Free Stipulation - District Court of Arizona - Arizona

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Guttilla & Murphy, PC
4150 West Northern Ave Phoenix, Arizona 85051 (623) 937-2795

Guttilla & Murphy, PC
Firm No. 00133300 Ryan W. Anderson (No. 020974) 4150 West Northern Ave. Phoenix, Arizona 85051 (623) 937-2795 [email protected]

Attorneys for the Receiver
Burton M. Bentley, Esq. (Bar No 00980) BURTON M. BENTLEY, P.C. 5343 North 16th Street, Suite 480 Phoenix, Arizona 85016 (602) 861-3055 (602) 861-3230 fax [email protected]

Attorneys for the Rada Defendants

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF ARIZONA Lawrence J. Warfield, Receiver, Plaintiff, v. Michael Alaniz, et al. Defendants. ) ) ) ) ) ) ) ) ) ) )

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Cause No. CV 03-2390 PHX JAT STIPULATED DESCRIPTION OF THE CASE

This case arises out of the sale of charitable gift annuities by the Mid-America Foundation. The Plaintiff in this case is a Federal Court Receiver who was appointed by the United States District Court to take control of Mid-America Foundation, an Arizona based company that sold the charitable gift annuities. Although the individual charitable gift annuity contracts varied somewhat, the purchasers of charitable gift annuities, called annuitants, made an irrevocable gift of cash, securities, or other assets to Mid-America, which in turn promised to periodically pay the annuitant a sum that incorporated a
Case 2:03-cv-02390-JAT Document 529 Filed 10/02/2006 Page 1 of 4

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Guttilla & Murphy, PC
4150 West Northern Ave Phoenix, Arizona 85051 (623) 937-2795

guaranteed rate of return. The guaranteed rate of return varied depending on the annuitant's age, the amount of the periodic payments, and the date the payments commenced. At the annuitant's death, Mid-America agreed to pay the remainder of the gift to charities designated by the annuitant. It is estimated that Mid-America sold a total of $54 million dollars of charitable gift annuities. Instead of the Mid-America Foundation investing the funds it raised from the sale of charitable gift annuities, the Mid-America Foundation used much of those funds to support the lavish lifestyle of the owner of the Mid-America Foundation. The Plaintiff has filed this lawsuit to recover the commissions which were paid to the sales agents of the Mid-America Foundation, ranging between 6% to 10% of the money raised. The Mid-America charitable gift annuities were sold through a nationwide network of commissioned sales agents who sold charitable gift annuities to elderly persons who sought safe steady income, tax benefits, and charitable donations. The Mid-America Foundation marketing materials and the charitable gift annuity agreements stated that the periodic payments under the agreements were the general obligations of Mid-America and that Mid-America's invested funds were placed in stocks, bonds, money market funds, and federal obligations. Investment materials provided by Mid-America Foundation described the charitable gift annuity as "the best way to protect and preserve your families' assets and perpetrate your favorite charity at the same time". Instead of investing annuitants' contributions into the Mid-America Foundation, Robert Dillie operated the Mid-America Foundation as a fraudulent Ponzi scheme.
Case 2:03-cv-02390-JAT Document 529

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Guttilla & Murphy, PC
4150 West Northern Ave Phoenix, Arizona 85051 (623) 937-2795

Robert Dillie spent annuitants' funds to support his life style and maintain the operations of the Mid-America Foundation. Robert Dillie's fraudulent acts caused the Mid-America Foundation to be unable to make the promised annuity payments to the Mid-America Foundation annuitants. In October 2001, the Mid-America Foundation abruptly closed its doors and informed its annuitants it would not make future annuity payments. In December, 2001, the United States Securities and Exchange Commission filed a lawsuit against Defendants Robert Dillie and the Mid-America Foundation, Inc. and sought the appointment of a Receiver over the Mid-America Foundation. The Receiver has acted as an agent of the United States District Court for the District of Arizona. The Receiver has collected assets for the benefit of the defrauded purchasers of charitable gift annuities of the Mid-America Foundation. The court-appointed Receiver for the Mid-America Foundation brought this underlying lawsuit to recover the commissions which were paid to the agents of the MidAmerica Foundation. Initially, the Receiver sought the recovery of commissions from one hundred forty-seven (147) sales agents. At the time of this trial, eleven (11) now remain. Robert Dillie, the principal of the Mid-America Foundation was convicted of money laundering and other criminal charges and sentenced to eleven (11) years in federal prison. He is still at large as a fugitive from justice. Respectfully submitted this 2nd day of October, 2006. GUTTILLA & MURPHY, PC s/Ryan W. Anderson Ryan W. Anderson Attorneys for the Receiver
Case 2:03-cv-02390-JAT Document 529

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Guttilla & Murphy, PC
4150 West Northern Ave Phoenix, Arizona 85051 (623) 937-2795

BURTON M. BENTLEY, P.C.

s/Burton M. Bentley Burton M. Bentley Attorneys for the Receiver

PROOF OF SERVICE

This is to certify that on this 2nd day of October, 2006, I electronically transmitted the foregoing document to the Clerk's Office using the CM/ECF System for filing and transmittal of a Notice of Electronic Filing to the CM/ECF registrants; and that the persons listed below are not registered participants of the CM/ECF System have been served with a copy of the foregoing document by first class mail this date.

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s/Ryan W. Anderson Ryan W. Anderson Steve A. Bryant Steve Bryant & Associates 3618 Mt. Vernon Street, Suite A Houston, TX 77006 Attorneys for Dwight Lankford Ren Bidwell 3430 Pacific Ave SE Olympia, WA 98501 Defendant Pro Se
0758-011(54984)

Case 2:03-cv-02390-JAT

Document 529

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