Lexington International News

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 Businss 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)

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 above.

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

  1. 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.

  2. 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.

  3. On March 18, 2008, the Court entered default judgments in the Receiver v. Arena case against the following defendants for the following amounts: 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.

  4. 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.

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

  1. 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.

  2. 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.

  3. 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.

  4. 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.

  5. 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.

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.

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.

  1. 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.

  2. 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.

  1. 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.

May 17, 2006
On May 17, 2006, Lexington International Fund, Inc. was placed into receivership by order of Judge Clarence Cooper of the United States District Court for the Northern District of Georgia. It has ceased operations.