Free Brief - District Court of California - California

Case 3:07-cv-04762-PJH

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Filed 08/25/2008

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Edward O.C. Ord, Esq. (SBN 52123) Ord & Norman 233 Sansome Street, Suite 1111 San Francisco, CA 94104 Telephone: (415) 274-3800 Facsimile: (415) 274-3838 Attorneys for Defendants Charles Hsin and Optech Limited

UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF CALIFORNIA UNITED STATES OF AMERICA, Plaintiff, v. CHARLES CATHCART, SCOTT CATHCART, YURIJ DEBEVC, a/k/a YURI DEBEVC, ROBERT NAGY, DERIVIUM CAPITAL (USA), INC., VERIDIA SOLUTIONS, OPTECH LIMITED, CHIHSIU HSIN, a/k/a CHARLES HSIN, FRANKLIN THOMASON Defendants. __________________________________ Civil No. 07-4762-PJH

DECLARATION OF EDWARD O. C. ORD IN SUPPORT OF THE DEFENDANTS HSIN AND OPTECH LIMITED'S ADMINISTRATIVE MOTION PURSUANT TO LOCAL RULE 7-11 TO CONTINUE THE ENTIRE CASE MANAGEMENT SCHEDULE ORDER

I, EDWARD ORD, declare as follows: 20 1. 21 2. 22 by the continued enforcement of the current case management order entered near the beginning 23 of this case that gave the U.S. and the other defendants seven additional months that 24 Defendants CHARLES HSIN and OPTECH LIMITED (collectively "Defendants") are being 25 denied. 26 27 -128
DECLARATION OF EDWARD O.C. ORD IN SUPPORT OF THE ADMINISTRATIVE MOTION OF HSIN AND OPTECH LIMITED PURSUANT TO LOCAL RULE 7-11TO CONTINUE THE ENTIRE CASE MANAGEMENT SCHEDULING ORDER

I am a member in good standing of the Bar of this Court. The Defendants and their counsel have and continued to be severely prejudiced

Case 3:07-cv-04762-PJH

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3.

The Defendants received initial disclosures and, today, a small part of the

discovery from the U.S. that have been provided to the other defendants much earlier. Yet, prejudicial cutoffs with respect to the Defendants have resulted. 4. The Defendants have drafted, very meritorious, dispositive motions based on

mootness, certain constitutional grounds, estoppel, other new grounds and some narrow jurisdictional grounds. These motions will raise new issues and grounds in this civil action. 5. These motions have not been filed because the Defendants have been delayed

by promised, but not yet provided, needed declarations for various reasons. We anticipate this problem will be cured shortly so these motions can be filed with this Court. 6. Extensive discovery will be needed into the ways and means in which the IRS

initially obtained the information about the operation of the loan operation now complained of in this civil action. The discovery may result in the development of a basis for suppression and/or exclusion of evidence. In fact, grounds may result in the exclusion of almost all of the evidence presently relied on by the United States in this civil action. This will have to be developed by discovery. 7. Extensive depositions of numerous IRS officials and other persons will need to

be taken in any event with respect to the issues framed in this case. 8. Under the current enforcement of the scheduling order, Defendants cannot

evaluate the small part of discovery produced today and discovery that have yet to be provided from the U.S. and then engage in the necessary discovery in any area or helpful evidence that is buried in the IRS' investigative files. 9. Defendants are severely prejudiced because they have not been able to perform

discovery or have time to select experts after discovery is to be completed. Defendants will continue to incur prejudice. 10. Tax cases involving the 90% Stock Loan are winding through the Federal

Courts. The Court will have the benefit of these decisions if the continuances are granted. -2-

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DECLARATION OF EDWARD O.C. ORD IN SUPPORT OF THE ADMINISTRATIVE MOTION OF HSIN AND OPTECH LIMITED PURSUANT TO LOCAL RULE 7-11TO CONTINUE THE ENTIRE CASE MANAGEMENT SCHEDULING ORDER

Case 3:07-cv-04762-PJH

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11.

One Superior Court of California has previously granted summary judgment that

the marketing of the loan transactions, including the 90% Stock Loan transaction in issue in this civil action, were not the sale of securities but bona fide loans.

I declare under penalty of perjury that the foregoing is true and correct. Dated: August 25, 2008 By _/s/ Edward O.C. Ord_ Edward O.C. Ord
T:\Clients\7118\Motions\Motion to continue case management schedule order Ord decl.doc

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DECLARATION OF EDWARD O.C. ORD IN SUPPORT OF THE ADMINISTRATIVE MOTION OF HSIN AND OPTECH LIMITED PURSUANT TO LOCAL RULE 7-11TO CONTINUE THE ENTIRE CASE MANAGEMENT SCHEDULING ORDER

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CERTIFICATE OF SERVICE 1 I hereby certify that on August 25, 2008, I electronically filed the foregoing with the 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 -428
DECLARATION OF EDWARD O.C. ORD IN SUPPORT OF THE ADMINISTRATIVE MOTION OF HSIN AND OPTECH LIMITED PURSUANT TO LOCAL RULE 7-11TO CONTINUE THE ENTIRE CASE MANAGEMENT SCHEDULING ORDER

Clerk of the Court using the CM/ECF System which will send notification of such filing to the following: Joseph P. Russoniello United States Attorney Thomas Moore Assistant United States Attorney Chief, Tax Division 9th Floor Federal Building 450 Golden Gate Avenue, Box 36055 San Francisco, California 94102 Attorney for Plaintiff HUONG T. BAILIE Special Trial Attorney 160 Spear Street, 9th Floor San Francisco, California 94105 Attorney for Plaintiff Farley J. Neuman ([email protected]) Tom Prountzos ([email protected]) Jenkins Goodma Neuman & Hamilton LLP 417 Montgomery Street, 10th Floor San Francisco, California 94104 Attorneys for Defendant, Robert Nagy David Bujannoff Porter, Jr. ([email protected]) Wood & Porter 333 Sacramento Street San Francisco, California 94111 Attorney for Defendant Scott Cathcart Matthew Hicks ([email protected]) Daniel Rosenbaum ([email protected]) Caplin & Drysdale One Thomas Circle, NW, Suite 1100 Washington, D.C. 20005 Attorneys for Defendant Scott Cathcart Allyson B. Baker Trial Attorney, Tax Division U.S. Department of Justice Post Office Box 7238 Ben Franklin Station Washington, D.C. 20044 ([email protected]) Attorney for Plaintiff

ERIC L. WEBB BARTSCH & WEBB 9157 W. Sunset Blvd., Suite 310 Los Angeles, California 90069 ([email protected]) Attorney for Defendant Charles Cathcart

I further certify that on August 13, 2008, service of the foregoing was made upon the following by depositing a copy in the Unites States mail, postage prepaid: Yuri Debevc (pro se) 1483 Burningtree Road Charleston, SC 29412 /s/ Edward O.C. Ord____ EDWARD O.C. ORD