Kristine M. Larsen (9228) Jascha K. Clark (16019) Brittany ... · (Docket No. 107). The SEC...

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Kristine M. Larsen (9228)

Jascha K. Clark (16019)

Brittany J. Merrill (16104)

RAY QUINNEY & NEBEKER P.C.

36 South State Street, 14th

Floor

P.O. Box 45385

Salt Lake City, Utah 84145-0385

Telephone: (801) 532-1500

Facsimile: (801) 532-7543

E-mail: [email protected]



Attorneys for Receiver, Maria E. Windham

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF UTAH

SECURITIES AND EXCHANGE

COMMISSION,

Plaintiff,

vs.

MARQUIS PROPERTIES, LLC, a Utah

Limited Liability Company, CHARD

DEUCHER, an individual, and RICHARD

CLATFELTER, an individual,

Defendants,

JESSICA DEUCHER, an individual,

Relief Defendant

And

HODGES HOLDING, LLC, and U.S. BANK

NATIONAL ASSOCIATION,

Intervenors.

RECEIVER’S FIFTH

STATUS REPORT

Case No. 2:16-cv-00040-JNP

Judge: Hon. Jill N. Parrish

Case 2:16-cv-00040-JNP Document 228 Filed 04/30/18 of 21

mailto:[email protected]



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Maria E. Windham, the Court-appointed receiver (the “Receiver”), acting through

counsel Ray Quinney & Nebeker, P.C., respectfully submits this Fifth Status Report concerning

the operation of the receivership through March 31, 2018.

A. SUMMARY OF THE OPERATIONS OF THE RECEIVER

1. Background Concerning Receivership Defendants

On January 19, 2016, the Securities and Exchange Commission (“SEC”) filed suit against

Chad Deucher (“Deucher”) and Marquis Properties, LLC (“Marquis”) (the “Defendants”) and

others, alleging they were involved in an “ongoing offering fraud and Ponzi scheme.” On the

motion of the SEC, the Court entered an asset freeze on January 20, 2016 (the “Asset Freeze

Order”) that required that all assets and books and records of the Defendants be preserved and

frozen from further disposition.

In 2016, Deucher was also criminally indicted for the federal crime of securities fraud.

Deucher executed a Statement by Defendant in Advance of Plea of Guilty and Plea Agreement in

his federal criminal case, which was accepted by the Court, on April 19, 2017, following which

he remained in custody pending sentencing. As part of the factual statement in support of his

guilty plea, Deucher admitted that “beginning in and around March of 2010 and continuing to

around February of 2016,” he “solicited approximately 170 investors to invest approximately

$16,000,000 in various real-estate based securities offerings secured with promissory notes.”

United States v. Deucher, Case No. 2:16-CR-189-DN, Docket No. 50 (Statement of Defendant in

Advance of Plea of Guilty and Plea Agreement Pursuant to Fed. R. Crim. P. 11(c)(1)(C) Report


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dated April 19, 2017.)1 Deucher further admitted that “in relation to those investments, without

authority or knowledge of the investors, I used investor funds to pay other investors and I used

the money for my own personal benefit and living expenses.” (Id.)

Deucher was briefly released from incarceration prior to sentencing on or about July 10,

2017, as a result of his Motion for Review of Detention. (Fed. Crim. Dkt. at 44, 58, & 61.) He

was subsequently arrested and charged with driving under the influence of drugs and alcohol,

and Magistrate Judge Wells revoked his pre-sentencing release from incarceration on August 14,

2017. (Id. at 67.) As described in the Receiver’s Third Notice of Violation of Order (Dkt. No.

176), shortly after Deucher was again incarcerated, the Receiver discovered evidence that

Deucher had engaged in further fraudulent activities during his pre-sentencing release. (Id.) On

October 11, 2017, Deucher was sentenced to 84 months in prison, and ordered to pay

$16,560,552.00 in restitution. To date, the Receiver has received no payment from Deucher.

Richard Clatfelter (“Clatfelter), an associate of Chad Deucher’s who is a defendant in this

action filed by the SEC, but is not expressly included as a Receivership Defendant, consented to

the entry of a Judgment against him. (Dkt. No. 101). On December 1, 2016, the Court entered

Judgment against Clatfelter, ordering that he pay disgorgement of ill-gotten gains, prejudgment

interest thereon, and a civil penalty pursuant to Section 20(d) of the Securities Act and Section

21(d)(3) of the Exchange Act. (Docket No. 107). The SEC subsequently moved for, and the

Court entered, an order that Clatfelter is liable for disgorgement of $1,232,849.00, plus

prejudgment interest of $160,102.21 for a total of $1,392,951.21. (See Dkt. No. 180.)

1 The work performed by Ray Strong, the SEC’s retained accountant in this matter, indicates that the investment

amount may be much higher than Deucher admitted in his plea agreement. By presenting the amount admitted by

Deucher in his plea agreement, the Receiver is not admitting that this number is an accurate representation of the

actual amount invested in Defendants’ fraudulent scheme.


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Clatfelter’s first payment was due within 30 days from the date of that Order, i.e. it was due on

October 24, 2017. (Id.) To date, the Receiver has not received any payments from Clatfelter.

2. Overview of Operations of the Receiver.

a. Receiver’s Investigation

During the proceedings in this case, it became evident that appointment of a receiver was

necessary, even though the Defendants’ Accounting and preliminary investigation by the SEC

suggested there were few assets remaining in Defendants’ possession. (See, e.g., Dkt. No 34.)

The Receiver was appointed by Order of the Court dated January 18, 2017 (the “Receivership

Order”) to marshal and preserve certain assets of Defendants that were frozen by the January 20,

2016 Asset Freeze Order, plus all additional recoverable assets, which are defined as “assets of

any other entities or individuals that: (a) are attributable to funds derived from investors or

clients of the Defendants; (b) are held in constructive trust for the Defendants; and/or (c) were

fraudulently transferred by the Defendants.” (See Receivership Order at 1-2, Dkt. No. 110.)

At the outset of this receivership, there were multiple real estate properties and other

potential assets and claims that needed to be investigated and resolved, but there were no

meaningful liquid assets in the bank accounts disclosed by Defendants and no obvious physical

assets of substantial value easily liquidated by the Receiver to pay for the services of the

Receiver. Defendants had ceased operations at their primary business location and been evicted

before the Receiver was appointed. Their office furnishings had been seized by the lessor of

Defendants’ office space (hereinafter “the Lessor”). The residence owned by Chad and/or

Jessica Deucher was encumbered, in foreclosure, and subject to a separate lawsuit (therefore, the

Receivership Order expressly excluded that residence from the Receivership Estate). Chad


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Deucher’s asset disclosures filed with the Court identified a list of other real estate Defendants

purportedly owned and used to make real-estate based securities offerings as part of the Ponzi

scheme operated by Defendants. However, many of the disclosed properties were not recorded

in Defendants’ names. The identity of real estate assets presently owned by Defendants and the

value of such assets was uncertain. Defendants had also disclosed to the Court that Defendants

owned two Lear Jets through an entity owned by Chad Deucher, named Marquis Air, LLC.

However, the exact location of those Lear Jets was unknown.

During the first four quarters of the receivership, the Receiver focused on obtaining the

records of the Receivership Estate, identifying and preserving assets, and investigating potential

legal claims.

As described in previous filings, the Receiver faced substantial difficulties in identifying

and acquiring Marquis Properties’ business records. Chad Deucher turned over irrelevant

computers to the Receiver. Moreover, one or more computers and iPads that Chad previously

claimed contained records relevant to this case were lost or destroyed during the pendency of the

asset freeze. An example of one of the computers identified by the Receiver that has never been

turned over is a computer that Chad Deucher’s prior landlord, Steve Black retained (for an

unexplained reason) after Mr. Black otherwise responded to a subpoena to turn over all

computers to Chad Deucher’s then-counsel, Fillmore Spencer. Mr. Black admitted in an

interview with the Receiver that Chad Deucher picked up the retained computer in person

directly from Mr. Black by representing to Mr. Black that the computer was immediately

necessary for Chad Deucher’s legal case. The ultimate disposition of that computer is unknown.

However, Pawn Shop records show that Chad Deucher pawned at least one computer and iPad in


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violation of the Asset Freeze Order.

Despite these difficulties, spoliation of evidence, and violations of the Asset Freeze

Order, the Receiver did ultimately receive a copy of all of Chad Deucher’s laptop files that

remained on his laptop as of the date of the Receiver’s collection, a copy of undeleted and

otherwise recoverable text messages from Chad Deucher’s cell phone, and certain case files from

the law firm of Fillmore Spencer. The Receiver also obtained various records through subpoenas

to financial institutions and other third parties. Finally, the Receiver has taken depositions of

Chad Deucher, Jeremy Hill, Jessica Deucher, Jaxon Deucher, and Garrett Deucher.

The Receiver’s investigation to date uncovered multiple substantial violations of the

Court’s Asset Freeze Order and the Receivership Order by Chad Deucher and others. In the first

several months of the receivership, the Receiver worked quickly to identify and notify the court

of activities that were violating the Court’s Orders. To date, the Receiver has filed three notices

of violation of the Asset Freeze Order and Receivership Order by Chad Deucher. She has also

identified additional evidence of asset freeze violations in her status reports and has provided

evidence to the Securities & Exchange Commission regarding those violations. As described in

the Fourth Status Report, the Receiver discovered in December 2017 that Jessica Deucher had

disposed of further assets in violation of the Asset Freeze Order and Receivership Order. The

Receiver and the SEC notified the Court of this additional evidence at the Status Conference

Hearing on January 9, 2018, and issued additional subpoenas to follow up on this evidence. The

Receiver has provided this evidence to the SEC. With regard to the evidence of disposition of

frozen assets by Jessica Deucher and by others, the Receiver is presently weighing whether it is

in the best interest of the Receivership Estate to file motions for orders to show cause concerning


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those violations.

The Receiver’s investigation of real estate assets has shown that, at the time the Court

appointed the Receiver, the Defendants retained actual title to a small number of distressed

residential properties that are primarily located in distressed neighborhoods in cities in Ohio,

Pennsylvania, Indiana, and Kansas. Each of these properties is substantially distressed, of low

value, and presented significant concerns about uninsured liabilities. Most or all of these

properties are also subject to tax, nuisance, and/or other liens. Based on the Receiver’s

investigation, she concluded that these properties were unlikely to provide meaningful value to

the receivership in excess of the transaction costs required to sell them. Accordingly, on July 11,

2017, the Receiver filed with the Court a Motion for Order to Abandon Property concerning

those real estate holdings. (Dkt. No. 166.) The Court granted the Receiver’s Motion for Order

to Abandon property on October 23, 2017. (Dkt. No. 179.). During the first quarter of 2018 the

Receiver and her counsel effectuated the abandonment of the properties identified in the Court’s

Order by recording the notices of abandonment with the appropriate recorders’ offices.

Although the Receiver has been unable to identify substantial physical assets remaining

in the possession of the Receivership Defendants, she has now identified and obtained

permission to assert several million dollars in legal claims against third parties. The Marquis

Ponzi Scheme relied upon a large network of persons who referred victim investors located

across the country into the Ponzi scheme in return for commissions, marketing fees, joint-venture

agreements to participate in profits, payments to insiders, and even false escrow fees. A much

smaller group of individuals profited substantially as net winners in this Ponzi scheme

investment. The Receiver also has claims against several companies concerning payments by


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Marquis Properties of expenses for luxury items that benefited Chad Deucher, not the investors

of Marquis Properties.

b. Receiver’s Pursuit of Legal Claims and Abandonment of Properties

Through the last quarter of 2017 and the beginning of January 2018, the Receiver

investigated and asserted nearly 100 demands for repayment of fraudulent transfers. In response,

many of the transferees entered into tolling agreements to allow time for the Receiver to obtain

evidence of any defenses raised by the transferees, including any assertions of inability to pay a

judgment, and then to negotiate with the recipients of the transfers concerning potential

settlements. The tolling agreements obtained by the Receiver to allow pre-litigation negotiation

initially covered more than 2 million dollars in claims. Additionally, by January 18, 2018, the

Receiver filed the following seven lawsuits with these additional claim amounts:

Case Minimum Damages Claimed

Windham v. Allen, et al., 2:18-cv-00054-JNP $ 1,064,281

Windham v. Corey, et al., 2:18-cv-00065-EJF $ 500,000

Windham v. Norville, et al., 2:18-cv-00057-EJF $ 1,061,175

Windham v. Ringer, et al., 2:18-cv-00060-BCW $ 121,320

Windham v. Shults, et al., 2:18-cv-00062-PMW $ 300,000

Windham v. Snyder, et al., 2:18-cv-00063-BCW $ 200,000

Windham v. Real Estate Investor Support, LLC, et al.

2:18-cv-00059-BCW $ 108,700

Windham v. Zurixx, LLC, et al. 2:18-cv-00056-BCW $ 214,500

In the first quarter of 2018, the Receiver succeeded in entering into settlement agreements

concerning nine of her demands, pursuant to which the settling transferees agreed to settlements

that, aggregated, amount to $295,528.77. By March 31, 2018, settling transferees returned an

aggregate $275,783.77 to the receivership account. During the same period, the Receiver

entered into extensions of tolling agreements with a significant number of other transferees to

allow further time to discuss claims and defenses. For transferees who claimed they are


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financially unable to repay the demanded settlement amount, she allowed or is allowing them the

opportunity to provide a declaration of impecuniosity and supporting documentation to be

considered in the settlement negotiations. Several defendants who decided not agree to the

proposed settlement terms were added by the Receiver to the above-referenced lawsuits by filing

amended complaints. In rare instances, the Receiver dismissed transferees where new evidence

provided to the Receiver established that such action was in the best interest of the receivership

estate.2

The Receiver and her counsel remain in a very active phase of resolving claims through

settlement or otherwise. Since March 31, 2018, the Receiver has settled additional claims,

several of which are subject to court approval. Accordingly, the Receiver will be filing a motion

for approval of settlement agreements with the Court shortly after submission of this Status

Report. The Receiver anticipates that during the second quarter of 2018, she may file one or

more additional lawsuits, unless she is able to resolve her claims prior to litigation. The

additional suits the Receiver is presently considering relate to insiders and providers of legal

services.

At the same time, the Receiver is also making efforts to resolve the above-referenced

cases without extended litigation, where possible. The Receiver has resolved multiple claims

relating to the cases Windham v. Snyder and Windham v. Norville that will included in the

Receiver’s forthcoming Motion to Approve Settlement Agreements. In the next status report, the

Receiver will compare the success of her settlement efforts with amounts of her demands, and

2 For example, she dismissed a convicted fraudster, Lee Loomis, from the case after he appeared pro se while

serving an extended prison sentence and all evidence available to the Receiver indicated that he does not currently

have assets in his name from which the Receiver may collect.


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she may revise her estimate of the value of her claims based on the emerging information

concerning the transferees’ defenses and ability to pay. At this date, however, it remains

premature to diverge from the Receiver’s estimate that the claims she asserts may amount to $5

million or $6 million in value.

The Receiver is also currently engaged in conversation with counsel for Garrett Deucher

relating to his bankruptcy proceedings. In the first quarter, she and her counsel prepared to take

Garrett Deucher’s deposition concerning the Marquis Properties investment, in which he was

involved together with his brother Chad Deucher. The Receiver and her counsel subsequently

took that deposition in April 2018.

The Court granted the Receiver’s Motion for Order to Abandon property on October 23,

2017. (Dkt. No. 179.) The Receiver and her counsel have recorded notices of abandonment

regarding each of the properties identified in the Court’s Order.

3. Progress by Receivership Task

a. Collection of Books, Records, and Information Concerning the Receivership

Estate

The Receiver’s ongoing efforts to obtain books, records, and information include

obtaining documents and information from third parties who respond to demand letters as well as

issuing selective subpoenas. The Receiver took the deposition of Jaxon Deucher in January of

2018 and prepared for the April deposition of Garrett Deucher. The Receiver also obtained

additional records concerning assets sold by Jessica Deucher during the asset freeze period. She

has provided those records to the SEC.

b. Collection and Administration of Physical Assets

Details of the Receiver’s collection and administration of Physical Assets are set forth in


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the Receiver’s Third Status Report. She continues to believe that very few, if any, assets of

significant value remain in the possession of Defendants. In the deposition of Jessica Deucher

on December 15, 2017, Ms. Deucher identified additional personal property that she disposed of

during the asset freeze period. The Receiver obtained records that confirm this testimony

through the subpoenas she issued regarding the disposition of those assets. The Receiver has

also requested return of assets from a transferee who received a fake Rolex watch, a handgun,

and documents purporting to encumber other frozen assets. As of March 31, 2018, the Receiver

and transferee were in negotiation concerning the Receiver’s claims to these physical assets.

i. Real Estate Assets Used in Defendants’ Securities Offerings

The Court granted the Receiver’s Motion to Abandon the real estate properties known to

the Receiver, as identified in the Receiver’s Motion. (See Dkt. No. 166.) In the first quarter of

2018, the Receiver and her counsel recorded Notices of Abandonment pursuant to the Court’s

Order.

After the Receiver made her Motion to Abandon, the Receiver became aware of one

additional property owned by Marquis Properties, a vacant lot in a distressed neighborhood

valued on property tax rolls at $449.00. The address of the property is 1209 E 44th

Street,

Kansas City, MO 64110. She became aware of this property when contacted by a neighborhood-

cleanup association interested in a donation, or possibly purchase of that property. The Receiver

asked the association to make a purchase offer for the property, if possible. The Association did

not respond to the Receiver’s request. This property is currently subject to tax sale proceedings.

ii. Office Furniture Seized by the Lessor

Prior to the Court’s entry of the Asset Freeze Order, the Lessor of Defendants’ office


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space seized the office furnishings owned by the Defendants due to nonpayment of rent. The

Lessor stored the Defendants’ office furnishings in two storage units. In May 2017, the Receiver

worked in cooperation with the Lessor to examine the Lessor’s storage units and to obtain an

estimate of the value of the Defendants’ office furnishings. The Receiver and her counsel

conducted an on-site inspection of the storage units along with representatives of two asset

liquidation companies.3 Both asset liquidation companies estimated the value of Defendants’

office furnishings to equal an amount less than $5,000. The Receiver and Lessor mutually

agreed to preserve the remaining value of these assets by liquidating the furniture at an auction to

be held in August 2017 and then to subsequently negotiate concerning their respective claims to

the liquidated amount.

The auction was held in August 2017 and the auction company issued two checks to the

receiver in the amounts of $5,934 and $100. The Receiver deposited this amount in the

Receivership bank account. She sent a demand letter to the Lessor concerning the Lessor’s claim

to ownership of the assets on November 13, 2017. The Lessor recently responded and the

Receiver and Lessor negotiated settlement of this low value claim during the first quarter of

2018. Pursuant to the settlement agreement entered into by the Receiver, the Receiver paid

Black a small share of the proceeds of the litigation. Because the settlement was of a claim for

less than 25,000, the settlement agreement did not require court approval.

iii. Remaining Personal Property

There are very limited items of personal property remaining in Defendants’ possession.

The Receiver obtained pawn shop records by subpoena that show that certain personal property

3 As described above, during that inspection and valuation of the contents of the storage units, the Receiver and her

counsel also discovered and collected two more computers that belonged to Defendants.


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was sold by Chad Deucher during the period of the asset freeze, including the following:

Springfield Armory Pistol

Sony PlayStation 4

TUL ammunition

Apple GTS watch

Apple tablet, computer iPad mini

Long board

Mont Blanc accessory pen

Epson projector LCD

Prada sunglasses

Louis Vuitton sunglasses

$200 Gunnies gift card

Connecticut Valley Arms

Netgear computer accessory

OMNI Smart Batteries & Charger

Apple iPhone 6

Bose Headphones

Beats audio headphones

Monster headphones

Sony camcorder

Apple cell phone

Apple iPhone 6S plus

Apple iPad air

Oakley sunglasses

MacBook Air

Husky tools compressor

The Receiver also obtained documentation showing that the 1969 Camaro is no longer in

Defendants’ possession, and that it was likely transferred away in 2014.

On November 14, 2017, Jessica Deucher filed a description of assets currently in her

possession, and identified additional assets that were sold during the period of the asset freeze.

(See Dkt. No. 188.) Jessica Deucher then identified further assets that she sold during the period

of the asset freeze in her December 2017 deposition testimony. The Receiver also obtained

additional documentation of personal property sold during the asset freeze from subpoenas to


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third parties, including PayPal. Jessica Deucher testified in her deposition that any remaining

large pieces of personal property, including house furnishings and art, were sold during a move

in mid-2017.

iv. Financial Accounts

There is very little cash for the Receiver to collect into the receivership account from

Defendants’ financial accounts discovered by the Receiver. Account information collected from

the Defendants’ various financial institutions indicates that most accounts have zero or negative

balances. All other accounts, except those identified as belonging to children of Chad Deucher,

combined contain approximately $100. The law firm of Fillmore Spencer is presently holding

$1,226.00 frozen in a client trust account pursuant to the Court’s Asset Freeze Order.

c. Investigation and Pursuit of Receiver’s Legal Claims

The Receiver’s progress concerning her assertion of legal claims is described above. On

or before March 31, 2018, The Receiver obtained the following settlements pursuant to the terms

of the standardized settlement agreement or on terms that do not require additional court

approval4:

1. A settlement of fraudulent transfer claims for the sum of $4,875, paid in 12 equal

monthly installments.

2. A settlement of fraudulent transfer claims for the sum of $20,800.27, paid up

front.

3. A settlement of fraudulent transfer claims for the sum of $9,800, paid up front.

4 Settlement agreements entered into by the Receiver on claims valued at $25,000 or less may be entered into by the

Receiver in her discretion without specific Court approval. Therefore, in certain instances, claims asserted by the

Receiver valued at $25,000 or less may diverge from the terms of the pre-approved standardized settlement

agreement.


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4. A settlement of fraudulent transfer claims for the sum of $7,500, paid in 12 equal

monthly installments.

5. A Settlement of fraudulent transfer claims for the sum of $500, paid up front.

6. A settlement of fraudulent transfer claims for the sum of $4,900 paid up front.

7. A settlement of fraudulent transfer claims for the sum of $4,700 paid over 12

months


118,201.27


The Receiver also obtained settlement of charitable contributions at the confidential

terms approved by the Court in an amount of 156,857.50. By March 31, 2018, the Receiver had

obtained settlements amounting to $295,528.77 and received payments of $275,783.77.

Negotiations over settlements of the claims of the Receivership estate are actively ongoing.

Several settlement agreements were obtained shortly after March 31, 2018.

B. RECEIVERSHIP FUNDS

The Receiver has established a bank account for the qualified settlement fund. As of

January 1, 2018, it contained a balance of $6,076.03. Settlement payments received on

settlements through March 31,, 2018 were deposited into the Receivership account in the amount

of $275,783.77. Additionally a nominal dividend payment and refund made out to Chad

Deucher were deposited in Receivership account amounting to $34.45. Between January 1, 2018

and March 31, 2018, the Receiver’s fees, attorney’s fees and expenses previously approved by

the Court pursuant to the Receiver’s First Interim Fee application were paid from the assets on


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deposit in the Receivership account. The Receiver also paid $1,206.94 to Black as his portion of

the profit of the liquidation sale of office furniture. On March 31, 2018, the balance of the

Marquis Properties bank account was $107,783.79.

The Court has not yet approved the Receiver’s Second or Third Fee Applications. The

Receiver’s law firm, Ray Quinney & Nebeker, P.C. has been fronting administrative costs of the

receivership, such as subpoena filing fees and electronic data collection and processing. The

Receiver has applied or is applying for payment of the fees and expenses identified in her second

and third fee applications.

C. RECEIPTS AND DISBURSEMENTS

Receipts between January 1, 2018 and March 31, 2018:

Payor Amount Sum

Combined Settlement Payments Received $275,783.77 $275,783.77

Wells Fargo Bank NA (refund) $31.50 $275,815.27

MetLife (Dividend) $3.04 $275,818.31

Disbursements between January 1, 2018 and March 31, 2018:

Payor Amount Sum

Ray Quinney & Nebeker, P.C. (attorneys fees) $128,723.61 $128,723.61

Ray Quinney & Nebeker, P.C. (Receiver’s

fees) $44,180 $172,903.61

Steven Black (share of liquidation proceeds) $1,206.94 $174,110.55

D. RECEIVERSHIP PROPERTY

The list of distressed real estate assets that were previously within the Receivership

Estate is attached as Exhibit B to the Receiver’s previously-filed Motion for Order to Abandon.

(See Dkt. No. 166.) That exhibit also identifies the 2016 “assessed value” of the listed


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properties. (Id.) The Receiver believes these values are too high based on the evaluations

completed for the Receiver by third party consultants. One of these properties, 327 N. Sherman

Drive, Indianapolis, IN 4620, was put up for tax sale by a city after the City foreclosed on a tax

lien. The City did not receive a single bid for that property. Most of these properties are also

encumbered with additional tax liens and penalties. The real estate asset of greatest “assessed”

value, 2164 Sunset River Dr., Jacksonville, FL 32225, is in extreme disrepair and has been

accruing nuisance penalties for more than a year. The Receiver was notified that the City of

Jacksonville intends to condemn the property. (See Real Estate Notice, Dkt. No. 174, Ex. D.)

As to each of these real estate assets, the Receiver’s consultant opined that, after transaction

costs, the Receivership Estate would not obtain a material benefit by selling them. That

assessment is supported by information the Receiver has obtained from other third parties. What

is more, the condition of these properties poses a liability risk to the receivership. Therefore, the

Receiver filed her Motion for Order to Abandon the Real Properties, which the Court granted on

October 24, 2017. (See Dkt. No. 179.) In the first quarter of 2018, the Receiver and her counsel

recorded notices of abandonment for each property identified in the Order at the appropriate

recorders’ offices.

After the Receiver made her motion to abandon properties, she discovered an additional

vacant lot owned by Marquis Properties, located at 1209 E 44th

Street, Kansas City, MO 64110,

which is valued in the property tax roll at $449. This lot is currently subject to tax sale

proceedings, which the Receiver does not oppose.

E. CLAIMS BELONGING TO RECEIVERSHIP ESTATE

The Receiver’s assessment and pursuit of fraudulent claims is discussed in detail above.


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Additionally, the Receiver is participating in legal proceedings concerning Garrett Deucher--

Chad Deucher’s brother--who was paid commissions for promoting investments in Marquis

Properties and who participated in asset freeze violations. The Receiver sought to assert a claim

against Garrett Deucher for an amount in excess of $ 375,000 before she discovered his

bankruptcy filing, which had not been provided to the Receiver. (See In re Garrett Deucher &

Anne Deucher, Bankr. Case No. 17-24613 (Bankr. D. Utah) at Dkt. No. 38.) Counsel for the

Receiver filed an objection in Garrett Deucher’s currently-pending Chapter 13 bankruptcy

proceeding and is communicating with Mr. Deucher’s bankruptcy counsel regarding the

Receiver’s claims.

F. LIST OF CREDITORS AND CREDITORS CLAIMS

The lack of accurate records concerning investors has hindered the Receiver from

identifying a reliable list of all creditors and creditors’ claims. Continuing collection and

analysis of third-party evidence is necessary before the Receiver can accurately set forth a list of

creditors. She is continuing to collect such information throughout the process of negotiating the

claims of the Receivership estate against the transferees.

G. CREDITOR CLAIMS PROCEEDINGS

The Receiver has deferred creditor or investor claims proceedings because of the current

lack of liquid assets in the estate. She is reluctant to impose a burden on victim investors to

engage in a claims process before the Receiver collects sufficient assets to determine that a

distribution is likely. Based on the total value of the Receiver’s legal claims, the Receiver is

cautiously optimistic that she will be able to obtain recoveries sufficient to warrant a meaningful

return to investors. She has informed the Court that she will do so upon recovery of a sufficient


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sum to warrant undertaking the cost of a claims process, which she estimates to be about

$1,000,000. In the meantime, the Receiver welcomes investors and other creditors to contact the

Receiver and to submit information that may be helpful to her investigation. The Receiver’s

website is located at https://marquisreceivership.com/.

H. RECEIVER’S RECOMMENDATIONS

The Receiver believes that the Receivership Estate has a number of meritorious legal

claims, and that the value of claims amount to several million dollars. The Receiver

recommends that she continue to pursue these claims, as permitted by prior orders of the Court in

a manner that is sensitive to the costs of the receivership. Using her best judgment, the Receiver

will continue to weigh the costs versus the potential benefit to the Receivership Estate of her

pursuit and resolution of those claims.

RESPECTFULLY SUBMITTED this 30th day of April, 2018.

RAY QUINNEY & NEBEKER P.C.

/s/ Jascha K. Clark

Kristine M. Larsen

Jascha K. Clark

Brittany J. Merrill

Attorneys for the Receiver, Maria E. Windham


https://marquisreceivership.com/

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CERTIFICATE OF SERVICE

I hereby certify that on this 30th

Day of April, 2018, I electronically filed the foregoing

RECEIVER’S FIFTH STATUS REPORT with the Clerk of Court using the CM/ECF system

which sent notification of such filing to the following:

Amy J. Oliver

SECURITIES AND EXCHANGE COMMISSION

351 S WEST TEMPLE STE 6.100

SALT LAKE CITY, UT 84101

Email: [email protected]

Cheryl M. Mori





Daniel J. Wadley





Justin D. Heideman

HEIDEMAN & ASSOCIATES

2696 N UNIVERSITY AVE STE 180

PROVO, UT 84604


Armand J. Howell

HALLIDAY WATKINS & MANN PC

376 E 400 S STE 300









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Via U.S. mail, postage prepaid, to the following non-CM/ECF participant:

Jessica Deucher

1082 E. 50 S.

Orem, UT 84097

And via electronic mail on the following non-CM/ECF participant:

Richard Clatfelter

[email protected]

/s/ Jascha K. Clark

1452024


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