605 F. App'x 361
5th Cir.2015Background
- SEC sued Marco Ramirez alleging EB-5 securities fraud; Ramirez ran USA Now and solicited $500,000 investments allegedly promised to be held in escrow but instead misused.
- Court entered an ex parte temporary restraining order and receivership, requiring Ramirez to account for and turn over assets to a receiver; assets were frozen by preliminary injunction.
- Receiver’s accountant reported a $500,000 refund check to an investor (Ms. Gonzalez) without any corresponding deposit; Ramirez’s notes referenced receipt of $500,000 in a Dillard’s bag.
- District court issued a turnover order requiring Ramirez to return the $500,000 to the receiver and held an order to show cause for contempt if he failed to comply.
- Ramirez refused to turn over the funds or disclose their location, was held in civil contempt, jailed 30 days, and sought mandamus relief from the Fifth Circuit.
- After additional evidentiary hearings (and a stay), the Fifth Circuit reviewed whether mandamus was appropriate and whether the turnover order met the clear-and-convincing standard.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Validity of turnover order (evidence standard) | SEC: turnover may be ordered; turnover supported by evidence showing Ramirez received the $500,000 and it belonged to the estate | Ramirez: turnover order lacked clear-and-convincing proof that he possessed the $500,000 at receivership start | Court: turnover order was supported by clear-and-convincing evidence; mandamus denied |
| Admissibility/striking of affidavits | SEC: affidavits were properly handled; issues were waived or stipulate | Ramirez: district court refused to strike two affidavits and denied right to cross-examine affiants | Court: Ramirez never moved to strike and in fact introduced/accepted stipulations; argument rejected |
| Fifth Amendment (self-incrimination) | Ramirez: contempt punishes assertion of Fifth Amendment privilege; proceedings infringe due process | SEC: contempt penalizes failure to turn over property, not assertion of privilege; defendant must prove inability to comply even if that requires testimony | Court: Rylander controls; privilege does not excuse burden to produce evidence of impossibility; argument foreclosed |
| Mandamus availability | Ramirez: mandamus should issue because underlying order was invalid and contempt improper | SEC/receiver: alternative remedies inadequate for interlocutory relief; district court did not err clearly and indisputably | Court: mandamus denied because petitioner failed to show clear and indisputable right to writ |
Key Cases Cited
- Cheney v. U.S. Dist. Court for D.C., 542 U.S. 367 (extraordinary writ standards for mandamus)
- Oriel v. Russell, 278 U.S. 358 (clear-and-convincing standard for turnover in equity/bankruptcy contexts)
- United States v. Rylander, 460 U.S. 752 (defendant in contempt must produce evidence of inability to comply despite Fifth Amendment claim)
- ITT Cmty. Dev. Corp. v. Barton, 569 F.2d 1351 (order of civil contempt invalid if underlying order is invalid)