North Dakota Developments (NDD) which sold North American hotel room investments to Southeast Asian overseas property investors, has been placed in receivership.
During a hearing on Monday, Judge Hovland granted the United States Securities and Exchange Commission’s (SEC) motion for a preliminary injunction and appointed a receiver. The preliminary injunction is an extension of the earlier temporary restraining order that, until a final judgement, the men behind NDD, Robert Gavin and Daniel Hogan, cannot operate any part of their company.
The asset freeze includes company bank accounts in the U.S., the U.K. and Malaysia.
At its height, NDD opened offices in Singapore and Malaysia, and was a regular attendee at overseas property exhibitions in the city-state and throughout Asia. As much as S$10 million may have been invested with the British-based company by investors in Singapore, Malaysia and elsewhere in Asia, although that figure could well be higher.
Lawyer Brenda Hamilton, who has been action for many investors around the world, wrote: “In the course of the scam, Gavin and Hogan relieved investors of more than US$62 million. The pair persuaded their victims, many of them elderly and vulnerable, to purchase interests in “units” at what are called “man camps” – workers’ housing – in properties to be built in the Bakken oil fields of North Dakota and Montana.”
She added that the interests purchased were not actual real estate, but securities, and the SEC therefore had jurisdiction.
Earlier in May the SEC obtained a temporary restraining order against the company and Judge Daniel Hovland ordered the asset freeze of the defendants’ bank accounts and those of other companies they controlled.
On Monday he granted the SEC’s motion for a preliminary injunction and appointed Gary Hansen, who has acted as receiver in a number of prominent Federal cases, as receiver in the NDD case.
His job will be to preserve the status quo, as well as to determine the true financial condition of NDD, Gavin, Hogan and the other defendants, and to ensure that relevant books and records remain intact and unchanged.
His job will also be to locate all assets and property owned by the defendants, and he will have exclusive control over accounts held by the defendants or their nominees at any bank, brokerage firm or financial institution.
Hansen will also prepare a list of those assets that he will submit to the court, along with a list of creditors and a preliminary plan for the administration of the receivership estate.
Hamilton added: “The appointment of the receiver ensures that Gavin and Hogan cannot alter evidence or use any of the frozen assets for their own purposes.
“Ultimately, the funds recovered will be used to pay creditors and compensate victims.”
Hamilton, who is acting for some investors from Southeast Asia can be reached by email through info@securitieslawyer101.com.
Andrew Batt, International Group Editor of PropertyGuru Group, wrote this story. To contact him about this or other stories email andrew@propertyguru.com.sg
