Steve Chen not opposing USFIA preliminary injunction
The strongest indication that Steve Chen has not fled the US yet, comes today via two SEC filings.
Following the granting of a TRO against USFIA and Chen last month, at some point in the future a preliminary injunction hearing would need to take place.
If granted, a preliminary injunction would make permanent the closure of USFIA and prevention of Chen from conducting further securities fraud.
It would also pave the way for recovery efforts to secure funds Chen and top investors and insiders stole from USFIA victims.
In a filing by the SEC dated October 5th, pertaining to consent by USFIA, the following paragraph appears:
WHEREAS, Chen consents to the entry of a preliminary injunction and to the appointment of Thomas Seaman as permanent receiver with full power over the Entity Defendants, during the pendency of this action;
WHEREAS, the Entity Defendants, by and through the court-appointed receiver, consent to the entry of a preliminary injunction and appointment of a permanent receiver over the Entity Defendants;
A second filing also dated October 5th, pertaining specifically to Steve Chen, contains similar verbiage but goes further:
WHEREAS, Chen consents to the entry of a preliminary injunction and appointment of a permanent receiver over the Entity Defendants;
IT IS HEREBY CONSENTED, STIPULATED AND AGREED by the SEC and Chen:
1. Chen waives service of process under Federal Rule of Civil Procedure 4(d)(3) as to the summons and Complaint in this action and admits the Court’s jurisdiction over him and over the subject matter of this action (with respect to the instant Complaint only).
2. Chen acknowledges that he was properly served with a copy of the Complaint, the TRO and all papers submitted by the SEC in support thereof.
3. Chen does not contest the entry of a preliminary injunction and appointment of a permanent receiver over the Entity Defendants.
4. Without admitting or denying any allegations of the Complaint (except as to personal and subject matter jurisdiction under the instant Complaint, which Chen admits), Chen consents and stipulates to the entry of a preliminary injunction.
5. Chen waives the entry of findings of fact and conclusions of law pursuant to Fed. R. Civ. P. 65.
6. Chen enters into this Consent and Stipulation voluntarily and he represents that no threats, offers, promises, or inducements of any kind have been made by the SEC or any member, officer, employee, agent, or representative of the SEC to induce him to enter into this Consent and Stipulation.
7. Chen agrees that the Court may enter a preliminary injunction in the form attached hereto as Exhibit 1 without further notice or hearing.
The second document bears Chen’s signature, dated October 2nd, 2015:
The only reason I can think of that explain why Chen consented to his effective losing of the SEC case against him, is that he was arrested by the FBI. Otherwise Chen’s consent makes no sense.
It was only a few weeks ago Chen had his attorney, Andrew Beal of Crowley Corporate Attorneys, declare ‘claims by Gemcoin critics are unfounded‘.
Why drop the facade now?
My gut is telling me Chen is likely facing far more serious charges brought about by the FBI, with the SEC complaint thus seen as being of secondary importance.
Civil penalties he can live with, but this is probably now more about fending off a lengthy jail sentence.
As of yet though, there has been no word from the FBI about Chen’s arrest. Nor the current status of their criminal investigation.
Stay tuned as the situation develops…