PHOENIX (CN) – Seven men demand $49 million from the Arizona Corporation Commission, claiming it demanded more money in restitution than they made in the contested deals – and did not get consent from their wives for the orders of restitution.
The plaintiffs – Ron Goble, Wallace Butterworth, William Bergh, Mark Melkowski, Gary Christian, Roger Lancette, and Hyland Whelan – say they worked on commission selling “investments” for World Cash Providers, Mobile Cash Systems and Hotel Connect, from 1999 to 2001.
The Arizona Corporation Commission entered cease and desist orders in 2001 against the men after determining that the “investments” were actually securities, the men say in Maricopa County Court.
The Corporation Commission originally ordered them to pay $19.3 million in restitution, though they received only $2.8 million in commissions, the men say.
The commission eventually reduced the restitution demand to $2.1 million. But the men claim, among other things, that the money is community property with their wives. All seven men are married.
Lead plaintiff Goble claims, for example, that he “sold securities for HC totaling approximately $400,000. The entire $400,000 was delivered directly to HC upon receipt by said plaintiff. The gross commissions HC subsequently paid said plaintiff on said sales were approximately $100,000.” Nonetheless, he says, “The ACC ordered said plaintiff to pay the full amount of the $400,000 that had been paid to HC as restitution in connection with the sale of these securities, even though his gross commissions were only $100,000.”
The men say the Corporation Commission had them consent to an amended order to cease and desist, an amended order of restitution, and an amended order for administrative penalties, in exchange for the release of the restitution orders, but failed to enter the orders against their wives.
The men’s wives – who are co-plaintiffs – claim they did not consent to the amended orders for $2.1 million and that the commission “failed to consider the financial ability of the plaintiffs to pay restitution when setting the amount of restitution that was ordered against plaintiffs.”
The seven men want the commission enjoined to modify the order “to properly reflect the limitations on restitution/disgorgement mandated by the United States Constitution.”
Their wives want the commission enjoined from executing the $2.1 million judgment against their husbands’ property, and $2.3 million in actual damages.
The plaintiffs are represented by Kenneth W. Schutt Jr. of Scottsdale.