Federal Trade Commission v. MOBE Ltd., 6:18-cv-00862-RBD-DCI

Background

FTC sued MOBE and related defendants (including Matthew Lloyd McPhee) alleging a fraudulent online business-education scheme that defrauded consumers of over $125 million.
Court entered a TRO and appointed a Receiver; a stipulated preliminary injunction directed the Receiver to take custody of Receivership Entities’ assets and to institute or settle actions to preserve and recover assets.
Receiver identified foreign assets purchased with MOBE proceeds that he could not practically control without McPhee’s cooperation: two Kuala Lumpur apartments (7A and 15B), an interest in Serenity Island resort (Fiji), an interest in Sunset del Mar resort (Costa Rica), and tax-refund claims in Malaysia and Australia.
Receiver negotiated a settlement under which McPhee will execute transfer documents into escrow, permit sales or grant 270-day repurchase rights (with staged pricing), and remit specified portions of sale proceeds and tax refunds to the receivership.
Receiver explained foreign-law, title, and logistical obstacles (iTaukei lease rules in Fiji, Costa Rican maritime-zone constraints, unprofitable remote resorts) that make unilateral recovery costly and uncertain.
No party objected to the Motion; the magistrate recommended granting the Receiver’s amended motion as fair, reasonable, and in the best interest of the receivership given the unique circumstances.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Receiver’s authority to approve settlement	Receiver authorized by Preliminary Injunction to "institute, compromise, adjust" actions to preserve/recover assets	McPhee consents to settlement and will cooperate; no objection to Receiver’s authority	Court recommended approval; Receiver’s broad equitable discretion supports settlement authority
Fairness of settlement that permits repurchase rights to alleged ill-gotten assets	Settlement is fair because documents conveying title into escrow, potential immediate recovery, and avoiding costly foreign litigation benefits the estate	McPhee may retain repurchase rights to attempt to regain assets (seeking financing); settlement is negotiated, not guaranteed repurchase	Court found settlement fair, reasonable, and in receivership’s best interest given cost/risk of alternative recovery
Allocation of sale proceeds and tax refunds	Provides immediate and contingent monetary recovery (split formulas for Malaysian and Australian refunds; percentages and minimums for sales) to compensate estate and cover tax liabilities	McPhee retains modest amounts for accountants/expenses and shares upside per agreement	Court approved proceed splits and refund allocations as reasonable under circumstances
Whether unilateral foreign recovery is feasible or preferable	Foreign-title restrictions, potential defaults if Receiver acts, poor resort economics, and high litigation/administration costs make unilateral recovery impracticable	McPhee’s cooperation materially increases likelihood of recovery and commercial preservation	Court accepted Receiver’s factual assessment and approved settlement as pragmatic solution

Key Cases Cited

S.E.C. v. Elliott, 953 F.2d 1560 (11th Cir. 1992) (district court has broad powers and wide discretion in equity receivership)
Sterling v. Stewart, 158 F.3d 1199 (11th Cir. 1998) (fairness of receivership settlements is left to trial court’s sound discretion)