United States District Court, D. Nevada
U.S. SECURITIES & EXCHANGE COMMISSION, Plaintiff,
EXOTICS.COM, INC., et. al., Defendants.
MIRANDA M. DU UNITED STATES DISTRICT JUDGE
a long-running accounting fraud and stock manipulation case
involving alleged violations of federal securities laws. (ECF
No. 1.) Before the Court is Defendant Gary Thomas' letter
informing the Court that he will not be meeting his payment
obligations under the Court's most recent order regarding
his contempt of Court. (ECF Nos. 599 (the “May 2019
Order”), 600 (“Thomas' Letter”).) The
Court has also reviewed Plaintiff the U.S. Securities and
Exchange Commission's response to Thomas' Letter.
(ECF No. 601.) Because of Thomas' ongoing contempt of
Court, and as further explained below, the Court will order
Thomas' immediate incarceration.
Court's May 2019 Order regarding Thomas' ongoing
contempt of Court stated it would order his incarceration if
he failed to comply with any of its terms. (ECF No. 599 at
3.) In his letter, Thomas indicated he would not be making
the first payment required under the May 2019 Order. (ECF No.
600 at 2.) Plaintiff stated it did not timely receive the
first payment due under the May 2019 Order. (ECF No. 601 at
3.) Thus, Thomas remains in contempt of the Court's
orders, specifically including the May 2019 Order, and the
Court's May 2019 Order made it clear the penalty for
noncompliance is immediate incarceration.
and as further explained below, the Court will direct the
U.S. Marshals to arrest Thomas and hold him in custody near
the Lloyd D. George U.S. Federal Courthouse in Las Vegas,
Nevada, unless and until he purges his contempt. But the
Court will first address two requests in Thomas' Letter,
then how Thomas may purge his contempt, and then address the
next steps in this case for Thomas.
Thomas requested in the Thomas' Letter that he be
incarcerated in the Phoenix, Arizona metropolitan area, and
that he be allowed out on ‘work release' during his
incarceration. (ECF No. 600 at 2.) Those requests are denied.
To start, placing such lenient conditions on Thomas'
incarceration for civil contempt would undermine the purpose
of civil contempt-to coerce compliance with this Court's
orders. See, e.g., Shillitani v. United
States, 384 U.S. 364, 368 (1966) (explaining that
attempting to coerce someone to begin following a court's
orders, including through conditional incarceration, is the
hallmark of civil contempt); see also S.E.C. v. Elmas
Trading Corp., 824 F.2d 732, 732 (9th Cir. 1987)
(finding that district court's order was an unappealable
order for civil contempt because it was intended to coerce
someone to produce documents or provide credible evidence as
to his inability to comply). Incarcerating Thomas in Nevada
with no ‘work release,' contrary to his requests,
will likely be more effective in coercing him to begin
complying with the Court's orders. Further, this Court is
in Nevada, and holding Thomas closer to the courthouse will
facilitate the U.S. Marshals bringing him to one or more
future hearings where he will be given the opportunity to
purge his contempt.
purge his contempt at the next hearing the Court will hold in
this case, or at any future hearings, Thomas can do one of
two things. First, he can begin complying with the
Court's orders (including all obligations specifically
outlined in the May 2019 Order), including by immediately
making all back payments owed to Plaintiff, and complying
with all his payment obligations going forward. Second, he
can provide sufficient documentation to establish his claim
of present inability to pay. The Court agrees with Plaintiff
as to what Thomas must provide to establish his claimed
current inability to pay. (ECF No. 601 at 7-8.) If Thomas
seeks to establish his current inability to pay at the next
or future hearings in this case, Thomas is ordered to provide
documents corresponding to everything requested by Plaintiff
in Plaintiff's response to Thomas' letter (ECF No.
601 at 7-8), five business days before that hearing, or two
business days before the first hearing, as specified below.
The Court will not entertain any requests for continuances,
extensions of time, or arguments based on an inability to
assemble the requisite documentation. The Court notes that,
in addition to having had years to assemble documentation of
his allegedly changed financial circumstances resulting in
his purported inability to pay, Thomas's counsel stated
in Thomas' Letter that he, “with Mr. Thomas's
assistance, is acquiring all necessary documentation to
establish why Mr. Thomas's current financial situation
does not allow for compliance.” (ECF No. 600 at 2.)
therefore ordered that Thomas remains in contempt of
Court-and will remain in contempt unless and until he can
purge such contempt.
further ordered that Thomas be immediately incarcerated
nearby the Lloyd D. George U.S. Federal Courthouse in Las
Vegas, Nevada, unless and until he can purge such contempt.
Clerk of Court is directed to issue a bench warrant or civil
arrest warrant directing the U.S. Marshals to take Defendant
Gary Thomas, a/k/a Gary Thomas Vojtesak, into custody at his
residence in Arizona, or wherever else he may be found within
the continental United States, as soon as possible, transport
him to Nevada, and hold him in custody nearby the Lloyd D.
George U.S. Federal Courthouse in Las Vegas, Nevada, so that
he will appear at the June 21, 2019 hearing detailed below,
and attempt to purge his contempt, and then continue to hold
him in custody nearby the Lloyd D. George U.S. Federal
Courthouse in Las Vegas, Nevada unless and until he can purge
such contempt. The Clerk of Court is further directed to
provide the U.S. Marshals with a copy of this order.
further ordered that the Court will hold a hearing to give
Thomas the opportunity to purge his contempt on Friday, June
21, 2019, at 9:30 a.m. pacific, at the Lloyd D. George U.S.
Federal Courthouse in Las Vegas, Nevada.
further ordered that, if Thomas seeks to argue or establish
his inability to pay at that hearing, he is ordered to
provide documents corresponding to everything requested by
Plaintiff in Plaintiffs response to Thomas' letter (ECF
No. 601 at 7-8) by 1:00 p.m. pacific on Wednesday, June 19,
2019. Thomas' counsel is directed to provide those
documents by both filing copies of them under seal and
serving identical copies on Plaintiff by email, and by mail
to allow for delivery the next morning, June 20, 2019. Thomas
and his counsel are further instructed that this procedure
regarding establishing Thomas' claimed present inability
to pay will remain in effect for any future ...