SEC v. CLARENCE DEAN ALFORD, No. 1:20-cv-03164-TWT, Northern District of Georgia (Apr. 8, 2021) — Judgment

Case1:20-cv-03164-TWTDocument25-1Filed03/12121Page1of9
FlL~DINCHAMBERS
THOMASW.ThRASHJR.
~j~0c.Atlanta
UNITEDSTATESDISTRICTCOURT
NORTHERNDISTRICTOFGEORGIAAPR022021
ATLANTADIVISIONJA~S.V~HA,Clerk
SECURITIESANDEXCHANGE
COMMISSION,
Plaintiff,
CivilActionFileNo.
1:20-cv-03164-TWT
v.
CLARENCEDEANALFORD,
Defendant,
FINALJUDGMENTAGAINSTDEFENDANT
CLARENCEDEANALFORD
TheCommissionhasfiledanUnopposedMotionforFinalJudgment
AgainstDefendantClarenceDeanAlford(“Defendant”),requestingthatthe
Courtorderdisgorgement,prejudgmentinterestandcivilpenaltiesagainst
Alford,andalsorestatepermanentinjunctivereliefpreviouslyorderedbythe
Court.UponconsiderationoftheJointMotion,andinaccordancewiththe
ConsentJudgmentpreviouslyagreedtobytheparties,andbeingadvisedin
thepremises,
3

Case1:20-cv-03164-TWTDocument25-1RIed03/12/21Page2of9
I.
ITISHEREBYORDERED,ADJUDGEDANDDECREEDthat
Defendantisliablefordisgorgementof$8,849,653,representingnetprofits
gainedasaresultoftheconductallegedintheComplaint,togetherwith
prejudgmentinterestthereonintheamountof$1,751,085,andacivilpenaltyin
theamountof$7&5’pursuanttoSection20(d)oftheSecuritiesAct
[15U.S.C.§77t(d~]andSection21(d)oftheExchangeAct[15U.S.C.§78u(d~].
Defendantshallsatis~’thisobligationbypaying$)o7~3ce~~tothe
SecuritiesandExchangeCommissionwithinthirty(30)daysafterentryofthis
FinalJudgment.
DefendantmaytransmitpaymentelectronicallytotheCommission,which
willprovidedetailedACHtransfer/Fedwireinstructionsuponrequest.Payment
mayalsobemadedirectlyfromabankaccountviaPay.govthroughtheSEC
websiteathttp://www.sec.gov/about/offices/ofm.htm.Defendantmayalsopayby
certifiedcheck,bankcashier’scheck,orUnitedStatespostalmoneyorderpayable
totheSecuritiesandExchangeCommission,whichshallbedeliveredormailedto
EnterpriseServicesCenter
AccountsReceivableBranch
6500SouthMacArthurBoulevard
OklahomaCity,OK73169
andshallbeaccompaniedbyaletteridentifyingthecasetitle,civilaction
3

Case1:20-cv-03164-TWTDocument25-1Piled03/12/21Page3of9
number,andnameofthisCourt;ClarenceDeanAlfordasadefendantinthis
action;andspecifyingthatpaymentismadepursuanttothisFinalJudgment.
Defendantshallsimultaneouslytransmitphotocopiesofevidenceof
paymentandcaseidentifyinginformationtotheCommission’scounselinthis
action.Bymakingthispayment,Defendantrelinquishesalllegalandequitable
right,title,andinterestinsuchfundsandnopartofthefundsshallbereturnedto
Defendant.
TheCommissionmayenforcetheCourt’sjudgmentfordisgorgementand
prejudgmentinterestbyusingallcollectionproceduresauthorizedbylaw,
including,butnotlimitedto,movingforcivilcontemptatanytimeafter30days
followingentryofthisFinalJudgment.
TheCommissionmayenforcetheCourt’sjudgmentforpenaltiesbytheuse
ofallcollectionproceduresauthorizedbylaw,includingtheFederalDebt
CollectionProceduresAct28U.S.C.§3001etseq.,andmovingforcivil
contemptfortheviolationofanyCourtordersissuedinthisaction.
Defendantshallpaypostjudgmentinterestonanyamountsdueafter30
daysoftheentryofthisFinalJudgmentpursuantto28U.S.C.§1961.The
Commissionshallholdthefunds,togetherwithanyinterestandincomeearned
thereon(collectively,the“Fund”),pendingfurtherorderoftheCourt.
TheCommissionmayproposeaplantodistributetheFundsubjecttothe
3

Case1:20-cv-03164-TWTDocument25-1Filed03/12/21Page4of9
Court’sapproval.SuchaplanmayprovidethattheFundshallbedistributed
pursuanttotheFairFundprovisionsofSection308(a)oftheSarbanes-OxleyAct
of2002.TheCourtshallretainjurisdictionovertheadministrationofany
distributionoftheFundandtheFundmayonlybedisbursedpursuanttoanOrder
oftheCourt.
RegardlessofwhetheranysuchFairFunddistributionismade,amounts
orderedtobepaidascivilpenaltiespursuanttothisJudgmentshallbetreatedas
penaltiespaidtothegovernmentforallpurposes,includingalltaxpurposes.To
preservethedeterrenteffectofthecivilpenalty,Defendantshallnot,afteroffset
orreductionofanyawardofcompensatorydamagesinanyRelatedInvestor
ActionbasedonDefendant’spaymentofdisgorgementinthisaction,arguethat
heisentitledto,norshallhefurtherbenefitby,offsetorreductionofsuch
compensatorydamagesawardbytheamountofanypartofDefendant’spayment
ofacivilpenaltyinthisaction(“PenaltyOffset”).IfthecourtinanyRelated
InvestorActiongrantssuchaPenaltyOffset,Defendantshall,within30daysafter
entryofafinalordergrantingthePenaltyOffset,notiPytheCommission’scounsel
inthisactionandpaytheamountofthePenaltyOffsettotheUnitedStates
TreasuryortoaFairFund,astheCommissiondirects.Suchapaymentshallnot
bedeemedanadditionalcivilpenaltyandshallnotbedeemedtochangethe
amountofthecivilpenaltyimposedinthisJudgment.Forpurposesofthis
3

Case1:20-cv-03164-TWTDocument25-1Piled03/12/21Page5of9
paragraph,a“RelatedInvestorAction”meansaprivatedamagesactionbrought
againstDefendantbyoronbehalfofoneormoreinvestorsbasedonsubstantially
thesamefactsasallegedintheComplaintinthisaction.
II.
ITISFURTHERORDERED,ADJUDGEDANDDECREEDthat
Defendantispermanentlyrestrainedandenjoinedfromviolating,directlyor
indirectly,Section10(b)oftheSecuritiesExchangeActof1934(the
“ExchangeAct”)[15U.S.C.~78j(b~]andRule1Ob-5promulgatedthereunder
[17C.F.R.s240.IOb-5],byusinganymeansorinstrumentalityofinterstate
commerce,orofthemails,orofanyfacilityofanynationalsecurities
exchange,inconnectionwiththepurchaseorsaleofanysecurity:
(a)toemployanydevice,scheme,orartificetodefraud;
(b)tomakeanyuntruestatementofamaterialfactortoomittostate
amaterialfactnecessaryinordertomakethestatementsmade,inthelightof
thecircumstancesunderwhichtheyweremade,notmisleading;or
(c)toengageinanyact,practice,orcourseofbusinesswhich
operatesorwouldoperateasafraudordeceituponanyperson
by,directlyorindirectly,(i)creatingafalseappearanceorotherwise
deceivinganyperson,or(ii)disseminatingfalseormisleadingdocuments,
materials,orinformationormaking,eitherorallyorinwriting,anyfalseor
3

Case1:20-cv-03164-TWTDocument25-1Filed03/12/21Page6of9
misleadingstatementinanycommunicationwithanyinvestororprospective
investor,about:
(A)anyinvestmentinorofferingofsecurities,
(B)theregistrationstatusofsuchofferingorofsuchsecurities,
(C)theprospectsforsuccessofanyproductorcompany,
(D)theuseofinvestorfunds;or
(E)theuseofinvestmentproceeds.
ITISFURTHERORDERED,ADJUDGED,ANDDECREEDthat,as
providedinFederalRuleofCivilProcedure65(dY2),theforegoingparagraph
alsobindsthefollowingwhoreceiveactualnoticeofthisJudgmentby
personalserviceorotherwise:(a)Defendant’sofficers,agents,servants,
employees,andattorneys;and(b)otherpersonsinactiveconcertor
participationwithDefendantorwithanyonedescribedin(a).
III.
ITISHEREBYFURTHERORDERED,ADJUDGED,AND
DECREEDthatDefendantispermanentlyrestrainedandenjoinedfrom
violatingSection17(a)oftheSecuritiesActof1933(the“SecuritiesAct”)[ii.
U.S.C.§77g(a~]intheofferorsaleofanysecuritybytheuseofanymeansor
instrumentsoftransportationorcommunicationininterstatecommerceorby
useofthemails,directlyorindirectly:
3

Case1:20-cv-03164-TWTDocument25-1Filed03/12/21Page7of9
(a)toemployanydevice,scheme,orartificetodefraud;
(b)toobtainmoneyorpropertybymeansofanyuntruestatement
ofamaterialfactoranyomissionofamaterialfactnecessaryin
ordertomakethestatementsmade,inlightofthecircumstances
underwhichtheyweremade,notmisleading;or
(c)toengageinanytransaction,practice,orcourseofbusiness
whichoperatesorwouldoperateasafraudordeceituponthe
purchaser
by,directlyorindirectly,(i)creatingafalseappearanceorotherwise
deceivinganyperson,or(ii)disseminatingfalseormisleadingdocuments,
materials,orinformationormaking,eitherorallyorinwriting,anyfalseor
misleadingstatementinanycommunicationwithanyinvestororprospective
investor,about:
(A)anyinvestmentinorofferingofsecurities,
(B)theregistrationstatusofsuchofferingorofsuchsecurities,
(C)theprospectsforsuccessofanyproductorcompany,
(D)theuseofinvestorfunds;or
(E)theuseofinvestmentproceeds.
3

Case1:20-cv-03164-TWTDocument25-1Filed03/12/21Page8of9
ITISFURTHERORDERED,ADJUDGED,ANDDECREEDthat,as
providedinFederalRuleofCivilProcedure~theforegoingparagraph
alsobindsthefollowingwhoreceiveactualnoticeofthisJudgmentbypersonal
serviceorotherwise:(a)Defendant’sofficers,agents,servants,employees,and
attorneys;and(b)otherpersonsinactiveconcertorparticipationwith
Defendantorwithanyonedescribedin(a).
Iv.
ITISFURTHERORDERED,ADJUDGED,ANDDECREEDthat
pursuanttoSection2l(d)(5)oftheExchangeAct[15U.S.C.~78u(d)(5)],
Defendantispermanentlyrestrainedandenjoinedfromdirectlyorindirectly,
including,butnotlimitedto,throughanyentityownedorcontrolledby
Defendant,participatingintheissuance,purchase,offer,orsaleofanysecurity,
provided,however,thatsuchinjunctionshallnotpreventDefendantfrom
purchasingorsellingsecuritieslistedonanationalsecuritiesexchangeforhis
ownpersonalaccounts.
ITISFURTHERORDERED,ADJUDGED,ANDDECREEDthat,as
providedinFederalRuleofCivilProcedure65(dY2),theforegoingparagraph
alsobindsthefollowingwhoreceiveactualnoticeofthisJudgmentbypersonal
serviceorotherwise:(a)Defendant’sofficers,agents,servants,employees,and
attorneys;and(b)otherpersonsinactiveconcertorparticipationwith

Case1:20-cv-03164-TWTDocument25-1Filed03/12/21Page9of9
Defendantorwithanyonedescribedin(a).
V.
ITISFURTHERORDERED,ADJUDGED,ANDDECREEDthatthis
Courtshallretainjurisdictionofthismatterforthepurposesofenforcingtheterms
ofthisFinalJudgment.
Dated:a~4q,-ct.~.2021
UnitedStatesDistrictJudge
2

Case 1:20-cv-03164-TWT Document 25-1 Filed 03/12121 Page 1 of 9

FlL~D IN CHAMBERS
THOMAS W. ThRASH JR.

~j ~ 0 c. Atlanta
UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF GEORGIA APR 02 2021
ATLANTA DIVISION JA~S.V~HA ,Clerk

SECURITIES AND EXCHANGE
COMMISSION,

Plaintiff,
Civil Action File No.
1 :20-cv-03164-TWT

v.

CLARENCE DEAN ALFORD,

Defendant,

FINAL JUDGMENT AGAINST DEFENDANT

CLARENCE DEAN ALFORD

The Commission has filed an Unopposed Motion for Final Judgment

Against Defendant Clarence Dean Alford (“Defendant”), requesting that the

Court order disgorgement, prejudgment interest and civil penalties against

Alford, and also restate permanent injunctive relief previously ordered by the

Court. Upon consideration of the Joint Motion, and in accordance with the

Consent Judgment previously agreed to by the parties, and being advised in

the premises,

3

Case 1:20-cv-03164-TWT   Document 26   Filed 04/02/21   Page 1 of 9



Case 1:20-cv-03164-TWT Document 25-1 RIed 03/12/21 Page 2 of 9

I.

IT IS HEREBY ORDERED, ADJUDGED AND DECREED that

Defendant is liable for disgorgement of $8,849,653, representing net profits

gained as a result of the conduct alleged in the Complaint, together with

prejudgment interest thereon in the amount of $1,751,085, and a civil penalty in

the amount of$ 7& 5’ pursuant to Section 20(d) of the Securities Act

[15 U.S.C. § 77t(d~] and Section 2 1(d) of the Exchange Act [15 U.S.C. § 78u(d~].

Defendant shall satis~’ this obligation by paying $)o 7~3 ce~~ to the

Securities and Exchange Commission within thirty (30) days after entry of this

Final Judgment.

Defendant may transmit payment electronically to the Commission, which

will provide detailed ACH transfer/Fedwire instructions upon request. Payment

may also be made directly from a bank account via Pay.gov through the SEC

website at http://www.sec.gov/about/offices/ofm.htm. Defendant may also pay by

certified check, bank cashier’s check, or United States postal money order payable

to the Securities and Exchange Commission, which shall be delivered or mailed to

Enterprise Services Center
Accounts Receivable Branch
6500 South MacArthur Boulevard
Oklahoma City, OK 73169

and shall be accompanied by a letter identifying the case title, civil action

3

Case 1:20-cv-03164-TWT   Document 26   Filed 04/02/21   Page 2 of 9



Case 1:20-cv-03164-TWT Document 25-1 Piled 03/12/21 Page 3 of 9

number, and name of this Court; Clarence Dean Alford as a defendant in this

action; and specifying that payment is made pursuant to this Final Judgment.

Defendant shall simultaneously transmit photocopies of evidence of

payment and case identifying information to the Commission’s counsel in this

action. By making this payment, Defendant relinquishes all legal and equitable

right, title, and interest in such funds and no part of the funds shall be returned to

Defendant.

The Commission may enforce the Court’s judgment for disgorgement and

prejudgment interest by using all collection procedures authorized by law,

including, but not limited to, moving for civil contempt at any time after 30 days

following entry of this Final Judgment.

The Commission may enforce the Court’s judgment for penalties by the use

of all collection procedures authorized by law, including the Federal Debt

Collection Procedures Act 28 U.S.C. § 3001 et seq., and moving for civil

contempt for the violation of any Court orders issued in this action.

Defendant shall pay post judgment interest on any amounts due after 30

days of the entry of this Final Judgment pursuant to 28 U.S.C. § 1961. The

Commission shall hold the funds, together with any interest and income earned

thereon (collectively, the “Fund”), pending further order of the Court.

The Commission may propose a plan to distribute the Fund subject to the

3

Case 1:20-cv-03164-TWT   Document 26   Filed 04/02/21   Page 3 of 9



Case 1:20-cv-03164-TWT Document 25-1 Filed 03/12/21 Page 4 of 9

Court’s approval. Such a plan may provide that the Fund shall be distributed

pursuant to the Fair Fund provisions of Section 308(a) of the Sarbanes-Oxley Act

of 2002. The Court shall retain jurisdiction over the administration of any

distribution of the Fund and the Fund may only be disbursed pursuant to an Order

of the Court.

Regardless of whether any such Fair Fund distribution is made, amounts

ordered to be paid as civil penalties pursuant to this Judgment shall be treated as

penalties paid to the government for all purposes, including all tax purposes. To

preserve the deterrent effect of the civil penalty, Defendant shall not, after offset

or reduction of any award of compensatory damages in any Related Investor

Action based on Defendant’s payment of disgorgement in this action, argue that

he is entitled to, nor shall he further benefit by, offset or reduction of such

compensatory damages award by the amount of any part of Defendant’s payment

of a civil penalty in this action (“Penalty Offset”). If the court in any Related

Investor Action grants such a Penalty Offset, Defendant shall, within 30 days after

entry of a final order granting the Penalty Offset, notiPy the Commission’s counsel

in this action and pay the amount of the Penalty Offset to the United States

Treasury or to a Fair Fund, as the Commission directs. Such a payment shall not

be deemed an additional civil penalty and shall not be deemed to change the

amount of the civil penalty imposed in this Judgment. For purposes of this

3

Case 1:20-cv-03164-TWT   Document 26   Filed 04/02/21   Page 4 of 9



Case 1:20-cv-03164-TWT Document 25-1 Piled 03/12/21 Page 5 of 9

paragraph, a “Related Investor Action” means a private damages action brought

against Defendant by or on behalf of one or more investors based on substantially

the same facts as alleged in the Complaint in this action.

II.

IT IS FURTHER ORDERED, ADJUDGED AND DECREED that

Defendant is permanently restrained and enjoined from violating, directly or

indirectly, Section 10(b) of the Securities Exchange Act of 1934 (the

“Exchange Act”) [15 U.S.C. ~ 78j(b~] and Rule 1 Ob-5 promulgated thereunder

[17 C.F.R. s 240. I Ob-5], by using any means or instrumentality of interstate

commerce, or of the mails, or of any facility of any national securities

exchange, in connection with the purchase or sale of any security:

(a) to employ any device, scheme, or artifice to defraud;

(b) to make any untrue statement of a material fact or to omit to state

a material fact necessary in order to make the statements made, in the light of

the circumstances under which they were made, not misleading; or

(c) to engage in any act, practice, or course of business which

operates or would operate as a fraud or deceit upon any person

by, directly or indirectly, (i) creating a false appearance or otherwise

deceiving any person, or (ii) disseminating false or misleading documents,

materials, or information or making, either orally or in writing, any false or

3

Case 1:20-cv-03164-TWT   Document 26   Filed 04/02/21   Page 5 of 9



Case 1:20-cv-03164-TWT Document 25-1 Filed 03/12/21 Page 6 of 9

misleading statement in any communication with any investor or prospective

investor, about:

(A) any investment in or offering of securities,

(B) the registration status of such offering or of such securities,

(C) the prospects for success of any product or company,

(D) the use of investor funds; or

(E) the use of investment proceeds.

IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that, as

provided in Federal Rule of Civil Procedure 65(dY2), the foregoing paragraph

also binds the following who receive actual notice of this Judgment by

personal service or otherwise: (a) Defendant’s officers, agents, servants,

employees, and attorneys; and (b) other persons in active concert or

participation with Defendant or with anyone described in (a).

III.

IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND

DECREED that Defendant is permanently restrained and enjoined from

violating Section 17(a) of the Securities Act of 1933 (the “Securities Act”) [ii.

U.S.C. § 77g(a~] in the offer or sale of any security by the use of any means or

instruments of transportation or communication in interstate commerce or by

use of the mails, directly or indirectly:

3

Case 1:20-cv-03164-TWT   Document 26   Filed 04/02/21   Page 6 of 9



Case 1:20-cv-03164-TWT Document 25-1 Filed 03/12/21 Page 7 of 9

(a) to employ any device, scheme, or artifice to defraud;

(b) to obtain money or property by means of any untrue statement

of a material fact or any omission of a material fact necessary in

order to make the statements made, in light of the circumstances

under which they were made, not misleading; or

(c) to engage in any transaction, practice, or course of business

which operates or would operate as a fraud or deceit upon the

purchaser

by, directly or indirectly, (i) creating a false appearance or otherwise

deceiving any person, or (ii) disseminating false or misleading documents,

materials, or information or making, either orally or in writing, any false or

misleading statement in any communication with any investor or prospective

investor, about:

(A) any investment in or offering of securities,

(B) the registration status of such offering or of such securities,

(C) the prospects for success of any product or company,

(D) the use of investor funds; or

(E) the use of investment proceeds.

3

Case 1:20-cv-03164-TWT   Document 26   Filed 04/02/21   Page 7 of 9



Case 1:20-cv-03164-TWT Document 25-1 Filed 03/12/21 Page 8 of 9

IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that, as

provided in Federal Rule of Civil Procedure~ the foregoing paragraph

also binds the following who receive actual notice of this Judgment by personal

service or otherwise: (a) Defendant’s officers, agents, servants, employees, and

attorneys; and (b) other persons in active concert or participation with

Defendant or with anyone described in (a).

Iv.

IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that

pursuant to Section 2l(d)(5) of the Exchange Act [15 U.S.C. ~ 78u(d)(5)],

Defendant is permanently restrained and enjoined from directly or indirectly,

including, but not limited to, through any entity owned or controlled by

Defendant, participating in the issuance, purchase, offer, or sale of any security,

provided, however, that such injunction shall not prevent Defendant from

purchasing or selling securities listed on a national securities exchange for his

own personal accounts.

IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that, as

provided in Federal Rule of Civil Procedure 65(dY2), the foregoing paragraph

also binds the following who receive actual notice of this Judgment by personal

service or otherwise: (a) Defendant’s officers, agents, servants, employees, and

attorneys; and (b) other persons in active concert or participation with

Case 1:20-cv-03164-TWT   Document 26   Filed 04/02/21   Page 8 of 9



Case 1:20-cv-03164-TWT Document 25-1 Filed 03/12/21 Page 9 of 9

Defendant or with anyone described in (a).

V.

IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that this

Court shall retain jurisdiction of this matter for the purposes of enforcing the terms

of this Final Judgment.

Dated: a~4q,-ct .~ .2021

United States District Judge

2

Case 1:20-cv-03164-TWT   Document 26   Filed 04/02/21   Page 9 of 9