Troy Barnes still failing to co-operate in SEC case
I don’t have counsel and can’t afford it.
I would like to explain that I am guilty of being ignorant in this case.
The order stemmed from Barnes’ thus far non-participation in the SEC case against him.
In late June the court accepted Barnes’ explanation, on the proviso he would participate fully in the case going forward.
It (sic) hard to do anything when you don’t understand anything of the law and have no counsel.
Thank you and I will do everything I can to move forward in helping this case.
Yet one month later, a new filing from the SEC reveals Barnes is still refusing to participate.
Barnes’ continued non-participation has been detailed in a proposed scheduling order, submitted by the SEC on the 31st of July 2015.
In it, the agency writes
Defendant Troy Barnes, who is proceeding pro se, informed counsel for the Commission that he would not be participating in the Rule 26(f) conference.
The conference in question was scheduled for July 7th, roughly a week after Barnes’ pledged to ‘do everything I can to move forward in helping this case‘.
Mr. Barnes also failed to respond to emails requesting his input on this scheduling order.
In stark contrast to Barnes, Kristi Johnson, the other Achieve Community co-founder, is fully co-operating through her attorney.
As to the SEC’s case against the pair:
(Barnes and Johnson) enticed investors to buy “positions” in The Achieve Community (“TAC”) by claiming investors would earn extraordinary investment returns of 700 percent, which was generated through a purported “triple algorithm” that Johnson and Barnes developed.
Defendants further claimed TAC was a long-term, stable program that would generate “limitless,” “lifetime” returns. In reality, TAC was a pure Ponzi and pyramid scheme.
Early investors were paid their purported investment returns from the funds of newer investors.
BehindMLM concluded as much when we first reviewed Achieve Community back in October 2014.
The SEC is not seeking damages. The SEC is seeking, from each defendant, a permanent injunction against future violations of the federal securities laws charged in the Complaint.
The SEC is also seeking disgorgement of ill-gotten gains relating to the alleged illegal conduct, plus prejudgment interest. The SEC is also seeking civil penalties.
I’m guessing the lack of damages probably ties into the DOJ’s criminal filing against Johnson, which sees her facing jail time and heavy fines.
A criminal case against Barnes has yet to be filed but is expected at some point in the future (there’s probably non-cooperation issues there too that are still playing out).
To support their case, the SEC will be providing information from payment processors, evidence collected during their investigation, bank and financial institution records.
Johnson meanwhile stipulated she is
preserving any e-mails or other electronically stored information that she may have that is relevant to the claims in this case.
To further support their case and in addition to planned expert testimony, the SEC will also be seeking depositions from
- Kristine Johnson – 7 hours
- Troy Barnes – 7 hours
- Rodney Blackburn – 7 hours
- Chris Fortner – 7 hours
- 1-2 investors in The Achieve Community – 3 hours each
- Representative from iPayDNA – 7 hours
- Representative from Stripe – 7 hours
- Representative from Binary Wallet – 7 hours and
- Representative from Payoneer – 7 hours
Chris Fortner is believed to have been involved in the behind the scenes operations of Achieve Community.
As the scheme collapsed, Blackburn deleted most of his Achieve marketing videos and began promoting alternative HYIP and matrix-based Ponzi scams.
Whether or not Blackburn will face charges as an Achieve Community insider remains to be seen.
Looking forward, at this stage neither the SEC or Johnson believe
there is potential for settlement prior to Ms. Johnson’s sentencing in the related criminal matter.
The parties will be in a better position to assess settlement potential following that sentencing.
At at the time of publication, ‘Johnson’s sentencing has not been scheduled‘.
A proposed interrogatories and requests for production of documents and/or admissions deadlines have been proposed for April 2016.
At present the proposal has been filed and awaits approval by a Judge, after which we’ll have an update out.
Footnote: Our thanks to Don@ASDUpdates for providing a copy of the SEC’s July 31st Proposed Scheduling Order.