ORDER
DAVID C. GODBEY, District Judge.
This Order addresses various former Stanford employees’ (the “Employee Defendants”)
I. Origins op the Receiver’s Asset Recovery Action
This dispute arises out of the Securities and Exchange Commission’s (the “SEC”) ongoing securities fraud action against R. Allen Stanford, his associates, and various entities under Stanford’s control (the “Stanford Defendants”). As part of that litigation, this Court appointed a receiver (the “Receiver”) and authorized him to commence any actions necessary to recover assets of the Receivership Estate. See Second Am. Order Appointing Receiver, July 19, 2010 [1130] (the “Receivership Order”), in SEC v. Stanford Int’l Bank, Ltd., Civil Action No. 3.09-CV-0298-N (N.D.Tex. filed Feb. 17, 2009). Pursuant to those powers, the Receiver filed this action to recover approximately $760 million in alleged Stanford International Bank, Ltd. (“SIB”) certificate of deposit (“CD”) proceeds paid to certain Stanford investors (the “Investor Defendants”) and the Employee Defendants. See First Am. Compl. Against Certain Stanford Investors (the “Investor Complaint”) [128]; Investor Compl. App. [129]; Second Am. Compl. Against Former Stanford Employees (the “Employee Complaint”) [156]; Emp. Compl. App. [157].
The Receiver alleges that the Employee Defendants, through their work, furthered
II. The Court Has Jurisdiction Over the Receiver’s Claims and the Parties
Various Employee Defendants move to dismiss under Rule 12, almost exclusively arguing that the Receiver fails to state claims. As mandated by Fifth Circuit caselaw, however, the Court first addresses Defendant Crimmins’s contention that the Court lacks both subject matter and personal jurisdiction under Rules 12(b)(1) and (b)(2). See Ramming v. United States,
A. Subject Matter Jurisdiction Standard
“A case is properly dismissed for lack of subject matter jurisdiction when the court lacks the statutory or constitutional power to adjudicate the case.” Home Builders Ass’n of Miss., Inc. v. City of Madison,
B. The Court Has Subject Matter Jurisdiction
Crimmins proceeds pro se, and the Court liberally construes his objections. Even liberally construed, however, Crimmins’s subject matter jurisdiction argument consists of a conclusory statement that “the Receiver has ... failed to establish subject matter jurisdiction.” Crimmins’s Mot. to Dismiss and Answer at 2[488]. Crimmins does “admit[] that as the Court that appointed the Receiver, this Court may have jurisdiction over any claim brought by the Receiver to execute his Receivership duties.” Id. at 3. The Court therefore construes Crimmins’s argument as one directed at the Receiver’s standing given parallel liquidation proceedings in Antigua, a contention raised in this case primarily by Investor Defendants. The Receiver lacks standing to prosecute this action, the argument goes, because he stands in SIB’s shoes, and SIB is a foreign entity subject to the jurisdiction of Antiguan courts and regulatory entities. Because those authorities have placed SIB in
To the extent Crimmins makes this argument, it depends on a cramped interpretation of the Receiver’s authority. In denying the Employee Defendants’ motions to compel arbitration, the Court adopted the Fifth Circuit’s withdrawn arbitrability ruling in Janvey v. Alguire,
C. The Court Has Personal Jurisdiction over Crimmins and any Property in His Custody or Control Traceable to the Receivership Estate
Crimmins also “moves that the Receiver’s complaint be dismissed for lack of personal jurisdiction.” Crimmins’s Mot. to Dismiss and Answer at 2. Specifically, he “denies that this Court has in rem or in personam jurisdiction over [him]” and argues “that venue is not proper in this Court.” Id. at 3. The Court disagrees.
The Court has personal jurisdiction over Crimmins and any assets in his possession potentially traceable to the Receivership Estate for two reasons. First, Crimmins resides in Houston, Texas, and admits that he worked for SGC in Houston. The portion of the Receivership Estate allegedly in his possession, then, presumably may also be found in Houston. Accordingly, the Court has personal jurisdiction based on Crimmins’s presence in the forum state. See, e.g., Religious Tech. Ctr. v. Liebreich,
Second, applicable statutes permit the nationwide exercise of personal jurisdictiоn in actions to recover receivership assets. As a general matter, courts have consistently held that minimum contacts analysis does not apply to receivership actions. See, e.g., Haile v. Henderson Nat’l Bank,
Section 754 and 28 U.S.C. § 1692 provide the appropriate statutory authority for the Court’s exercise of personal jurisdiction in this case. By allowing a receiver and district court to exercise jurisdiction over purported reсeivership estate property, section 754 serves “as a stepping stone on [a court’s] way to exercising in person-am jurisdiction” over those persons having custody or control over the property at issue. Vision Commc’ns,
Under this standard, the Court has personal jurisdiction over Crimmins. The Receiver acted pursuant to his duties under the Receivership Order and section 754 and filed the appropriate documents in the Southern District of Texas. In doing so, he obtained both in rem jurisdiction over Receivership Estate property in Grimmins’s custody or control and the ability to serve process in the Southern District of Texas under the nationwide service provisions of section 1692. The Receiver subsequently filed this action to recover Receivership Estate assets Crimmins allegedly received through his association with the Stanford Defendants’ scheme. Thus, the appropriate due process inquiry concerns whether the Receiver properly served Crimmins with process. Given the Receiver’s compliance with section 754, he could effectuаte service of process under section 1692 in the district in which Crimmins resides and conducts business. This satisfies due process in the receivership context. See Haile,
III. The Receiver States Valid Claims
Various Employee Defendants also object under Rule 12(b)(6), arguing that the Receiver fails to state fraudulent transfer and unjust enrichment claims.
When faced with a Rule 12(b)(6) motion to dismiss, the Court must determine whether the plaintiff has asserted a legally sufficient claim for relief. Blackburn v. City of Marshall,
As the Supreme Court recently observed:
Two working principles underlie our decision in Twombly. First, the tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions. Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice. [Twombly, 550 U.S.] at 555,127 S.Ct. 1955 (Although for the purposes of a motion to dismiss we must take all of the factual allegations in the complaint as true, we “are not bound to accept as true a legal conclusion couched as a factual allegation” (internal quotation marks omitted)). Rule 8 marks a notable and generous departure from the hyper-technical, code-pleading regime of a prior era, but it doеs not unlock the doors of discovery for a plaintiff armed with nothing more than conclusions. Second, only a complaint that states a plausible claim for relief survives a motion to dismiss. Id. at 556,127 S.Ct. 1955 . Determining whether a complaint states a plausible claim for relief will, as the Court of Appeals observed, be a context-specific task that requires the reviewing court to draw on its judicial experience and common sense. [Iqbal v. Hasty,]490 F.3d 143 , 157-158 [(2d Cir. 2007)]. But where the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged — but it has not “showfn]” — “that the pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2).
In keeping with these principles a court considering a motion to dismiss can choose to begin by identifying pleadings that, because they are no more than conclusions, are not entitled to the assumption of truth. While legal conclusions can provide the framework of a complaint, they must be supported by factual allegations. When there are well-pleaded factual allegations, a court should assume their veracity and then determine whether they plausibly give rise to an entitlement to relief.
Iqbal,
In ruling on a Rule 12(b)(6) motion, a court generally limits its review to the face of the pleadings, accepting as true all well-pleaded facts and viewing them in the light most favorable to the plaintiff. Spivey v. Robertson,
B. The Receiver States a Fraudulent Transfer Claim
1. The Court Applies Texas Law. — The Receiver sufficiently identifies TUFTA as the “applicable fraudulent
Moreover, “the failure to provide adequate proof [of choice of law] ... results in a presumption that the law of the foreign jurisdiction is identical to the law of Texas.” Pittsburgh Corning Corp. v. Walters,
Finally, the Court looks to Tеxas law because at this juncture TUFTA effectively has become law of the case. The Court’s preliminary injunction applied TUFTA [456], and the Fifth Circuit accepted the Receiver’s assertion that TUF-TA supplied the relevant “ ‘standards ... [of] substantive law.’ ” Alguire,
2. The Receiver’s TUFTA Claim Satisfies Rule 12(b)(6). — In general, TUFTA operates to void certain fraudulent “transfers,” which the statute defines in relevant part as “every mode, direct or indirect, absolute or conditional, voluntary or involuntary, of disposing of or parting with an asset or an interest in an asset, and includes payment of money.” Tex. Bus. & Com.Code § 24.002(12). TUFTA considers several types of transfers to be fraudulent. See id. §§ 24.005(a) (three types); 24.006 (two types). Because the Receiver alleges that the “Stanford Defendants transferred the CD Proceeds to the [Employee Defendants] with actual intent to hinder, delay, or defraud their creditors,” Employee Compl. at 12, his claim concerns fraudulent transfers under section 24.005(a)(1).
Section 24.005(a)(1) provides that a transfer “is fraudulent as to a creditor, whether the creditor’s claim arose before or within a reasonable time after the transfer was made or the obligation was incurred, if the debtor made the transfer or incurred the obligation ... with actual intent to hinder, delay, or defraud any creditor of the debtor.” “In determining [a debtor’s] actual intent,” courts may consider, “among other factors[,] ... whether ... the value of the consideration received by the debtor was reasonably equivalent to
The Fifth Circuit considers a Ponzi scheme to be, “ ‘as a matter of law, insolvent from its inception.’ ” Alguire,
A [P]onzi scheme is a scheme whereby a corporation operates and continues to operate at a loss. The corporation gives the appearance of being profitable by obtaining new investors and using those investments to pay for the high premiums promised to earlier investors. The effect of such a scheme is to put the corporation farther and farther into debt by incurring more and more liability and to give the corporation the false appearance of profitability in order to obtain new investors.
Alguire,
For defendants facing a section 24.005(a)(1) “actual intеnt” claim, TUFTA provides a statutory defense if the defendants “took in good faith and for a reasonably equivalent value.” Tex. Bus. & Com.Code § 24.009(a). A transferee invoking this defense has the burden to show both objective good faith and the exchange of reasonably equivalent value. See, e.g., Hahn v. Love,
The Receiver states a TUFTA claim. He alleges that the Stanford Defendants operated a Ponzi scheme, pleading the actual-intent-to-defraud element necessary to state a claim under section 24.005(a)(1). See Employee Compl. at 6-9. The Receiver also contends that “CD Proceeds from the fraudulent Ponzi scheme ... were transferred by the Stanford Defendants to the [Employee Defendаnts] solely for the purpose of concealing and perpetuating the fraudulent scheme” and “were paid to the [Employee Defendants] from funds supplied by investors who bought the fraudulent CDs.”
C. The Receiver States That He Is Entitled to Unjust Enrichment Disgorgement
“Unjust enrichment is an equitable principle holding that one who receives benefits unjustly should make restitution for those benefits,” regardless of whether the defendant engaged in wrongdoing. Texas Integrated Conveyor Sys., Inc. v. Innovative Conveyor Concepts, Inc.,
Although various Employee Defendants characterize the Receiver’s alternative claim as one for unjust enrichment — and, indeed, the Receiver notes he amended his complaint to add “unjust-enrichment claims,” Employee Compl. at 4, 5 — the Receiver more properly pleads unjust enrichment as an equitable doctrine that entitles him to disgorgement pursuant to unspecified “applicable law.” Employee Compl. at
Given this varied authority, the Receiver’s failure to identify the specific cause of action that provides an unjust enrichment remedy is not fatal to his alternative claim. Texas courts have read claims for “unjust enrichment” as pleading an equitable common law claim for money had and received. See, e.g., London v. London,
Regardless of whether Texas law allows an “unjust enrichment” claim or requires pleading a claim for money had and received, the Receiver states claims under either “applicable law.” Employee Compl. at 15. The Receiver alleges that “[t]he Stanford Defendants kept their fraudulent scheme going by employing the [Employee Defendants] to lure new investors and then divert the investors’ funds for the Stanford Defendants’ own illicit purposes.” Id. at 2. Because the sale of SIB CDs allegedly “generated substantially all of the income for the Stanford Defendants and the many related Stanford entities,” id. at 1, the “CD Proceeds paid to the [Employee Defendants] came not from revenue generated by legitimate business activities, but from monies contributed by defrauded investors.” Id. at 2. Thus, according to the Receiver, the Employee Defendants’ compensation effectively constituted “little more thаn stolen money” properly belonging to the Stanford Defen
IV. The Receiver Complies With Rules 8 and 9
A. The Receiver States Claims Under Rule 8(a)
Various Employee Defendants raise Rule 8(a) objections to the Employee Complaint. They almost exclusively argue that the Receiver has failed to sufficiently identify both claims for relief and the state providing the appropriate choice of law. See Fed. R. Civ. P. 8(a). Rule 8(a) requires a complaint to make “(1) a short and plain statement of the grounds for the court’s jurisdiction, unless the court already has jurisdiction and the claim needs no new jurisdictional support; (2) a short and plain statement of the claim showing that the pleader is entitled to relief; and (3) a demand for the relief sought, which may include relief in the alternative or different types of relief.”
As the Receivership Court, this Court has subject matter jurisdiction over the Receiver’s ancillary asset recovery actions. The Court has already determined that the Receiver brings Texas law claims that satisfy Rule 12(b)(6). And, the Receiver explicitly asks for multiple, specific forms of relief, including disgorgement. See Employee Compl. at 22-24. Accordingly, the Employee Complaint satisfies Rule 8(a)’s pleading requirements.
B. The Receiver Pleads in Compliance with Rule 9(b)
The final objection raised by some Employee Defendants contends that the Employee Complаint fails to meet the heightened pleading requirements of Rule 9(b). These Employee Defendants generally argue that, even in the context of fraudulent transfer claims against nonparties to the Ponzi scheme, the Receiver must specify the “ ‘who, what, when, where, and how of the alleged fraud.” See, e.g., Defendant Razvi’s Mot. to Dismiss at 2-3 (citation omitted) [427]. Additionally, the Employee Defendants believe the Employee Complaint fails because, essentially, it does not catalogue the specific transactions subject to its allegations.
The parties provide no controlling Fifth Circuit authority that applies a heightened pleading requirement to TUFTA claims. The issue appears to be an open question in the Fifth and some other circuits. See, e.g., Biliouris,
“[T]he Court can find no principled reason for applying Rule 9’s pleading requirements to ... the Receiver’s fraudulent transfer claims” for the same reasons given by the Wing Court. Wing,
[tjhere is no allegation that the [defendant committed any act of fraud; indeed, the defendant’s conduct is simply not an element of the Receiver’s claim. Furthermore, the Court finds that the distinction between intentional fraudulent transfer and constructivе fraudulent transfer claims drawn by other courts addressing the applicability of Rule 9 to fraudulent transfer cases is not helpful in Ponzi scheme cases in which “actual intent” can be inferred by virtue of the transferor’s insolvency as a matter of law. Finally, the Court finds that this inference of fraudulent intent applies to all transfers from a Ponzi scheme, regardless of the defendant’s characterization of them as ordinary business transactions.
Id.
This conclusion comports with a fairly recent Northern District of Texas TUFTA case. See GE Capital Commercial, Inc. v. Wright & Wright, Inc.,
Even if it did, the Court finds that the Employee Complaint alleges fraud with sufficient particularity to avoid dismissal. The Receiver has provided the Employee Defendants sufficient notice of the time period in which he believes the transfer of fraudulently-obtained funds occurred — during the time the Stanford Defendants and related entities employed the Employee Defendants. Assuming, as the Court must, that the factual allegations in the Employee Complaint are true: The Stanford Defendants operated a Ponzi scheme that the Employee Defendants furtherеd, albeit unwittingly, with their work. Because the scheme had few, if any, business components untouched by the sale of fraudulent investment vehicles, the Employee Defendants necessarily received compensation in the form of funds derived from unsuspecting investors’ cash infusions into the Ponzi scheme. This makes the Employee Defendants’ compensation assets that are potentially traceable to the Receivership Estate. The Receiver asserts that the Employee Defendants therefore hold and control — or previously disposed of — proceeds that are traceable to the Receivership Estate. And, the Receiver identifies the specific amount of CD Proceeds-related compensation еach Employee Defendant is alleged to have received. See Employee Compl. App. Accordingly, the Receiver has apprised the Employee Defendants of- a sufficiently “substantial amount of particularized information about [his] claim in order to enable [them] to understand it and effectively prepare a responsive pleading and an overall defense of the action[].” 5A Charles Alan Wright & Arthur R. Miller, Federal Practice & Procedure § 1296 at 39 (3d ed.2004).
Conclusion
In this action, the Receiver represents creditors defrauded by the Stanford Defendants’ scheme in their recovery efforts.
Notes
. The more-than 300 Employee Defendants are listed in the appendix to the Receiver’s second amended complaint against former Stanford employees [157],
. Some of the Employee Defendants’ motions contain both motions to compel arbitration and motions to dismiss. The Court previously denied the motions to compel arbitration. See Order of Aug. 26, 2011 [688].
. Query whether courts should continue to conduct this old-school Rule 12(b)(6)-like analysis in light of the Supreme Court’s decisions in Twombly and Iqbal. See Bell Atl. Corp. v. Twombly,
. Section 1692 provides: “In proceedings in a district court where a receiver is appointed for property, real, personal, or mixed, situated in different districts, process may issue and be executed in any such district as if the property lay wholly within one district, but orders affecting the property shall be entered of record in each of such districts."
. As the Receivership Court, this Court is also the proper venue for this action.
. Section 24.009(a) also prohibits recovery "against any subsequent transferee or obligee.”
. Because no Supreme Court of Texas cases address the requisite mental state for a transferee-defendant under TUFTA, the Fifth Circuit in Schonsky made its best “Erie guess” as to the proper construction of the statute.
. The Receiver need not identify the specific transfers. As pled, the Rеceiver implicates all transfers from the scheme to the Employee Defendants made in the form of "salaries[,] Loans, SIB[] CD commissions, SIB[] Quarterly Bonuses, Performance Appreciation Rights Plan ("PARS”) Payments; Branch Managing Director Quarterly Compensation, and Severance Payments.” Employee Compl. at 2. Cf. Alguire,
The Employee Defendants also argue that the district court erred in grouping all the transactions rather than examining evidence of claims against individuals. Contrary to the Employee Defendants' assertion, the district court found that the Receiver came forward with "competent evidence that each individual [Employee Defendant] received transfers of money representing CD sale proceeds from the Stаnford Ponzi scheme.” We agree,
(quoting Prelim. Inj.).
. Based on the parties’ choice-of-laws showing on the Receiver’s fraudulent transfer claims, the Court applies Texas law to the Receiver's alternative claim.
. Courts also have wide latitude in considering a claim for money had and received. See Staats,
. The Court also does not require the Receiver to replead under either specific theory. Cf. Boyles v. Kerr,
. The Court has already addressed this Rule 8(a)- and 12(b)(6)-like argument. As the Court noted above, the Receiver’s claims implicate nearly every transfer the Employee Defendants received from the Stanford Defendants. See supra note 8.
. The GE Capital decision reached a different result on different facts than аn earlier opinion by the same judge in Quilling, which held that Rule 9(b) applied to TUFTA claims. See Quilling,
As suggested by the Brunswick Court’s reference to "specific acts of fraud,” however, that case provides limited guidance here. The Brunswick plaintiff alleged that the defendants there directly engaged in fraudulent conduct — conspiring to effect transfer of the plaintiff's bowling equipment to a corporation under the defendants’ control. See
. See Perlman v. Five Corners Investors I, LLC,
The cases holding that Rule 9(b) does apply to UFTA claims tend to cite two cases from the Second and Seventh Circuits, In re Sharp and General Electric. See, e.g., Indiana Bell,
. The same reasoning applies to the Receiver's unjust enrichment claim. That claim also does not depend on the Employee Defendants having engaged in fraudulent conduct and instead focuses simply on whether the Employee Defendants received a benefit that “would be unconscionable to retain.” Texas Integrated,