General News

August 24, 2010 -- Indictment against Geoffrey Gish and Myra Ettenborough
The Grand Jury has returned an indictment against Geoffrey Gish and Myra Ettenborough. You can read the indictment here. We will post further updates as they are available.

July 8, 2010 -- Eighth Receiver's Report filed
On July 8, 2010, the Receiver filed his Eighth Report Regarding Receiver's Activities and Status of the Receivership Estate. You can access a copy of the report from the Receiver's Reports section of this Web site.

A copy of the report can be viewed by clicking on the following link.

May 2010 -- Collections and Judgments since December 2009
The Receiver has collected $119,714.29 in settlements and consent judgments from profiting investors since December. The Receiver has received two additional default judgments against profiting investors totaling $63,013.41, which he is currently seeking to collect.

December 8, 2009 -- Seventh Receiver's Report filed
On December 8, 2009, the Receiver filed his Seventh Report Regarding Receiver's Activities and Status of the Receivership Estate. You can access a copy of the report from the Receiver's Reports section of this Web site.

A copy of the report can be viewed by clicking on the following link.

October 19, 2009 – Default judgments obtained
On October 8, the Court entered default judgments in the Receiver v. Ghods, et al. case against the following defendants for the following amounts:

Zahra Ghods, Rusa Cap, Inc., and Unisource Cap, LLC – $12,266,599.36
Estrella de Fuego, S.A. - $294,810.98
Double Grace Holdings, Ltd. – $937,630.48
Antonio Maria Ruspoli – $5,500,782.60

The Receiver is in the process of registering these judgments in jurisdictions where the defendants may have assets. Copies of each of the default judgments may be viewed on the Court Filings portion of this Web site or by clicking on the following links:

September 16, 2009 – Summary judgments obtained against 4 profiting investors
On September 16, 2009, the Court entered summary judgment against Ziad Minkara, Anthony Mitchell, and Barry & Rhonda Beers. The Court held that the amounts received by Defendants in excess of the amounts they invested were fraudulent transfers and that the Receivership Companies were operated as a Ponzi scheme. The Court entered a judgment against Ziad Minkara for $30,867.70 plus $5,035.32 pre-judgment interest and against Anthony Mitchell for $44,714.29 plus $8,981.35 in pre-judgment interest. The Court held that the amount owed by Barry & Rhonda Beers is in dispute and will hold a trial to determine the amount owed.

A copy of the Order can be viewed by clicking on the following link.

September 15, 2009 – Profiting investor ordered to produce discovery to the Receiver
On September 15, 2009, the Court ordered that Hap Schultz and Riverfront Properties is required to cooperate in the discovery process and turn over requested documents to the Receiver. The Receiver moved to compel production of documents and information needed to file a motion for summary judgment against Mr. Schultz and Riverfront Properties after those parties refused to respond to discovery requests.

A copy of the Order can be viewed by clicking on the following link.

August 11, 2009 – Suit Filed Against Eight Additional Profiting Investors
On August 11, 2009, after repeated demands and unsuccessful attempts to settle without litigation, the Receiver filed suit in the U.S. District Court for the Northern District of Georgia against eight investors to recover nearly $300,000 in profits they received on their investments with the Receivership Companies. These investors are not legally entitled to retain their profits, but failed or refused to return the money to the Receivership Estate so it could be used to make distributions to investors who have suffered loss.

A copy of the Complaint can be viewed by clicking on the following link.

August 7, 2009 – Default judgment obtained against Geoffrey A. Gish
As previously reported, on November 7, 2008, the Receiver filed a non-dischargeability proceeding against Mr. Gish. After Mr. Gish filed an untimely answer on March 13, 2009, the Receiver filed motions for entry of default and default judgment. On May 15, 2009, the Bankruptcy Court made an entry of default against Mr. Gish. On August 7, 2009, the Bankruptcy Court entered a default judgment awarding the Receiver a judgment of $18,000,000 and denying his discharge as to that debt and all others.

A copy of the Judgment can be viewed by clicking on the following link.

August 7, 2009 – Sixth Receiver’s Report filed
On August 7, 2009, the Receiver filed his Sixth Report Regarding Receiver’s Activities and Status of the Receivership Estate. You can access a copy of the report from the “Receiver’s Reports” section of this Web site.

A copy of the Report can be viewed by clicking on the following link.

March 11, 2009 – Securities and Exchange Commission obtains summary judgment against Zahra Ghods and Rusa Cap, Inc.
On February 26, 2009, the Securities and Exchange Commission (“SEC”) won summary judgment against Zahra Ghods and Rusa Cap, Inc. The Court found that Ms. Ghods committed securities fraud in connection her misrepresentations to investors in the Receivership Companies.

The Court ordered Ms. Ghods to disgorge $4,045,736 in funds that she received from the Receivership Companies, plus prejudgment interest of $810,121. The Court further ordered that Ms. Ghods and Rusa Cap pay civil monetary penalties to the SEC in the amounts of $120,000 and $600,000, respectively.

A copy of the Order can be viewed by clicking on the following link.

January 12, 2009 – Default judgments obtained
On August 21 and 22, 2008, the Court entered default judgments in the Receiver v. Arena, et al. case against the following defendants for the following amounts:

James M. Matthieson, Seven Star Wines of Moldova, Inc., and Moldova Georgia USA Business Center LLC – $118,840.90 (August 21, 2008)
Stuart Irving Robbins and Waterways Management - $1,798,568.42 (August 22, 2008)
Derrick Telling – $668,195.45 (August 22, 2008)

A copy of these filings can be viewed on the Court Filings portion of this Web site or by clicking on the following links:

January 12, 2009 – SEC Litigation against Zahra Ghods and her companies
On July 21, 2008, the SEC filed a motion for summary judgment against Ms. Ghods in the case of SEC v. Ghods et al., United States District Court for the Northern District of Georgia, Civil Action No. 1:07-CV-1047. The motion seeks entry of a final judgment ordering Ms. Ghods to disgorge $11,755,642, representing profits gained as a result of her fraudulent conduct, and pay pre-judgment interest of $1,996,611. The motion also seeks an order permanently restraining Ms. Ghods and her companies from violating the securities laws and a civil money penalty. Ms. Ghods filed a response brief in opposition to the motion on August 22 and the SEC replied on September 12, 2008. The SEC is currently awaiting a ruling from the Court.

A copy of these filings can be viewed on the Court Filings portion of this Web site or by clicking on the following links:

September 17, 2008 - Receiver’s Fifth Interim Report
The Receiver’s Fifth Interim Report is now available for download on the Receiver Reports portion of this Web site.

May 1, 2008 – Proof of Claim Forms Filed Against Gish Bankruptcy Estate
As part of Geoffrey A. Gish's bankruptcy case, creditors are given the opportunity to file "proofs of claim" for money that they contend Mr. Gish owed to them. On April 22, 2008, the SEC filed a proof of claim against Mr. Gish's bankruptcy estate for $1,420,113.73. To see the SEC's proof of claim, please click here. On April 28, 2008, the Receiver filed a proof of claim against Mr. Gish's bankruptcy estate for over $18 million. To see the Receiver's proof of claim , please click here.

April 24, 2008 – Suit filed against Zahra Ghods and her companies, business associates and son
On April 8, 2008, after further efforts to obtain a settlement without litigation proved unfruitful, the Receiver filed a lawsuit in the United States District Court for the Northern District of Georgia against Zahra Ghods; Rusa Cap, Inc.; Unisource Cap, LLC; Double Grace Holdings, Ltd.; Estrella de Fuego S.A.; Jeffrey James Mayo Priebe; Antonio Maria Ruspoli; Simon Gulkanian; and Purya K. Ghrabeti. The Complaint seeks damages of over $10 million and alleges claims including fraudulent transfer, conversion, claims under the federal and state Racketeer Influenced and Corrupt Organizations Acts and civil conspiracy. A copy of the complaint can be viewed on the Court Filings portion of this Web site or by clicking here.

April 18, 2008 – Collections and Judgments Over the Last Four Months

In December, the Receiver reached a settlement with Drew and Lewis Abbott on the loans they received from Weston Rutledge Financial Services, Inc. As part of the settlement, the Abbotts have paid $385,082.11 into the Receivership Estate. The settlement was approved by the Court in the SEC v. Gish case on February 8, 2008. A copy of the Order approving the settlement can be viewed on the Court Filings portion of this Web site or by clicking here.
On February 28, 2008, the Court entered a consent judgment against Donovan Davidson for $613,208.04 in the Receiver v. Arena case. The judgment is based largely on the Receiver’s claims for commissions that Mr. Davidson received for soliciting investors. In the consent judgment Mr. Davidson forgoes any participation in distributions from the Receivership estate. A copy of the consent judgment can be viewed on the Court Filings portion of this Web site or by clicking here.
On March 18, 2008, the Court entered default judgments in the Receiver v. Arena case against the following defendants for the following amounts:
- Karl Johnson and Majestic Capital Management – $634,631.04
- Steven Arena and Champion Partners & Associates – $310,519.33
- Mark Goodley and No Guilt Chocolate Company, LLC – $247,933.38
The Receiver is in the process of registering these judgments in jurisdictions where the defendants may have assets. As previously reported Karl Johnson has been convicted of federal wire fraud and is currently incarcerated. Copies of each of the default judgments can be viewed on the Court Filings portion of this Web site or by clicking above.
The Receiver has also collected over $65,000 owed from 3 profiting investors as a result of the suit brought against those investors and others to recover profits they received from the Ponzi scheme and are not legally entitled to retain. The total recovered to date from profiting investors is $172,773.

April 18, 2008 – Geoffrey A. Gish’s Bankruptcy Update
As previously reported, Mr. Gish is currently in Chapter 7 Bankruptcy. As a bankruptcy debtor, he is required to file certain financial schedules and provide other financial information to the Court. He is also required to attend a meeting of creditors and answer questions. Although he was several months delinquent in providing his financial schedules to the Court, he filed those schedules on February 12, 2008 and attended a creditors meeting on February 27, 2008, after the Bankruptcy Court ordered him to do so. The Receiver is pursuing additional information from Mr. Gish by deposition and production of financial records. On February 13, 2008, Mr. Gish turned over a key to his house to the Bankruptcy Trustee, who will eventually sell the house. The Receiver expects to receive at least some portion of the proceeds from the sale of the house. The Receivership Companies’ claims in the SEC v. Gish represent the largest claim in the Gish bankruptcy proceeding. The amount of any recovery will depend on, among other things, the amount of proceeds from the sale of Mr. Gish’s house, whether any other assets are identified and brought into the bankruptcy estate, and the validity of tax claims based on Mr. Gish’s failure to file income tax returns for the years 2000, 2001, 2002, 2003, 2004, 2005 and 2006. A portion of the tax claims are asserted on a priority basis.

November 19, 2007 – Receiver’s Fourth Interim Report
The Receiver's Fourth Interim Report is now available for download on the Receiver Reports portion of this Web site.

November 6, 2007 - Suit Filed Against Profiting Nine Investors
On November 2, 2007, after repeated demands and unsuccessful attempts to settle without litigation, the Receiver filed suit in the U.S. District Court for the Northern District of Georgia against nine investors to recover over $1.3 million in profits they received on their investments with the Weston Rutledge companies. These investors are not legally entitled to retain their profits, but failed or refused to return the money to the Receivership Estate so it could be used to make distributions to investors who have suffered loss.

It is long-settled law that Ponzi scheme investors, who profit from their investments by receiving more from the scheme than they invested, are not entitled to retain their profits, because those profits were funded with money received from other investors who suffered losses. This rule applies even though the profiting investors were unaware of the nature of the scheme and believed that they were receiving the returns promised by the Ponzi scheme operators. The principle behind the rule is that, even though the profiting investors may have innocently profited, the profits they received caused loss to other equally innocent investors. It is thus inequitable for them to retain their profits at the expense of other investors.

The financial records of the Receivership Companies and the bank records subpoenaed by the Receiver have shown that every one of the investment programs in which Zamindari, Lexington International and other Weston Rutledge entities invested resulted in very substantial losses. In fact, most of them did not even yield any appreciable return of principal, much less any income that could have funded investor profits. Thus no investors earned any legitimate profits on their investments. Every investor who did receive more back than he or she invested was paid with other investors' money.

There are other profiting Weston Rutledge investors who were not included in the suit filed last week. The Receiver has given all investors, who according to the Receivership Company records appear to have profited, ample opportunity to present evidence demonstrating that they did not receive more than invested. The Receiver is attempting to work out settlements with investors who would have difficulty repaying the money they owe and were willing to provide sworn financial statements. Some profiting investors have reached agreement with the Receiver to repay their profits over time. In those cases, the Receiver has asked the investor to sign a promissory note and provide collateral to ensure that payments are made as promised. The Receiver is in still negotiations with some investors regarding the amounts owed or repayment terms. The Receiver plans to file suit against any of the remaining profiting investors who are unwilling to repay what they owe, however.

October 25, 2007 - Gish Bankruptcy Converted to Chapter 7
On October 23, 2007, Mr. Gish's Chapter 11 bankruptcy filing was converted to a Chapter 7 bankruptcy filing. The Bankruptcy Court also ordered Mr. Gish to file a schedule of his current income and current expenditures on or before November 26, 2007 and to file a schedule of all unpaid debts incurred since he initially filed his Chapter 11 petition.

A trustee, Neil C. Gordon, has been appointed to conduct the proceedings and take custody of the property of the bankruptcy estate.

The first meeting of creditors has been scheduled for November 19, 2007. However, Mr. Gish has yet to file bankruptcy schedules disclosing his assets and liabilities.

The Receiver will continue to participate in Mr. Gish’s bankruptcy case in an effort to ensure that any potential recoveries on the SEC's disgorgement judgment and the Receiver's claims are obtained for the benefit of the investors.

October 16, 2007 – Gish Files Chapter 11 Bankruptcy
On September 4, 2007, Geoffrey A. Gish filed for Chapter 11 bankruptcy in the United States Bankruptcy Court for the Northern District of Georgia. As previously reported, Mr. Gish filed for Chapter 7 bankruptcy in May of this year, but his Chapter 7 bankruptcy filing was dismissed for his failure to attend creditor meetings.

A meeting of creditors was held in Mr. Gish’s Chapter 11 bankruptcy case on October 11, 2007. Though Mr. Gish did attend, the meeting could not be completed because of Mr. Gish’s failure to file his financial schedules.

As in the previous bankruptcy filing, this Chapter 11 bankruptcy filing stays the Receiver's current litigation against Mr. Gish. This means that, unless the Bankruptcy Court modifies the stay, the Receiver must pursue his claims against Mr. Gish in the bankruptcy proceeding. If Mr. Gish's bankruptcy proceeding continues, the Receiver plans to participate in the case as a creditor to determine what assets he has and to assess the likelihood of recovery from Mr. Gish's bankruptcy estate. The Receiver will also assess whether to contest the dischargeability of the Receivership Estate’s claims against Mr. Gish.

October 16, 2007 – Receiver Files Suit
On October 11, 2007, the Receiver filed suit against 14 individuals and entities who collectively received approximately $5 million from the Receivership Companies. The complaint alleges 11 individual counts, including fraudulent transfer, conversion, fraud, breach of fiduciary duty, and unjust enrichment. The complaint also alleges that certain of the defendants participated in a conspiracy to defraud the investors of the Receivership Companies and seeks triple damages from those defendants pursuant to the Racketeer Influenced and Corrupt Organizations Act. The Receiver will provide more detailed information regarding this suit and post a copy of the complaint in the near future.

The Receiver and the SEC are in settlement discussions with other persons who obtained funds from the Receivership Companies, but plans to file suit within the next 10 days, if there is not significant concrete progress in those discussions.

The Receiver had hoped to avoid filing suit against investors who received funds from the Receivership Companies that exceeded their original investments. The Receiver sought to settle with each of these investors, and has been successful in settling with several of them. He is filing suit against other profiting investors who have failed or refuse to return their profits.

July 23, 2007 – UPDATE: Dismissal of Geoffrey A. Gish’s Bankruptcy Petition
On July 23, 2007, the United States Bankruptcy Court for the Northern District of Georgia dismissed Mr. Gish's bankruptcy petition. As a result of this dismissal, the stay of the Receiver's cross-claim against Mr. Gish in the District Court action is dissolved and the Receiver will now be able to proceed with the litigation.

July 19, 2007 – Update regarding Geoffrey A. Gish’s Bankruptcy Filing: Bankruptcy Trustee requests dismissal of Mr. Gish's bankruptcy petition
As previously posted, on May 1, 2007, Geoffrey A. Gish filed for bankruptcy in the United States Bankruptcy Court for the Northern District of Georgia. The first meeting of creditors was scheduled for June 8, 2007, but Mr. Gish did not appear. Mr. Gish's bankruptcy trustee, Jordan Lubin, rescheduled the meeting for July 17, 2007, and again, Mr. Gish did not appear. Mr. Gish has yet to file his mandatory bankruptcy schedules disclosing his assets and liabilities. On July 19, 2007, Mr. Lubin filed his report with the bankruptcy court requesting that Mr. Gish's bankruptcy petition be dismissed for his failure to appear for two scheduled creditors' meetings. If Mr. Gish's bankruptcy petition is dismissed, the automatic stay currently precluding the Receiver from pursuing his cross-claim in district court against Mr. Gish will be dissolved.

July 19, 2007 – Resolved Claims Against Profiting Investors
The Receiver has recently resolved claims as to two profiting investors. The first claim involved a settlement in the investor's bankruptcy proceeding. After approval of the settlement by the Northern District of Georgia, the settlement will bring in $28,375 into the Receivership Estate. The second claim, the settlement of which has been approved by the Northern District of Georgia, will bring in $35,286 to the Estate. The Receiver has also received another $11,000 in escrow from a third investor toward repayment of his profits. The Receiver has made demand on other profiting investors. The Receiver plans to file suit against those who fail or refuse to repay the profits they received.

July 18, 2007 – Order Instituting Administrative Proceedings
On July 6, 2007, the Securities and Exchange Commission issued an administrative order under the Investment Advisers Act of 1940 barring Geoffrey A. Gish from association with any investment adviser. In settlement of administrative charges, Mr. Gish consented to the entry of the order. To see a copy of the order, click here. For a copy of the SEC's Release IA-2616, click here.

June 18, 2007 – Final Judgment entered against Geoffrey A. Gish
On June 15, 2007, Judge Clarence Cooper of the Northern District of Georgia entered a final judgment against Geoffrey A. Gish in the case brought by the Securities and Exchange Commission. Mr. Gish consented to the entry of this judgment as part of his settlement with the SEC. The judgment enjoins Mr. Gish from future violations of the antifraud provisions of the Securities Exchange Act of 1934 and the Investment Advisers Act of 1940, imposes a civil fine on him of $120,000.00 and orders him to pay disgorgement to the Receivership Estate of $1,258,836.92, together with $41,276.81 in prejudgment interest. No action can be taken to collect the civil fine or the disgorgement amount so long as the automatic stay in Mr. Gish's bankruptcy remains in effect. A copy of the judgment has been posted on the Court Filings page of this Web site. Read the SEC's release regarding the final judgment against Geoffrey A. Gish here.

June 18, 2007 – Update regarding Geoffrey A. Gish’s Bankruptcy Filing: Creditors Meeting Postponed
As previously posted, on May 1, 2007, Geoffrey A. Gish filed for bankruptcy in the United States Bankruptcy Court for the Northern District of Georgia. The first meeting of creditors was scheduled for June 8, 2007, but Mr. Gish did not appear and has not filed his mandatory bankruptcy schedules disclosing his assets and liabilities. Mr. Gish's bankruptcy trustee, Jordan Lubin, rescheduled the meeting for July 17, 2007. Mr. Lubin has indicated that he will move to dismiss the bankruptcy if Mr. Gish's failure to file his bankruptcy schedules continues. In the meantime, the Receiver's cross-claims against Mr. Gish remain subject to the automatic stay.

May 10, 2007 – SEC Suit Filed Against Zahra Ghods, RUSA Cap, LLC and Unisource, LLC
On May 8, 2007, the SEC filed an enforcement action in the United States District Court for the Northern District of Georgia against Zahra Ghods, RUSA Cap, LLC and Unisource, LLC for violations of Securities Act of 1933 and the Securities Exchange Act of 1934 based on Ms. Ghods' involvement in the prime bank fraud Ponzi scheme that Geoffrey Gish is alleged to have conducted through the Receivership Companies. The SEC seeks a permanent injunction, appointment of a receiver, a judgment for disgorgement of ill-gotten gains and civil penalties from the defendants. For further information, please see the Court Filings page of this Web site for a copy of the SEC's complaint. [A link to the SEC’s Web site is posted on the Links page of this Web site.] The text of the SEC's Litigation Release No. 20111 announcing the filing of the enforcement action is as follows:

Litigation Release No. 20111 / May 10, 2007

Securities and Exchange Commission v. Zahra Ghods and RUSA Cap., Inc., Defendants, and Unisource Cap., LLC, Relief Defendant, Civil Action No. 1:07-CV-1047 (NDGA May 8, 2007)

On May 8, 2007, the Securities and Exchange Commission (Commission) filed a Complaint for Injunctive Relief (Complaint) in the United States District Court for the Northern District of Georgia against Zahra Ghods, a U. S. citizen who currently resides in Hong Kong, and RUSA Cap., Inc. (RUSA), an entity located in Newport Beach, California that Ghods owns and controls.

The Complaint alleges that from as early as February 2004 through May 2006, Ghods and RUSA actively participated in a fraudulent prime bank scheme perpetrated by Geoffrey Gish (Gish) and several entities that he controlled. That prime bank scheme involved the sale of approximately $29.6 million of securities to more than 300 investors located throughout the United States. The Commission previously filed an emergency action against Gish and his affiliated companies on May 17, 2006. SEC v. Geoffrey Gish, et al., Case No.1:06-cv-1171-CC (N.D. Ga.).

The Complaint alleges that Ghods and RUSA participated in one of the three fraudulent prime bank schemes that Gish offered, Zamindari Capital, LLC, and received approximately $9 million of investor funds. Zamindari was represented to be a high yield investment program that generated lucrative profits by purchasing debt instruments from major international banks at a discount and quickly reselling them at face value. RUSA was the entity that would supposedly trade these debt instruments for Zamindari investors.

To entice investors to invest in Zamindari, the Complaint alleges that Ghods represented that all investor funds would remain in a blocked account, from which no withdrawals could be made. In truth, no such blocked account existed. Ghods transferred approximately $830,000 of investor funds to Unisource Cap, LLC, another company that she owned and controlled, and then used those funds to pay miscellaneous personal expenses. Ghods also claims that she used $2.2 million of investor funds for the development of an iron ore mine in Mexico that Unisource purportedly owns. Ghods transferred the remaining $5 million of investor funds to an offshore bank account, and those funds were then transferred to a third party.

The Complaint further alleges that, to create the false appearance that their investments were safe, Ghods told Gish and several investors that RUSA guaranteed all investments with a $100 million certificate of deposit that RUSA held at Canadian Imperial Bank of Commerce, a Canadian financial institution. In fact, no certificate of deposit existed.

The Complaint alleges that Ghods and RUSA violated the antifraud provisions of the federal securities laws, Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and that relief defendant Unisource, directly or indirectly, obtained funds or other assets to which it has no legitimate claim, and has been unjustly enriched thereby. The Complaint also seeks (i) permanent injunctions enjoining defendants Ghods and RUSA against future violations; (ii) disgorgement of ill-gotten gains plus prejudgment interest; (iii) imposition of civil penalties against defendants Ghods and RUSA; and (iv) an order appointing a receiver for defendant RUSA.

See also: L.R. 19705 / May 19, 2006; and L. R. 19759 / July 13, 2006

May 9, 2007 - Geoffrey A. Gish files for bankruptcy on May 1, 2007
On May 1, 2007, Geoffrey A. Gish filed for bankruptcy in the United States Bankruptcy Court for the Northern District of Georgia. Mr. Gish filed the case as a "no asset" case under Chapter 7 of the U.S. Bankruptcy Code. He has not yet filed bankruptcy schedules listing his assets and liabilities. The bankruptcy filing stays the Receiver's current litigation against Mr. Gish. This means that, without permission of the Bankruptcy Court, the Receiver can only continue to pursue claims against Mr. Gish and continue its efforts to collect the funds that Mr. Gish owes to the Receivership Companies through filing a claim in the bankruptcy proceeding. The Receiver plans to participate in the bankruptcy proceeding as a creditor, to determine what, if anything, has happened to assets he is supposed to have owned and to assess whether there is any likelihood of recovery from Mr. Gish's bankruptcy estate. The Receiver will also assess whether to contest the dischargeability of the Receivership Estate’s claims against Mr. Gish. The first meeting of creditors is scheduled for June 8, 2007.

May 9, 2007 - The Securities and Exchange Commission reaches settlement with Geoffrey A. Gish
The Commission approved a settlement with Geoffrey A. Gish in April of 2007. Without admitting or denying the allegations of the SEC's complaint, Mr. Gish has agreed to entry of a judgment which would enjoin him from future violations of the antifraud provisions of the Securities Exchange Act of 1934 and the Investment Advisers Act of 1940, would impose a civil fine on him of $120,000.00 and provide for a judgment of disgorgement of $1,258,836.92, payable with interest to the Receivership Estate. On April 20, 2007 SEC litigation counsel filed a proposed consent judgment with the Court. As of the date of this report, the Court has not acted on the consent judgment.

February 27, 2007 – Notice Regarding Bar Date Deadline:
The Court has set a Bar Date for the submission of investor or creditor claims. The Bar Date for submitting investor and creditor claims is APRIL 27, 2007.

A copy of the Court’s Order setting the Bar Date is available on the Court Filings portion of this Web site.

Please understand that in order to be able to share in distributions from the Receivership Estate, your completed proof of declaration form must be received in my office (at the address indicated on the form) on or before April 27, 2007.

For more information, or to obtain a copy of the proof of declaration form, please visit the Investor/Creditor Claims portion of this Web site.

February 21, 2007 – Information for Your Tax Advisor

How am I supposed to report my Zamindari, Lexington or Oxford Adams investment on my taxes?

Answer: You will need to consult with your own tax advisor. The Receiver cannot provide tax advice, and individual investor circumstances vary. There is tax literature discussing Ponzi scheme and other investment fraud losses as covered under the casualty loss provisions of Section 165 of the Internal Revenue Code. The Securities and Exchange Commission and the Receiver both filed claims based on allegations that the Receivership Companies were operated as a Ponzi scheme and the Court has entered orders based on those allegations. However, the issue has not been determined with finality by the Court.
Is there is a reasonable possibility of some recovery for investors? Is the Receiver able to provide information now on the amount of possible recoveries and losses?

Answer: First, while the Receiver expects that investor losses will be substantial, there remain prospects of some recovery and a likelihood of some distributions to investors who have suffered those losses. Those cannot, unfortunately, be quantified at this time.

The amount of eventual distributions will, of course, affect the amount of investors’ losses. The amount of distributions will depend on (a) the total amount of funds the Receiver collects through asserting claims against the persons to whom investor funds were transferred, (b) the amount of investor and creditor claims filed and allowed, and (c) the costs of the Receivership. None of these variables can be determined or even reliably estimated at this point in the Receivership.

Neither the distributions nor the losses can ultimately be determined until the recovery process and claims administration process are complete and the court has approved a plan of distribution. Even at that point, the amount of losses will vary by investor, and each investor will need to determine his or her own losses and how to report them for tax purposes. The amount of losses thus cannot be determined at this time and the Receiver is not in a position to provide reliable estimates.
Will investors receive a K-1 from Zamindari, Lexington, Oxford Adams or Weston Rutledge for 2006?

Answer: No. Investors did not invest in, purchase or own an interest in the Receivership Companies themselves, but participated in supposed investment programs, signing contracts, opening accounts and depositing funds on which they were told they would earn income.
Will investors receive 1099-Int or 1099-Div statements for their Zamindari, Lexington or Oxford Adams accounts for 2006?

Answer: No. Based on all the information available to the Receiver, investors did not earn any interest, dividends or taxable distributions in 2006.
What if I received more from Zamindari, Lexington or Oxford Adams than I invested?

Answer: It is the Receiver’s position that investors who received any such “profits” are not legally entitled to retain them. Those excess withdrawals were obtained at the expense of other investors and should be returned to the Receivership Estate. The Receiver has already sent demands to many investors who withdrew more than they invested, plans to send out additional demands and intends to enforce the obligation of those investors to return the funds.

February 12, 2007 – NOTICE REGARDING BAR DATE DEADLINE:
The Court has not set a Bar Date for the submission of investor or creditor claims. As previously reported, the Receiver amended his motion for establishment of a Bar Date to request that the Court set a deadline of February 15, 2007. However, the Court has not acted on the amended motion. The Receiver wants investors and creditors to have ample and fair notice of the Bar Date once it has been set. Because February 15 was fast approaching, the Receiver wrote to the Court on February 2, 2007 revising his Bar Date request. He asked that a Bar Date be set for two (2) months following the Court's entry of the Bar Date Order. The Receiver will give investors and creditors notice of the Bar Date once it has been set. In the meantime, no deadline has been set, and proof of claim forms are not due on February 15, 2007. The Receiver does encourage all investors to submit their claims, however, as soon as they can, since it is important to know the total amount of loss that investors are claiming and we would like to begin reviewing claims and addressing problems before the Bar Date expires

For more information, please visit the Investor/Creditor Claims portion of this Web site.

February 7, 2007 – $507,937.64 Recovery from the State of Arizona
As previously reported, the records of the Receivership Companies show that in 2005 Mr. Gish transferred over $1 million from Zamindari Capital LLC to Majestic Capital Management, a company located in New Jersey and run by Karl Johnson. Approximately $500,000 of the funds were frozen and then forfeited by the State of Arizona when Mr. Gish failed to reclaim them. After several months of effort by the Receiver to recover these funds, the Receiver has received a wire in the amount of $507,937.64 from the Arizona Attorney General's Office. The Receiver is pleased to report this recovery on behalf of the investors and will continue his efforts to recover the remaining funds from Mr. Johnson and Majestic Capital Management.

February 5, 2007 - Summary of Pertinent Points from the Deposition of Zahra Ghods on January 25-26, 2007
Jennifer Odom (Receiver’s Counsel) and Graham Loomis (SEC) took the deposition of Zahra Ghods in Hong Kong on January 25 and 26, 2007. The deposition lasted approximately 12 hours over two days. The deposition yielded important information, including answers to questions that many investors have asked based on representations that were made about or by Ms. Ghods and questions regarding her activities and assets. While her testimony was informative, it was not encouraging with regard to the prospects of recovery from or through her.

General

As discussed in the Receiver’s reports that the Receiver has filed in the pending litigation, bank records show that Ms. Ghods received approximately $10 million from the Receivership Entities. Ms. Ghods testified that only $5 million of these funds was intended to be invested in a bank note trading program. Ms. Ghods claimed that the remaining funds that she received from the Receivership entities was to be invested in her iron ore mines, or to pay her personal living expenses.

San Marino Bank Account

Ms. Ghods was questioned at length regarding $5,000,000 in funds that had been transferred to an account, in the name of her company Rusa Cap, at a bank in the small European country of San Marino. She testified that neither she nor Mr. Gish were signatories on the Rusa Cap account at the bank in San Marino and therefore she never had any power or control over that account even though she told investors that she did. Ms. Ghods testified that she had given power over the San Marino account to another individual, Antonio Maria Ruspoli, so that he could engage in the bank note trading program for Rusa Cap. In response to the SEC’s and Receiver’s subpoenas, Ms. Ghods produced documents regarding Mr. Ruspoli and his associate, Jeffrey M. Priebe, and her communications and agreements with them.

By July 2005, Ruspoli had transferred from the Rusa Cap account at San Marino all of the $5 million that Rusa Cap had received from the Receivership Entities. Those funds appear to have been transferred to Ruspoli’s personal bank account. Ghods claims that Ruspoli transferred these funds without her knowledge or consent. She admitted that she had discovered the transfers by no later than August 2005.

Ms. Ghods claims that Mr. Ruspoli and Mr. Priebe have refused to return the funds or respond to any of her inquiries about the funds, and she could not provide any information as to their current whereabouts. She promised to furnish any information she obtains on either individual to the SEC and the Receiver.

After August 2005, Ms. Ghods assured several investors that the funds in the San Marino account were secure, even though Ruspoli had already depleted the funds from that account. Ms. Ghods’ testified that, in giving these assurances, she was simply repeating what Ruspoli and Priebe had told her. It appears that any statements that funds in the San Marino account were invested and earning returns were untrue. In fact, Ms. Ghods could not identify any trading programs that Rusa Cap or she had arranged.

Iron Ore Mines:

Ms. Ghods was questioned extensively regarding the iron ore mines that she claims to own in Mexico with another individual. (Upon request for the contact information for this individual, Ms. Ghods stated that he died in September 2006).

She admitted that the mines are not operating and that it will require significant resources, such as the construction of a conveyor belt at a cost of $30 million, to move the iron ore from the sites to the port in Mexico.

Ms. Ghods has never sold any ore from the mines, although she testified that she has been trying to do so for several years. She claims that she is currently negotiating an agreement with a Chinese entity to buy the ore from her mines. Neither the SEC nor the Receiver can confirm the veracity of this testimony.

Based on her testimony, it does not appear that the mines will be an easy source of recovery for investors, and it would require significant sources of capital to retrieve the iron ore and move it to the port for sale.

Canadian Bank Account/Certificate of Deposit

Ms. Ghods admitted that she never owned or controlled an account at the Canadian Bank that supposedly held a $100 million Certificate of Deposit.

Ms. Ghods claimed she was only “renting” the $100 million CD.

Ms. Ghods testified that she rented the CD through a third party intermediary, Simon Gulkanian, who supposedly gave her the bank documents that she provided to Gish and a few investors. These documents included purported account statements from the Canadian bank for an account supposedly held by Rusa Cap, and two letters purporting to be from senior bank management, confirming that Rusa Cap held an account at the bank.

Ghods admitted that certain statements in the purported letters from the senior bank management were untrue. Specifically, one of the letters falsely stated that Rusa Cap had been a depositor at the Canadian bank since September 2001 and as of September 2005 had a deposit balance in the “high 10 figures.” Ghods admitted that these statements were false, because Rusa Cap never had an account at any Canadian bank.

Ms. Ghods concedes that the account number on the documents provided by Ms. Ghods belongs to another entity unrelated to the Receivership Companies and held only $17.00 as of December 2005.

Ms. Ghods also conceded that other information on the account documents is inaccurate. Among several other things, Ms. Ghods does not maintain any address in Canada. In fact, she claims she has never been to Canada.

Based on her testimony and other information that the SEC has developed, it appears that she does not have any funds in Canada and never did.

Ms. Ghods’ Assets

Ms. Ghods admitted to having bank accounts for herself and her companies in various countries outside of the United States, including accounts in London and Hong Kong. Ms. Ghods’ U.S. bank records show transfers of funds from the United States to those overseas accounts.

Ms. Ghods does not own any real property in the United States. She lived in an apartment in California, rents an apartment in London and lives in a rented apartment in Hong Kong. Ms. Ghods admitted to owning no other assets other than her bank accounts and the Mexican mines.

Ms. Ghods admitted that she is obligated to repay the funds that she received from the Receivership Companies and individual investors. She states that she has not yet repaid the funds that the Receiver has demanded because she simply does not have the money to do so.

While Ms. Ghods received funds from the Receivership Companies in addition to the $5,000,000 transferred to San Marino, she claims not to have those funds, but has not accounted for what happened to them.

December 15, 2006 - Amended Motion to Set a Bar Date
As previously posted, the Receiver requested that the Court set a bar date for investor and creditor claims to the Receivership Estate. The Court has yet to set a bar date of the date originally requested (December 31, 2006) and in order to ensure adequate time to provide notice to investors and creditors, the Receiver has amended his motion to request a bar date of February 15, 2007.

If the Court grants the Amended Motion to Set a Bar Date and sets a deadline of February 15, 2006, all Proof of Claim forms must be submitted to the Receiver by that date, or claims will not be considered. Any Investor or Creditor claims that are not submitted by that date shall be barred and disallowed, the Receiver and the Receivership Estate shall have no liability therefore, and the investor or creditor will not be entitled to share in distributions from the Receivership Estate. Accordingly, if you have not yet submitted your Investor Claim Form please do so immediately. You can download a copy of the Investor Claim Form with instructions on the Investor/Creditor Claims portion of this Web site. Once a Bar Date is officially set by the Court, the Receiver will mail notice to all Investors and Creditors at the address indicated by the records of the Receivership Companies and any updated address information you may have submitted to the Receiver via e-mail.

Remember, no bar date is final until the Court rules on the motion and definitively sets a bar date. The bar date is merely a deadline to file claims and in no way indicates an end of the receivership or an end of the litigation.

A copy of the Receiver’s amended motion is available for download on the Court Filings portion of this Web site.

December 15, 2006 - Order Granting Receiver's Motion to Compel Production of Documents by Majestic Capital Management
On December 5, 2006, the United States District Court for the District of New Jersey granted the Receiver’s Motion to Compel and ordered Majestic Capital Management ("Majestic") to produce documents requested by the Receiver's Subpoena and to do so no later than December 22, 2006.

The records of the Receivership Companies show that in 2005 Mr. Gish transferred over $1 million from Zamindari Capital LLC to Majestic, a company located in New Jersey and run by Karl Johnson. Approximately $476,000 of the funds were frozen and then forfeited by the State of Arizona when Mr. Gish failed to reclaim them. The Receiver is attempting to recover those funds. Mr. Johnson and his company also received $100 million from a large, failed New York hedge fund, also in receivership, that allegedly operated as a Ponzi scheme. Those funds and perhaps the Zamindari funds were to be invested in a shuttered and abandoned Arizona mine.

In an effort to recover the balance of the funds from Majestic, approximately $530,000, on July 20, 2006, the Receiver issued a subpoena to Majestic requesting the production of documents relating to its affairs with the Receivership Companies. Majestic objected to the Subpoena and refused to produce any documents. The Receiver moved to compel the production of documents responsive to his Subpoena. The federal court order commanding Majestic to produce documents represents a welcome step of progress in the Receiver's attempt to locate and recover the remaining funds.

A copy of the Order is available for download on the Court Filings portion of this Web site.

November 13, 2006 – Deposition of Geoff Gish
On November 13, 2006, Counsel for the Receiver took the deposition of Geoffrey A. Gish.[1] In response to nearly every question, Mr. Gish invoked his Fifth Amendment constitutional right and chose not to respond to any of the Receiver’s deposition questions. The Fifth Amendment to the United States Constitution[2] provides that a person shall not be compelled to be a witness against himself. This means that a person has a right to refuse to answer questions if their answers could be used against them in a criminal proceeding. This is commonly referred to as “pleading the Fifth" or to "taking the Fifth." Mr. Gish refused to answer questions concerning the location of the investor funds, persons who may have the funds, his use of investor funds, and the like, asserting the Fifth Amendment privilege. You may review a copy of the transcript of the deposition by clicking here or by going to the Court Filings portion of this Web site.

A deposition is a tool used during litigation in which the parties can subpoena parties and witnesses for a deposition during which the witness is placed under oath and questioned by the attorneys in the case. The responses are taken down by a court reporter.
Amendment V - Trial and Punishment, Compensation for Takings. Ratified 12/15/1791: “No person shall be held to answer for a capital, or otherwise infamous crime, unless on a presentment or indictment of a Grand Jury, except in cases arising in the land or naval forces, or in the Militia, when in actual service in time of War or public danger; nor shall any person be subject for the same offense to be twice put in jeopardy of life or limb; nor shall be compelled in any criminal case to be a witness against himself, nor be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation.”

November 13, 2006 - Written Discovery Responses from Geoff Gish
On November 13, 2006 Geoffrey A. Gish filed his response to the Receiver’s written discovery in the case of Securities and Exchange Commission v. Geoffrey A. Gish; Weston Rutledge Financial Services, Inc.; Zamindari Capital, LLC; Lexington International Fund, LLC a/k/a Lexington International Fund, Inc.; and Oxford Adams Capital, LLC. Mr. Gish invoked his Fifth Amendment constitutional right[1] and chose not to respond to any of the Receiver’s written discovery. A copy of Mr. Gish’s discovery responses can be viewed by clicking either Response to Interrogatories or Response to Request for Production of Documents or by going to the Court Filings portion of this Web site.

Amendment V - Trial and Punishment, Compensation for Takings. Ratified 12/15/1791: “No person shall be held to answer for a capital, or otherwise infamous crime, unless on a presentment or indictment of a Grand Jury, except in cases arising in the land or naval forces, or in the Militia, when in actual service in time of War or public danger; nor shall any person be subject for the same offense to be twice put in jeopardy of life or limb; nor shall be compelled in any criminal case to be a witness against himself, nor be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation.”

October 31, 2006 - DEADLINE FOR FILING CLAIMS
The Receiver has filed a motion with the Court seeking a December 31, 2006 deadline for all investors and creditors to make their claims against the Receivership Companies. The Receiver’s motion is still pending before the Court and a bar date has not yet been set. A copy of the Motion to Set a Bar Date is available on the Court Filings portion of this Web site.

If the Court grants the Motion to Set a Bar Date and sets a deadline of December 31, 2006, all Proof of Claim forms must be submitted to the Receiver by that date, or claims will not be considered. Any Investor or Creditor claims that are not submitted by that date shall be barred and disallowed, the Receiver and the Receivership Estate shall have no liability therefore, and the investor or creditor will not be entitled to share in distributions from the Receivership Estate. Accordingly, if you have not yet submitted your Investor Claim Form please do so immediately. You can download a copy of the Investor Claim Form with instructions on the Investor/Creditor Claims portion of this Web site. Once a Bar Date is officially set by the Court, the Receiver will mail notice to all Investors and Creditors at the address indicated by the records of the Receivership Companies and any updated address information you may have submitted to the Receiver via e-mail.

October 13, 2006
The Receiver, on October 13, 2006, filed a Motion to File Cross-Claim Against Geoffrey A. Gish and a proposed Receiver’s Cross-Claim Against Geoffrey A. Gish. These documents have been posted to the Court Filings portion of this Web site.

August 28, 2006
The Receiver's First Interim Report has been posted on the Receiver Reports portion of this Web site.

August 25, 2006 - Investor Proof of Claim Declaration Form
The Investor Proof of Claim Declaration Form is now available for download on the Investor/Creditor Claims portion of this Web site.

August 25, 2006 - Sale of Office Furniture and Equipment
The Receiver is continuing to sell remaining items of furniture and equipment from the former Weston Rutledge office in Woodstock, Georgia. You may view sample photographs of the office furnishings as well as an office inventory spreadsheet. If you are interested in making an offer to purchase any of the office furnishings please contact the Receiver via email at WestonRutledgeReceiver@pogolaw.com or via telephone at (404) 572-6834. Please include the column number from the office inventory spreadsheet with any offer transmitted to the Receiver.

July 7, 2006
Please see the Investor/Creditor Claims portion of this Web site for specific instructions on emailing the Receiver your current contact information.

June 30, 2006
By order dated June 30, 2006 Judge Clarence Cooper, with the Defendants’ consent, entered a preliminary injunction, enjoining Defendants from:

Violating Section 17 (a) of the Securities Act;
Violating Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder;
Making use of the means or instruments of transportation or communication in interstate commerce for the purpose of the sale of securities or for the sale of securities or to offer to buy or sell securities without a registration statement; and
Violating Section 206 of the Investment Advisors Act of 1940.

The order also continues the receiverships and asset freezes. The order will remain in effect until a trial on the merits of SEC v. Gish or until further order of court. A copy of the “Order Granting Preliminary Injunction, and Ordering Other Ancillary Relief” is available for viewing and downloading on the Court Filings portion of this Web site.

Please note: In view of the Defendants’ consent to the preliminary injunction, the hearing scheduled for July 24, 2006 has been cancelled.

May 17, 2006
On May 17, 2006, Weston Rutledge Financial Services, Inc., Zamindari Capital, LLC, Lexington International Fund, Inc., and Oxford Adams, LLC were placed into receivership by order of Judge Clarence Cooper of the United States District Court for the Northern District of Georgia. On that date, the receiver took possession of the receivership companies. The receivership companies have ceased operations.