Facts

William Hoffman, the court-appointed permanent receiver for Nationwide Automated Systems Inc., Oasis Studio Rentals LLC, Oasis Studio Rentals No.2 LLC, and Oasis Studio Rentals No.3 LLC, and its subsidiaries and affiliates, filed a complaint against Marvin Tarnol and Laurie Tarnol, individually and as Trustees of the Marvin Tarnol and Laurie Tarnol Second Amended Intervivos Trust Dated Nov. 4, 1997, involving allegations of fraud.

PLAINTIFF'S CONTENTIONS:
NASI was allegedly a classic Ponzi scheme. In 2014, the SEC initiated investigations, leading to the appointment of a receivership. Following an investigation, plaintiff uncovered several fraudulent transfers to defendants from the receivership entities. Plaintiff brought this action against defendants, alleging causes of action for fraudulent transfer, unjust enrichment, and constructive trust. Plaintiff additionally moved for summary judgment.

DEFENDANTS' CONTENTIONS:
Defendants denied the allegations and asserted various affirmative defenses.

Defendants were not involved in the formation, conduct or perpetration of the fraudulent scheme. Defendants contended they were innocent investors, who had no involvement in the scheme for which the Receiver was appointed. The complaint was for funds paid to defendants as investors only and who, themselves, were victims of the scheme.

Result

The district court entered judgment in favor of the receiver, Hoffman, and entered judgment against the Tarnols in the amount of $1,456,716.