plaintiff
respectfully requests that the Court find that good cause has been shown to extend the TRO and
order a brief, one-week continuance of the Hearing.
PRAYER
WHEREFORE, PREMISES CONSIDERED, Plaintiff respectfully requests the Court to
extend Plaintiff's Temporary Restraining Order against Defendants and order a brief, one-week
extension of the hearing on Plaintiffs Application for Temporary Injunction and Application for
Attachment.
PLAINTIFF’S MOTION TO EXTEND TEMPORARY RESTRAINING ORDER AND CONTINUE HEARING ON
TEMPORARY INJUNCTION PAGES
Respectfully submitted,
MCCATHERN, P.L.L.C.
By: (s/ Shane Eghbal
Amold Shokoui
State Bar No. 24056315
ammolds@ mccathemlaw.com
Justin N. Bryan
State Bar No. 24072006
jbryan@ mccathermnlaw.com
Shane Eghbal
State Bar No. 24101723
seghbal@ mccathemlaw.com
Regency Plaza
3710 Rawlins, Suite 1600
Dallas, Texas 75219
Telephone: 214.741.2662
Facsimile: 214.741.4717
ATTORNEYS FOR PLAINTIFF
CERTIFICATE OF SERVICE
The undersigned hereby certifies that on November 17, 2017 electronically by the
Court’s electronic system upon the parties listed below.
Vantage Benefits Administrators, Inc.
via email to Jeffery A. Richie at jrichie@ vantagebenefits.com
Jeffery A. Richie
via email to jrichie@ vantagebenefits.com
/s/ Arnold Shokouhi
Arnold Shokouhi
PLAINTIFF’S MOTION TO EXTEND TEMPORARY RESTRAINING ORDER AND CONTINUE HEARING ON
TEMPORARY INJUNCTION PAGE9
EXHIBIT A
DC-17-15265
CAUSE NO.
CALDWELL AND PARTNERS, INC., § IN THE DISTRICT COURT OF
as sponsors of and on behalf of the Caldwell
and Partners Inc. 401k Plan, ET AL.,
Plaintiff,
Vv, DALLAS COUNTY, TEXAS
VANTAGE BENEFITS ADMINISTRATORS, §
INC., JEFFREY A. RICHIE, RSM US LLP, §
§
Defendants. § (et* rupicrar pisteict
TEMPORARY RESTRAINING ORDER
-
This Court, having heard Plaintiff Caldwell and Pariners, Inc.*s (“CPI”) Application for
Temporary Restraining Order (“Application”), and all evidence and arguments of counsel, is of
Ahe Gourk held The hess
4 Btunse
the opinion thi the same should in all things be GRANTED.
eX parle fnough dul hoticed, kee Oetordanrts foiled to ogpear
The Court finds that the specific facts set forth hy the Affidavit of Dennis J. Ottis,
attached to CPI’s Application, show that immediate and irreparable injury, loss, or damage will
result ta CPI, before notice can be formally served and « hearing had thereon. The Court notes
CPI has attempted to provide informal notice to Vantage Benefits Administrators, Inc. and
Jeffery A. Richie via email, but issues this Temporary Restraining Order (“Order”) even if no
actual notice was effected because the specific facts set forth by the Affidavit of Dennis J. Ottis
demonstrate immediate and irreparable injury, loss, or damage will result to CPI.
The Court finds thisOrder necessary to preserve the status quo and prevent further
transfer of assets or funds which comprise the subject matter of CPI’s claims against Vantage
Benefits Administrators, Inc. and Jefftey A. Richie. Such further transfer would comprise an
irreparable injury because it would have the effect of precluding a just recovery for CPI on its
claims for the retwm of allegedly stolen assets or funds.
The Court ORDERS that no person subject to Tex. R. Civ, P. 683 sball, directly or
indirectly, transfer or cause to be transferred any asset or funds from the possession, control, or
custody of either Vantage Benefits Administrators, Inc, or Jeffrey A, Richie, absent approval of
this Court on notice to CPI or CPI’s written consent. Provided however, this Order shall not
preclude Jeffrey A. Richie from using fumds for the reasonable purchase of his own his
dependants’ living necessities. Examples of such necessities shall include without limitation
reasonable expenses for food, clothing, and shelter, Jeffery A. Richie shall keep strict records of
all such expenses incurred during the effect of thisOrder.
‘This Order is issued at_ 1:5 Tam (time) on Ney umber "1, 2etT _ Gate)
and shal] be filed with the clerk's office forthwith and entered of record.
Absent further order of this Court, this Order shall expire fourteen days from its issuance.
The Cowt further ORDERS that a hearing on CPY’s Application for Temporary
Injunction and Applications for Attachment will be held on Ndvconloer aon.
at FD am.
The Court further ORDERS that CPI shall post a bond in the seamount of
—_——
F\ 0007
- —.
~
22
LEenPRESIDING JUDGE
c
ee
Preview
I DALLAS COUNTY 11/17/2017 2:38 PM FELICIA PITRE DISTRICT CLERK CAUSE NO. DC-17-15265 CALDWELL AND PARTNERS, INC., as INTHE DISTRICT COURT sponsors of and on behalf of the Caldwell and Partners Inc. 401k Plan, ET AL., Plaintiffs, 116" JUDICIAL DISTRICT v. VANTAGE BENEFITS ADMINISTRATORS, INC., JEFFREY A. RICHIE, RSM US LLP, DALLAS COUNTY, TEXAS Defendants. PLAINTIFF’S MOTION TO EXTEND TEMPORARY RESTRAINING ORDER AND CONTINUE HEARING ON TEMPORARY INJUNCTION TO THE HONORABLE JUDGE OF SAID COURT: COME NOW, Caldwell and Partners Inc., (“CPI” or “Plaintiff’), as sponsor of and on behalf of the Caldwell and Partners, Inc. 401k Plan (the “Plan”) files this Motion to Extend Temporary Restraining Order and Continue Hearing On Temporary Injunction (“Motion”), and in support thereof, shows the Court as follows: I INTRODUCTION On November 7, 2017, the Court granted Plaintiffs application for temporary restraining order, issuing the order and setting the hearing (the “Hearing”) on Plaintiffs Application for Temporary Injunction and A pplication for Attachment on November 21, 2017 at 9:00 AM. Since then, after being informed of various facts, along with certain agreements with Defendants, Plaintiff files this Motion, seeking a brief extension of the aforementioned Temporary Restraining Order (“TRO”) and a one-week continuance of the Hearing for the following reasons: (1) Defendant Richie evaded service and was served late, after forcing Plaintiff to use PLAINTIFF’S MOTION TO EXTEND TEMPORARY RESTRAINING ORDER AND CONTINUE HEARING ON TEMPORARY INJUNCTION PAGEL the constable to serve him, (2) counsel for Defendant Richie, Mr. Peter Barrett, contacted Plaintiff's counsel, informing them that his engagement with Defendant Richie is expressly limited to representation in a criminal capacity, and that Defendant Richie remains in the process of procuring civil counsel for representation with respect to this matter, (3) Plaintiff and Defendants have agreed to hold the deposition of Defendant Richie at the time currently scheduled by the Court for the Hearing, and (4) Plaintiff has yet to receive complete responses to the expedited discovery ordered by the Court, the receipt of which is necessary to Plaintiff's effective preparation for the Hearing. IL FACTUAL BACKGROUND The Plan is a 401k retirement savings plan for the benefit of employees of CPI and affiliated companies including Midlands Management of Texas, Inc. (collectively, the “employees”). As sponsor of the Plan, CPI retained Vantage Benefits Administrators, Inc. (“Vantage”) to administer the Plan. As the Plan’s administrator, Vantage provided statements to the employees and CPI, conceming each employee’s transaction history and the amount of the Plan’s assets. For example, when an employee requested and obtained a distribution under the Plan, Vantage would issue a statement reflecting that distribution as a debit to the employee’s individual account. At all relevant times, Jeffrey A. Richie (“Richie”) was the president and chief executive of Vantage and exercised direct and indirect control over all actions complained of herein. Richie was previously a registered broker until barred from the financial services industry, following an action for securities fraud by the United States Securities and Exchange Commission in 2008. PLAINTIFF’S MOTION TO EXTEND TEMPORARY RESTRAINING ORDER AND CONTINUE HEARING ON TEMPORARY INJUNCTION PAGE2 CPI retained RSM US, LLP (“RSM”) to audit the financial condition of the Plan and report to CPI on a regular basis. RSM’s audit reports covered the years 2014 — 2016 and served as a critical means for CPI to monitor Vantage’s administration of the Plan. The Account Statements and Auditor Reports were False. Following alarming news of the FBI’s raid of Vantage, CPI took emergency measures to investigate Vantage’s actions as administrator of the Plan, including lookin into the veracity of Vantage’s account statements and the auditor reports. Remarkably, each of the same falsely represented the true status of the Plan’s assets to fraudulently obscure the fact that Vantage was stealing substantial sums of money from the Plan. For example, Vantage caused RSM to report that the Plan had $10.4 million of assets, as of Dec. 31, 2016, in a report dated, Oct. 13, 2017. This report was made by RSM, and CPI relied on it to monitor V antage’s administration of the Plan. However, CPI has now discovered the unfortunate truth that the Plan only contained $3.960 million, which is over $6.6 million less than the amount that Vantage and RSM represented to CPI. As of Dec. 31, 2016, Vantage had already stolen millions of dollars from the Plan, and it did not stop in 2017. As of Oct. 27, 2017, Vantage fraudulently reduced the Plan to a mere $2.4 million, an amount roughly $8 million less than represented just two weeks prior in the report dated Oct. 13, 2017. Absent CPI’s discovery, and this Court’s intervention, it is likely that Vantage and Richie will continue to perpetrate their above-referenced theft of the Plans assets, making every attempt to cover their tracks along the way. Vantage and Richie’s history demonstrates its fraudulent scheme: PLAINTIFF’S MOTION TO EXTEND TEMPORARY RESTRAINING ORDER AND CONTINUE HEARING ON TEMPORARY INJUNCTION PAGE 3 Reported Pian Value Actual Plan Value $10,353,592 $9,870,364 2014 $10,568,864 $9,044,169 $10,596,133 $6,264,268 2016 $10,405,341 $3,960,025 2017 N/A $2,406,654 Vantage and Richie transferred the Plan’s assets out of the Plan’s custody without consent, approval, or authority on multiple occasions. While this matter is still only freshly discovered, CPI has already identified multiple instances of theft. Many of which were perpetrated in the name of former Plan participants. By way of example, Vantage transferred over $800,000.00 of assets from the Plan’s custody during 2015 and 2016 for the purported benefit of a particular employee (“Employee A”). However, as Vantage itself knew and reported via prior account statements, Employee A’s individual account contained an amount less than $40,000.00 during that time. What is more, in late-2014, Employee A resigned from her employment, and withdrew the entire balance of her account. Nonetheless, Vantage subsequently transferred roughly $433,000.00 in 2015 and $379,000.00 in 2016, falsely representing that the funds were a distribution for Employee A. Vantage and Richie knew Employee A was not a plan participant at the time, as evidenced by their failure to provide account statements for Employee A, thereby concealing these transfers from CPI. On multiple occasions, Vantage and Richie also concealed the funds they stole by issuing patently false, individual account statements. As another example, Vantage transferred $340,542.71 out of the Plan’s custody in 2015 and 2016 purportedly for the benefit of another PLAINTIFF’S MOTION TO EXTEND TEMPORARY RESTRAINING ORDER AND CONTINUE HEARING ON TEMPORARY INJUNCTION PAGE 4 employee (“Employee B”). Despite this, Vantage falsely represented, by way of its account statements, that it had only debited the Plan in the amount of $1,196.44 on behalf of Employee B for the same period. As such, Vantage fraudulently represented to CPI that it only debited roughly $1,200.00 for Employee B when in truth, Vantage and Richie actually transferred over $340,000.00 for the purported benefit of Employee B. Vantage’s fraudulent concealment of this fact demonstrates the wrongfulness of the transfers and an implicit acknowledgment of their own guilt. Vantage and Richie employed similar tactics on multiple occasions. As yet another example, during the same time period referenced in the previous example above, Vantage transferred $107,391.89 from the Plan’s custody for the purported benefit of another employee (“Employee C”). This time, Vantage did not even issue an account statement for Employee C, as Employee C was not a participant in the Plan at the time. Vantage’s failure to provide an account statement for Employee C demonstrates that Vantage and Richie knew Employee C was not a participant in the Plan. In all probability, this may be Vantage and Richie’s intent in choosing Employee C as the ruse to steal from the Plan. On other occasions, in 2015 and 2016, Vantage and Richie transferred roughly $310,000 purportedly for the benefit of another employee (“Employee D”), despite falsely representing to CPI a debit in the amount of $12.13 on behalf of Employee D for the period. What is more, Employee D was also not even a Plan participant in 2016, with a prior account balance of roughly $12.00. As with the other employees referenced above, Vantage and Richie knew these facts, and selected Employee D as another ruse to steal from the Plan. As a fifth summary example, Vantage and Richie transferred a total of $649,262.33 via multiple transfers in 2015 and 2016 purportedly on behalf of “Employee E.” Vantage falsely PLAINTIFF’S MOTION TO EXTEND TEMPORARY RESTRAINING ORDER AND CONTINUE HEARING ON TEMPORARY INJUNCTION PAGES reported, via account statements, that it debited only $135,026.40 to the Plan for the benefit of Employee E in 2015, and did not even provide account statements for Employee E in 2016. To be clear, these are just a few examples of Vantage and Richie’s multiple instances of theft. These examples are not necessarily the most egregious instances. Nonetheless, a review of just these five examples demonstrates the egregious nature of Vantage and Richie’s repeated theft and fraud: Debits Reported for Actual Transfers in Difference 2015-2016 2015-2016 Employee A $0 $812,172.67 $812,172.67 Employee B $1,196.44 $340,542.71 $339,346.27 Employee C $0 $107,391.89 $107,391.89 Employee D $12.13 $309,835.37 $309,823.24 Employee E $135,026.40 $649,262.33 $514,235.93 Totals: $136,234.97 §2,219,20497 §2,082,970.00 Vantage also charged the Plan fees for each theft and fraudulent transfer that it perpetrated. Additionally, Vantage paid fees to third parties for the fraudulent transfers with Plan assets. Due to the depth and nature of these egregious acts, CPI requires discovery to obtain records in the possession of third parties in order to fully investigate Vantage’s theft. In total, Vantage and Richie have stolen millions of dollars from the Plan and obscured this theft via false account statements and reports. What is more, the true extent of Vantage and Richie’s misconduct is still not fully known due to their false and fraudulent misrepresentations and conduct. PLAINTIFF’S MOTION TO EXTEND TEMPORARY RESTRAINING ORDER AND CONTINUE HEARING ON TEMPORARY INJUNCTION PAGE 6 TI. RELEVANT PROCEDURAL BACKGROUND On November 7, 2017, the Court granted Plaintiffs application for temporary restraining order, issuing the TRO (attached hereto as Exhibit A, and incorporated herein by reference) and setting the hearing on Plaintiff's Application for Temporary Injunction and Application for Attachment on November 21, 2017 at 9:00 AM. Additionally, on November 7, the Court also granted Plaintiffs Motion for Emergency Discovery (expedited). Since then, after being informed of various facts, along with certain agreements with Defendants, Plaintiff files this Motion, seeking a brief extension of the aforementioned TRO and continuance of the Hearing for the following reasons: (1) Defendant Richie evaded service and was served late, after forcing Plaintiff to use the constable to serve him, (2) counsel for Defendant Richie, Mr. Peter Barrett, contacted Plaintiffs counsel, informing them that his engagement with Defendant Richie was expressly limited to representation in a criminal capacity, and that Defendant Richie remains in the process of procuring civil counsel for representation with respect to this matter, (3) Plaintiff and Defendants have agreed to hold the deposition of Defendant Richie at the time currently scheduled by the Court for the Hearing, and (4) Plaintiff has yet to receive complete responses to the expedited discovery ordered by the Court, the receipt of which is necessary to Plaintiffs effective preparation for the Hearing. IV. MOTION Every temporary restraining order: shall expire by its terms within such time after signing, not to exceed fourteen days, as the court fixes, unless within the time so fixed the order, for good cause shown, is extended for a like period or unless the party against whom the order is directed consents that it may be extended for a longer period. Tex. R. Civ. P. 680 (emphasis added). PLAINTIFF’S MOTION TO EXTEND TEMPORARY RESTRAINING ORDER AND CONTINUE HEARING ON TEMPORARY INJUNCTION PAGE7 The Court has discretion to extend the TRO upon a showing of “good cause.” See Tex. R. Civ. P. 680. Here, the Court issued the TRO on November 7, 2017, at 9:07 AM. See Exhibit A. Defendant Richie evaded service and was served late, after forcing Plaintiff to use the constable to serve him. Additionally, counsel for Defendant Richie, Mr. Peter Barrett, contacted Plaintiff’s counsel, informing them that his engagement with Defendant Richie was expressly limited to representation in a criminal capacity, and that Defendant Richie remains in the process of procuring civil counsel for representation with respect to this matter. Further, due to scheduling conflicts, Plaintiff and Defendants were only able to agree on the time currently set by the Court for the Hearing to conduct Defendant Richie’s deposition. Lastly, Plaintiff has yet to receive complete responses to the emergency discovery requests (expedited), ordered by the Court, that it propounded upon Defendants. Full and complete responses to such discovery are necessary to Plaintiff's effective preparation for the Hearing. Based on all of the foregoing reasons, Plaintiff respectfully requests that the Court find that good cause has been shown to extend the TRO and order a brief, one-week continuance of the Hearing. PRAYER WHEREFORE, PREMISES CONSIDERED, Plaintiff respectfully requests the Court to extend Plaintiff's Temporary Restraining Order against Defendants and order a brief, one-week extension of the hearing on Plaintiffs Application for Temporary Injunction and Application for Attachment. PLAINTIFF’S MOTION TO EXTEND TEMPORARY RESTRAINING ORDER AND CONTINUE HEARING ON TEMPORARY INJUNCTION PAGES Respectfully submitted, MCCATHERN, P.L.L.C. By: (s/ Shane Eghbal Amold Shokoui State Bar No. 24056315 ammolds@ mccathemlaw.com Justin N. Bryan State Bar No. 24072006 jbryan@ mccathermnlaw.com Shane Eghbal State Bar No. 24101723 seghbal@ mccathemlaw.com Regency Plaza 3710 Rawlins, Suite 1600 Dallas, Texas 75219 Telephone: 214.741.2662 Facsimile: 214.741.4717 ATTORNEYS FOR PLAINTIFF CERTIFICATE OF SERVICE The undersigned hereby certifies that on November 17, 2017 electronically by the Court’s electronic system upon the parties listed below. Vantage Benefits Administrators, Inc. via email to Jeffery A. Richie at jrichie@ vantagebenefits.com Jeffery A. Richie via email to jrichie@ vantagebenefits.com /s/ Arnold Shokouhi Arnold Shokouhi PLAINTIFF’S MOTION TO EXTEND TEMPORARY RESTRAINING ORDER AND CONTINUE HEARING ON TEMPORARY INJUNCTION PAGE9 EXHIBIT A DC-17-15265 CAUSE NO. CALDWELL AND PARTNERS, INC., § IN THE DISTRICT COURT OF as sponsors of and on behalf of the Caldwell and Partners Inc. 401k Plan, ET AL., Plaintiff, Vv, DALLAS COUNTY, TEXAS VANTAGE BENEFITS ADMINISTRATORS, § INC., JEFFREY A. RICHIE, RSM US LLP, § § Defendants. § (et* rupicrar pisteict TEMPORARY RESTRAINING ORDER - This Court, having heard Plaintiff Caldwell and Pariners, Inc.*s (“CPI”) Application for Temporary Restraining Order (“Application”), and all evidence and arguments of counsel, is of Ahe Gourk held The hess 4 Btunse the opinion thi the same should in all things be GRANTED. eX parle fnough dul hoticed, kee Oetordanrts foiled to ogpear The Court finds that the specific facts set forth hy the Affidavit of Dennis J. Ottis, attached to CPI’s Application, show that immediate and irreparable injury, loss, or damage will result ta CPI, before notice can be formally served and « hearing had thereon. The Court notes CPI has attempted to provide informal notice to Vantage Benefits Administrators, Inc. and Jeffery A. Richie via email, but issues this Temporary Restraining Order (“Order”) even if no actual notice was effected because the specific facts set forth by the Affidavit of Dennis J. Ottis demonstrate immediate and irreparable injury, loss, or damage will result to CPI. The Court finds thisOrder necessary to preserve the status quo and prevent further transfer of assets or funds which comprise the subject matter of CPI’s claims against Vantage Benefits Administrators, Inc. and Jefftey A. Richie. Such further transfer would comprise an irreparable injury because it would have the effect of precluding a just recovery for CPI on its claims for the retwm of allegedly stolen assets or funds. The Court ORDERS that no person subject to Tex. R. Civ, P. 683 sball, directly or indirectly, transfer or cause to be transferred any asset or funds from the possession, control, or custody of either Vantage Benefits Administrators, Inc, or Jeffrey A, Richie, absent approval of this Court on notice to CPI or CPI’s written consent. Provided however, this Order shall not preclude Jeffrey A. Richie from using fumds for the reasonable purchase of his own his dependants’ living necessities. Examples of such necessities shall include without limitation reasonable expenses for food, clothing, and shelter, Jeffery A. Richie shall keep strict records of all such expenses incurred during the effect of thisOrder. ‘This Order is issued at_ 1:5 Tam (time) on Ney umber "1, 2etT _ Gate) and shal] be filed with the clerk's office forthwith and entered of record. Absent further order of this Court, this Order shall expire fourteen days from its issuance. The Cowt further ORDERS that a hearing on CPY’s Application for Temporary Injunction and Applications for Attachment will be held on Ndvconloer aon. at FD am. The Court further ORDERS that CPI shall post a bond in the seamount of —_—— F\ 0007 - —. ~ 22 LEenPRESIDING JUDGE c ee