Free Motion for Disbursement of Funds - District Court of Colorado - Colorado

Case 1:04-cv-01267-WYD

Document 24

Filed 02/06/2006

Page 1 of 3

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO : : : Plaintiff, : : vs. : : Augustine M. Cruciotti, : : Defendant. : ____________________________________: Securities and Exchange Commission,

Civil Action No. 04-D-1267(MJW)

MOTION TO DISBURSE FUNDS TO PAY FEES OF TAX ADMINISTRATOR

The Securities and Exchange Commission respectfully requests that the Court enter an Order for the Clerk of the Court to disburse funds on deposit with the registry of the Court to pay certain fees of the Tax Administrator of the Distribution Fund in this case. 1. For the 2004 tax reporting period, the Commission has filed two settled actions in this

District Court arising from the Commission's financial fraud investigation of Qwest Communications International Inc. ("Qwest") that have resulted in funds being deposited in a Fair Fund pursuant to Section 308 of the Sarbanes-Oxley Act of 2002 for future distribution to aggrieved investors (the "Distribution Fund").1 The defendants paid all amounts in the Distribution Fund to the Clerk of the Court, who then deposited the funds with the Court Registry Investment System ("CRIS") in an interest bearing account, account number 1:04-CV001267, under the case name designation "SEC v. Augustine M. Cruciotti."

1

The Commission has filed three additional settled actions in federal court (Roger B. Hoaglund (05-N-482), William L. Eveleth (05-M-481) and Gregory M. Casey (05-CV-480) that have also resulted in payments made to the Distribution Fund. These additional payments occurred during the 2005 tax period, and are therefore not relevant to this motion.

Case 1:04-cv-01267-WYD

Document 24

Filed 02/06/2006

Page 2 of 3

2.

First, by order dated June 21, 2004, the Court entered Final Judgment as to Defendant

Augustine M. Cruciotti pursuant to Rule 54(b) of the Federal Rules of Civil Procedure. Pursuant to the Final Judgment, on June 23, 2004, defendant Cruciotti paid a $150,000 penalty into the Distribution Fund. Pursuant to the Final Judgment, on July 27, 2004, defendant Cruciotti paid a total of $204,967 in disgorgement and prejudgment interest into the Distribution Fund. 3. Second, by order dated December 3, 2004, the Court entered Final Judgment as to

Defendant Qwest (04-D-2179) pursuant to Rule 54(b) of the Federal Rules of Civil Procedure. Pursuant to the Final Judgment, on December 6, 2004, defendant Qwest paid a total of $125,000,001 in disgorgement and penalty into the Distribution Fund. Pursuant to the Final Judgment, on December 31, 2005, defendant Qwest will pay an additional $125,000,000 in penalty to the Distribution Fund. 4. By order dated June 8, 2005, the Court entered an order appointing Damasco &

Associates to fulfill the tax obligations of the Distribution Fund. Pursuant to that Order, the Tax Administrator is required to pay taxes in a manner consistent with treatment of the Distribution Fund as a Qualified Settlement Fund, and is to be compensated for the tax services provided. 5. For the tax year ended December 31, 2004, the Tax Administrator has incurred fees of

$1,500 for tax services provided to the Distribution Fund. The funds shall be distributed from the earnings of the Distribution Fund. See Declaration of Tax Administrator attached as Exhibit A. 6. The Declaration had been reviewed by the undersigned Commission counsel who has no

objections. 7. The Commission has provided copies of this Motion and proposed Order to counsel for

all defendants who have paid monies into the Distribution Fund. The Commission asked counsel 2

Case 1:04-cv-01267-WYD

Document 24

Filed 02/06/2006

Page 3 of 3

for those defendants to communicate any objection to this Motion to the Commission's undersigned counsel. At the time of filing this Motion, counsel for the Commission has not received any objections to its request to pay taxes. WHEREFORE, for all the foregoing reasons, the Commission respectfully requests that this Court enter the attached proposed Order and grant such other relief as it deems just and proper. Dated: February 6, 2006 Respectfully submitted,

/s/ Mary S. Brady________ Mary S. Brady Securities and Exchange Commission 1801 California Street, Suite 1500 Denver, CO 80202 Phone: (303) 844-1000 Fax: (303) 844-1010 E-mail: [email protected] Attorney for Plaintiff

3