General Information and Documents for Secure Investment Services, Inc. and American Financial Services, Inc.

IMPORTANT INVESTOR UPDATE (07-06-2010)

Throughout this case the Receiver has been managing the portfolio of insurance policies with a goal to maximize returns to the receivership estate. As part of that process, he periodically reviews each policy to determine whether it makes financial sense to keep the policy in force or let it lapse. So far he has been able to pay premiums on all policies from a line of credit. This case, however, is now at a critical juncture. The Receiver desires to keep all policies in force but his ability to do so is limited by the receivership estate's assets and line of credit. Although some policies have matured, they did not generate enough death benefits to continue paying premiums for all policies through the foreseeable future. The Receiver, therefore, has decided to keep in force the most promising and cost-effective policies and let the two most expensive policies lapse. He has filed a Motion asking for permission to let the PER-T&E and MAN-S policies lapse. Since the receivership estate owns a 100% interest in both those policies, this does not impact any group of investors more than another. You will also receive a separate notice about this motion in the mail.

Each investor is urged to carefully read the Motion. It explains why, from a financial viewpoint, the Receiver thinks it makes sense to abandon these two policies. The bottom line is the Receiver would not have enough money to keep paying premiums until those two insureds are projected to die without putting at risk the ability to pay premiums on all the other policies. If you still have questions after reading the motion, feel free to contact us.

INVESTOR UPDATE (07-22-2010) - The Receiver continues to review claim forms and submit claims to the Court for approval. When the Court approves an investor's claim, that investor is eligible to receive a distribution from the receivership estate. The following steps, however, must be completed before the estate is distributed to investors: (1) the Receiver must review every investor claim, (2) the Receiver must recommend that the court either approve or deny each of them, (3) the Court must enter an order approving or denying each of them, (4) the Receiver must submit a final distribution plan, and (5) the Court must approve a final distribution plan. Right now, the Receiver is in the process of completing steps 1 and 2.

The Receiver filed his First Motion to Allow "A" Claims addressing 41 claims with a total net claim amount of $1,441,155.00. On February 5, 2008, the Court entered its Order Granting the Receiver's First Motion to Allow "A" Claims.

The Receiver filed his Second Motion to Allow "A" Claims that addressed 123 claims with a total net claim amount of $4,893,405.76. On September 2, 2009, the Court entered its Order Granting the Receiver's Second Motion to Allow "A" Claims.

The Receiver filed his Third Motion to Allow "A" Claims that addressed 159 claims with a total net claim amount of $5,980,206.69. On November 5, 2009, the Court entered its Order Granting the Receiver's Third Motion to Allow "A" Claims.

The Receiver filed his Fourth Motion to Allow "A" Claims that addressed 81 claims with a total net claim amount of $2,855,931.15. On February 4, 2010, the Court entered its Order Granting the Receiver's Fourth Motion to Allow "A" Claims.

The Receiver filed his Fifth Motion to Allow "A" Claims that addressed 79 claims with a total net claim amount of $3,485,577.72. On May 12, 2010, the Court entered its Order Granting the Receiver's Fifth Motion to Allow "A" Claims.

The Receiver filed his Motion to Adjust "A" Claims that addressed 91 claims with a total net claim amount of $2,828,364.94.

The Receiver filed his Sixth Motion to Allow "A" Claims (Exhibit 1) that addressed 65 claims with a total net claim amount of $2,018,613.14.

The Receiver filed his Second Motion to Adjust "A" Claims (Exhibit 1) that addressed 22 claims with a total net claim amount of $436,990.00. The Receiver filed the motion to adjust claims that were overstated and to deny claims not properly attributed to the receivership estate.

INVESTOR UPDATE (04-06-2010) - The Receiver has prepared a list of Frequently Asked Questions with answers about the receivership proceedings, the portfolio of insurance policies, and the distribution to investors.

INVESTOR UPDATE (02-24-2010) - The Receiver has filed an Interim Report explaining the current status of insurance policies and investor claims against the estate.

INVESTOR UPDATE (11-12-2009) - The Court has entered its Final Judgment against Defendant Kimberly Snowden. It adopts the findings made in its Order awarding summary judgment to the SEC on May 26, 2009. The Court found that Snowden violated the anti-fraud and registration provisions of federal securities laws. Among other things, it found that "Snowden knew the investors’ funds were being misused yet she continued to misrepresent the truth to investors." It also ordered her to disgorge a total of $627,621.77 that she received from the fraudulent investment scheme.

If you wish to read more about the SEC's allegations against Kimberly Snowden and the other defendants in this case, you may read its Memorandum or Points and Authorities, its Statement of Facts, the Declaration of Thomas J. Eme (Exhibits 1-3 - Exhibits 4-7 - Exhibit 8 - Exhibit 9-14 - Exhibit 14 cont'd - Exhibits 15-24), and the Declaration of Milo Segner (Exhibits 1-11 - Exhibits 12-16 - Exhibits 17-27 - Exhibits 28-29). Those pleadings and the supporting exhibits explain in detail each act of wrongdoing committed by Donald Neuhaus, Kimberly Snowden, and the investment companies in this case.

The SEC filed its Status Report stating that all of its claims against Defendants have been resolved and the case only remains open so the Receiver can process investor claims, liquidate assets, and ultimately distribute those asset to investors with approved claims.

INVESTOR UPDATE (09-18-2009) - The SEC has filed a Status Report describing the remedies that it may pursue in this case. Consistent with its recommendation, the SEC filed a Stipulation asking to dismiss its claims against Defendants Secure Investment Services Inc., American Financial Services Inc., and Lyndon Group Inc. The Court entered an Order dismissing the SEC's claims against those defendants on September 16, 2009. Since those entities are now in receivership, there is no reason for the SEC to pursue claims against them. Their assets are being collected and will be distributed to defrauded investors who have an allowed claim consistent with the Court approved claim procedure.

INVESTOR UPDATE (05-29-2009) - The Receiver has learned that the individual insured by the FOW-S(1) and FOW-S(2) polices has died and those policies have matured. The FOW-S(1) policy is wholly owned by the receivership estate and the insurance provider paid a total death benefit of $1,506,233.45 to the Receiver. That amount is now part of the pool of receivership estate assets for the benefit of investors who file an approved claim form in this case.

The FOW-S(2) policy is a multiple-owner policy that lists 29 investors as the owners and beneficiaries of record. The Receiver had just begun to send transfer forms to those investors because the insurance company only recently determined that it was a multiple-owner policy rather than a policy wholly owned by the receivership estate. When it matured, the Receiver had paid $80,700.00 in premiums on behalf of the other fractional owners. Furthermore, receivership records indicate that one owner did not pay for his interest in the policy. The Receiver, therefore, filed a Motion to Compel Payment of Death Benefits to the Receiver so he could recover the $80,700.00 spent for premiums, recover the fractional ownership interest that one owner did not pay for, and distribute the remaining amounts due to the other owners of record. The Court entered an Order granting that motion on May 22, 2009. The insurance provider has since paid a total death benefit of $1,508,506.57 to the Receiver and he will be distrubting the death benefits in the near future to owners listed in this policy who have completed a 2009 IRS W-9 form and returned it to the receiver. Additional information is available from the Examiner's website (www.sisexaminer.com).

INVESTOR UPDATE (11-10-2008) - The Receiver has filed an Interim Report explaining the current status of the insurance policies and other receivership estate assets.

INVESTOR UPDATE (01-10-2008) - The Court entered its Judgment against SIS, AFS, and LGI that permanently prohibits those entities, along with their officers and agents, from offering or selling securities to the public.

INVESTOR UPDATE (12-05-2007) - The Receiver has filed a Statement of Fact of Death notifying the Court that Donald Neuhaus has died during these proceedings.

INVESTOR UPDATE (12-03-2007) - On December 3, 2007, the Court entered its Stipulated Order Appointing an Examiner in these proceedings. The Examiner is a court-appointed officer who represents the interests of the investors as a whole. Appointing an Examiner will ensure that the investors' interests are being advocated at all times during these proceedings and that the Receiver is accountable to the investors for all decisions he makes with resepect to receivership estate assets.

INVESTOR UPDATE (10-30-2007) - On October 29, 2007, the Court entered its Order approving the Receiver's claim procedure plan. All known investors will receive an Investor Claim Form along with a cover letter explaining the claims process in this case. An investor claim may be disallowed if the Investor Claim Form is not returned within 60 days. As Investor Claim Forms are completed and returned, the Receiver will assign each of them a sequential claim number to identify that claim in these proceedings. Investors will receive a post card notifying them of their claim number.

INVESTOR UPDATE (08-30-2007) - The United States Attorney for the Eastern District of California has indicted Donald F. Neuhaus, Kimberly A. Snowden, and several others for their role in selling policies through Secure Investment Services and American Financial Services. Click here to view a copy of the indictment.

Criminal Charges against the Defendants

On August 22, 2007, the United States Attorney filed an Indictment against Donald F. Neuhaus, Kimberly A. Snowden, and several others who participated in the fraudulent investment scheme by selling policies or issuing non-existent bonds.

Lawsuit by the SEC and Appointment of Receiver

On August 23, 2007, the United States Securities and Exchange Commission ("SEC") filed a Complaint against Secure Investment Services, Inc., American Financial Services, Inc., Lyndon Group, Inc., Donald F. Neuhaus, and Kimberly A. Snowden alleging violation of the federal securities laws. On that same day, SEC filed its Application for Temporary Restraining Order and Order to Show Cause and Memorandum of Points and Authorities in Support.

Defendants' counsel then sent an e-mail to the Court requesting additional time to respond to the Application for Temporary Restraining Order. On August 24, 2007, the Defendants filed a formal Request for Adequate Time to Respond and the SEC filed a Response to Defendants' Request for Extension.

That same day, the Court entered the Order Appointing Temporary Receiver and Temporary Restraining Order and Order to Show Cause. As a result of those Orders, all of the Defendants' assets were frozen. In addition, Michael J. Quilling was appointed Receiver for Secure Investment Services, Inc. ("SIS"), American Financial Services, Inc. ("AFS"), and Lyndon Group, Inc ("LGI"). That temporary appointment was converted into a permanent Order Appointing Receiver on October 31, 2007.

Those Orders also set a preliminary injunction hearing for September 21, 2007. On August 28, 2007, the Defendants filed a Application for Continuance of Hearing on Preliminary Injunction. On August 31, 2007, the Court entered its Order Resetting Hearing on Preliminary Injunction to October 26, 2007, which keeps the Temporary Restraining Order in force until that date. On November 7, 2007, the Court entered an Order extending its temporary restraining order into a preliminary injunction for the remainder of this case.

On November 9, 2007, Donald Neuhaus filed his Answer denying liability for his actions and requesting a jury trial. On December 5, 2007, the Receiver filed a Statement of Fact of Death notifying the Court that Donald Neuhaus had died during these proceedings.

On Novmber 11, 2007, Kimberly Snowden filed her Answer denying liability for her actions and requesting a jury trial.

On January 8, 2008, SIS, AFS, and LGI filed their Consent to have a Judgment of Permanent Injunctive Relief entered against them in these proceedings. On January 10, 2008, the Court entered its Judgment of Permanent Injunctive Relief that effectively prohibits SIS, AFS, LGI, and their officers and agents from offering or selling securities to the public.

On June 6, 2008, the Court entered its Pretrial Scheduling Order that set this case for trial on August 18, 2009.

On September 17, 2008, the Reciever filed his Motion to Expand Receivership to Include Cash For Life Trust. Cash For Life Trust is a separate entity through which Donald F. Neuhaus held ownership of one particular insurance policy. The Court entered an Order appointing Michael J. Quilling as Receiver for Cash For Life on October 15, 2008.

On October 3, 2008, the SEC filed its Motion for Voluntary Dismissal of its claims against the estate of the deceased Donald F. Neuhaus. Among other things, the SEC believes that Neuhaus already transferred all of his significant assets to the Receiver as part of their Compromise and Settlement Agreement and that a judgment against Neuhaus could not be collected. The Court entered an Order on November 6, 2008, dismissing the SEC's claims against Neuhaus' estate.

The SEC filed its Designation of Expert Witnesses on October 9, 2008.

On February 4, 2009, the SEC filed its Motion for Summary Judgment asking the Court to enter judgment against Kimberly Snowden for violating securities laws. The SEC believes the undisputed facts show that Snowden defrauded investors with false and misleading statements, misused investor funds, and offered and sold unregistered securities. It asks for an order directing Snowden to disgorge $574,518.45 plus pre-judgment interest in the amount of $53,103.32. In support of its motion, the SEC filed numerous pleadings that investors may find interesting. These include a Memorandum or Points and Authorities, a Statement of Facts, the Declaration of Thomas J. Eme (Exhibits 1-3 - Exhibits 4-7 - Exhibit 8 - Exhibit 9-14 - Exhibit 14 cont'd - Exhibits 15-24), and the Declaration of Milo Segner (Exhibits 1-11 - Exhibits 12-16 - Exhibits 17-27 - Exhibits 28-29). Those pleadings and the supporting exhibits explain in detail each act of wrongdoing committed by Donald Neuhaus, Kimberly Snowden, and the investment companies in this case.

The SEC filed a Reply in support of its Motion for Summary Judgment against Kimberly Snowden on March 2, 2009. It noted that Ms. Snowden had not filed a reply within the set deadline to do so.

Kimberly Snowden filed a Reply on March 4, 2009, asking the Court to delay ruling on the SEC's Motion for Summary Judgment until the criminal case against Ms. Snowden concludes. That same day, Ms. Snowden filed an Amended Motion to Stay this case until the her criminal case concluded. The SEC filed a Opposition to Snowden's motion on March 19, 2009. Ms. Snowden filed a Reply on March 26, 2009. On April 10, 2009, the Court entered a Order denying Snowden's motion to delay this case.

On May 26, 2009, the Court entered an Order awarding summary judgment to the SEC against Defendant Kimberly Snowden for her role in managing these fraudulent investment companies. The Court found that Snowden violated the anti-fraud and registration provisions of federal securities laws. Among other things, it found that "Snowden knew the investors’ funds were being misused yet she continued to misrepresent the truth to investors." It also ordered her to disgorge a total of $627,621.77 that she received from the fraudulent investment scheme.

The SEC has filed a Status Report describing the remedies that it may pursue against Defendant Kimberly Snowden and the entities now in receivership. Consistent with its recommendation, the SEC filed a Stipulation asking to dismiss its claims against Defendants Secure Investment Services Inc., American Financial Services Inc., and Lyndon Group Inc. The Court entered an Order dismissing the SEC's claims against those defendants on September 16, 2009. Since those entities are now in receivership, there is no reason for the SEC to pursue claims against them. Their assets are being collected and will be distributed to defrauded investors who have an allowed claim consistent with the Court approved claim procedure.

Appointment of Examiner and Activities with Respect to Investor Claims

On October 25, 2007, the Receiver filed a Stipulated Motion to Approve Claim Procedure Plan and Claim Form. On October 29, 2007, the Court entered its Order approving the Receiver's plan.

On November 28, 2007, the Receiver filed his Stipulated Motion to Appoint an Examiner in these proceedings. The Examiner is a court-appointed officer who represents the interests of the investors as a whole. Appointing an Examiner will ensure that the investors' interests are being advocated at all times during these proceedings. On December 3, 2007, the Court entered its Stipulated Order Appointing Examiner.

On January 2, 2008, the Receiver filed his First Motion to Allow "A" Claims. That motion addressed 41 claims with a total net claim amount of $1,441,155.00. On February 5, 2008, the Court entered its Order Granting the Receiver's First Motion to Allow "A" Claims.

The Receiver is still in the process of receiving, verifying, and approving other claims submitted in this case. Those claims will be addressed in future motions submitted to the Court on a quarterly basis for allowance or disallowance.

On October 3, 2008, the Katsuren Family Trust filed a Motion for Limited Intervention and Return of Funds. That motion alleges that Elke Katsuren's $200,000 investment is not part of the pooled receivership estate assets. The Katsuren Family Trust claims that this Court entered its Freeze Order before SIS had access to those funds. It also claims that Elke Katsuren rescinded her investment contract with SIS within 10 days of sending the money. On October 24, 2008, the Court entered a Stipulation and Order to return funds to the Katsuren Family Trust.

On February 6, 2009, Gordon Harvey and the Harvey Family Trust filed a Motion for Limited Intervention and Return of Funds and a Memorandum of Points and Authorities. That motion alleges that the Harvey Family Trust's $200,000 investment is not part of the pooled receivership estate assets. Its situation is identical to the Katsuren Family Trust's because the Court entered the Freeze Order before SIS had access to funds from the Harvey Family Trust. It also rescinded its investment contract within 10 days of sending those funds to SIS. The SEC filed its Opposition to the motion because, among other things, Harvey's check was deposited into SIS's account before the SEC froze its assets. Harvey filed a Reply on March 2, 2009. The Court entered an Order on March 26, 2009, that denied Harvey's motion for not being filed in a timely manner.

On July 29, 2009, the Receiver filed his Second Motion to Allow "A" Claims. That motion addressed 123 claims with a total net claim amount of $4,893,405.76. On September 2, 2009, the Court entered its Order Granting the Receiver's Second Motion to Allow "A" Claims.

On October 8, 2009, the Receiver filed his Third Motion to Allow "A" Claims. That motion addressed 159 claims with a total net claim amount of $5,980,206.69. On November 5, 2009, the Court entered its Order Granting the Receiver's Third Motion to Allow "A" Claims.

The Receiver filed his Fourth Motion to Allow "A" Claims that addressed 81 claims with a total net claim amount of $2,855,931.15. On February 4, 2010, the Court entered its Order Granting the Receiver's Fourth Motion to Allow "A" Claims.

The Receiver filed his Fifth Motion to Allow "A" Claims that addressed 79 claims with a total net claim amount of $3,485,577.72. On May 12, 2010, the Court entered its Order Granting the Receiver's Fifth Motion to Allow "A" Claims.

The Receiver filed his Motion to Adjust "A" Claims that addressed 91 claims with a total net claim amount of $2,828,364.94.

The Receiver filed his Sixth Motion to Allow "A" Claims (Exhibit 1) that addressed 65 claims with a total net claim amount of $2,018,613.14.

The Receiver filed his Second Motion to Adjust "A" Claims (Exhibit 1) that addressed 22 claims with a total net claim amount of $436,990.00. The Receiver filed the motion to adjust claims that were overstated and to deny claims not properly attributed to the receivership estate.

Findings of the Receiver

On May 8, 2008, the Receiver filed his Interim Report for the Period Ended April 30, 2008.

On October 21, 2008, the Receiver filed his Interim Report for the Period Ended September 30, 2008. The Court entered its Order approving that report on December 10, 2008.

On December 7, 2009, the Receiver filed his Interim Report for the Period Ended October 31, 2009. The Court entered its Order approving that report on December 10, 2008.

Appointment of Professionals to Represent the Receivership Estate

On August 29, 2007, the Receiver filed a Stipulated Motion to Employ Quilling Selander Cummiskey & Lownds, P.C. ("QSCL") as legal counsel. The Receiver believes that hiring QSCL is in the receivership estate's best interests given the firm's experience in handling other receiverships involving large viatical companies with insurance policy portfolios valued in the hundreds of millions of dollars. On September 7, 2007, the Court entered its Order authorizing the Receiver to employ QSCL.

On August 29, 2007, the Receiver filed a Stipulated Motion to Employ Boutin Detino Gibson Di Giusto Hodell Inc. as local counsel. The Receiver believes that this is in the receivership estate's best interests given the firm's extensive practice in the federal court for the Eastern District of California. On September 7, 2007, the Court entered its Order authorizing the Receiver to employ Boutin Detino Gibson Di Giusto Hodell Inc.

On November 30, 2007, the Receiver filed a Stipulated Motion to Employ Litzler, Segner, Shaw & McKenney, LLP ("LSSM") as his accountants. The Receiver believes that hiring LSSM is in this receivership estate's best interests given LSSM's extensive experience in forensic accounting for federal equitable receiverships. Furthermore, LSSM has already served as an expert witness in this case for the Securities & Exchange Commission and is already familiar with accounts and underlying transactions in these proceedings. On December 10, 2007, the Court entered its Order authorizing the Receiver to employ LSSM.

Receiver's Activities with Respect to the Portfolio of Insurance Policies

The Receivership Estate's largest single asset is the portfolio of life insurance policies owned or otherwise managed by SIS, AFS, and LGI. There are at least 42 separate policies with a combined value of death benefits exceeding $56 million. Those policies, however, carry an annual premium load of at least $1.7 million. By the time the Receiver was appointed, SIS, AFS, and LGI only had approximately $65,000.00 in their combined bank accounts available to pay premiums.

On August 29, 2007, the Receiver filed a Stipulated Motion to Employ National Viatical, Inc. ("NVI") to manage and monitor the portfolio of life insurance policies held by SIS, AFS, and LGI. The Receiver believes that hiring NVI is in the receivership estate's best interests because NVI has extensive expertise in both the insurance and viatical field and has successfully managed large portfolios in other receivership cases. In the first week of this receivership, NVI and the Receiver identified and saved two policies scheduled to lapse for non-payment. On September 7, 2007, the Court entered its Order authorizing the Receiver to employ NVI.

In order to maximize the return to investors and prevent any policies from lapsing, the Receiver filed his Stipulated Motion to Obtain Interim Bank Financing on August 29, 2007. Bank financing gives the Receiver a line of credit from which to pay policy premiums and other administrative expenses as they become due. The immediate need for these funds is underscored by the fact that SIS, AFS, and LGI do not have enough cash in their bank accounts to carry the premiums. On September 7, 2007, the Court entered its Order authorizing the Receiver to obtain bank financing. On February 21, 2008, the Receiver filed his Unopposed Motion to Approve Bank Financing, which would increase the available line of credit to $3 million. This increase would guarantee that the Receiver has enough cash available to pay all premiums due for the 2008 calendar year. On March 14, 2008, the Court entered its Order authorizing the increase in bank financing. The Court entered another Order on February 26, 2009, which increased the bank financing to $4 million and ensures that the Receiver can pay all premiums through 2009 without risk of any lapsing.

On August 29, 2007, the Reciever also filed his Stipulated Motion to Pool Assets for the common benefit of the receivership estate's investors and creditors. This is consistent with the controlling law in the Ninth Circuit and most other districts in the United States. Pooling receivership assets prevents a situation where some investors obtain a recovery while others do not based on the sheer luck of how Defendants handled their funds. Instead, pooled assets would be treated as one fund to be distributed pro rata to each investor with an approved claim. On September 7, 2007, the Court entered its Order authorizing the Receiver to pool receivership estate assets.

On May 30, 2008, the Receiver filed the following motions: (1) Motion for Authorization to Abandon the BIE-F&L Policy; (2) Motion for Authorization to Abandon the KIL-D Policy; (3) Motion for Authorization to Abandon the SHO-I(1) Policy; (4) Motion for Authorization to Abandon the SLE-K(1) Policy; (5) Motion for Authorization to Abandon the SLE-K(2) Policy; and (6) Motion for Authorization to Abandon the SLE-K(3) Policy. On June 12, 208, the Receiver filed his Request for Evidentiary Hearing and Extended Argument for this motions.

On June 10, 2008, an investor called the Zink & Lendi Profit Sharing Plan filed its Notice of Opposition to the Motion for Authorization to Abandon the SHO-I(1) Policy. It also filed a Notice of Opposition to the Motion for Authorization to Abandon the KIL-D Policy on June 12, 2008.

On June 11, 2008, the Reciever filed the following motions: (1) Motion for Authorization to Abandon the ARM-A Policy; (2) Motion for Authorization to Abandon the BAU-R&L(1) Policy; (3) Motion for Authorization to Abandon the BER-E&B(1) Policy; (4) Motion for Authorization to Abandon the BER-E&B(2) Policy; (5) Motion for Authorization to Abandon the FOW-S(1) Policy; (6) Motion for Authorization to Abandon the QUI-W(1) Policy; and (7) Motion for Authorization to Abandon the QUI-W(2) Policy. On June 12, 208, the Receiver filed his Request for Evidentiary Hearing and Extended Argument for this motions.

On June 17, 2008, Lon Halley filed a Declaration in Response to the Motion to Abandon the SHO-I(1) Policy.

On June 20, 2008, Defendant Kimberly Snowden filed notices of opposition regarding the SLE-K(1) Policy, SHO-I(1) Policy, SLE-K(2) Policy, SLE-K(3) Policy, BIE-F&L Policy, and KIL-D Policy. On July 16, 2008, Defendant Kimberly Snowden filed notices of opposition regarding the BAU-R&L(1) Policy, BER-E&B(2) Policy, QUI-W(1) Policy, QUI-W(2) Policy, FOW-S(1) Policy, ARM-A Policy, and BER-E&B(1) Policy.

On June 26, 2008, the Examiner filed his Statement and Brief Regarding Motions to Abandon Policies (Affidavit).

On July 1, 2008, Bazzle John Wilson filed his Statement regarding those motions.

On July 28, 2008, the Court entered its Order authorizing the Receiver to abandon the following policies: (1) the BIE-F&L policy; (2) the SHO-I(1) policy; (3) the KIL-D policy; (4) the SLE-K(1) policy; (5) the SLE-K(2) policy; (6) the SLE-K(3) policy; (7) the ARM-A policy; (8) the BAU-R&L(1) policy; (9) the BER-E&B(1) policy; (10) the BER-E&B(2) policy; (11) the FOW-S(1) policy; (12) the QUI-W(1) policy; and (13) the QUI-W(2) policy. That order authorizes the Reciever to abandon his fractional interest in those policies at his discretion rather than continue to pay premiums on them.

On July 17, 2008, the Reciever filed his Motion to Transfer Donald Neuhaus' Interest in Numerous Insurance Policies to the Receiver. On August 12, 2008, the Receiver filed notice that the motion was unopposed and the Court entered an Order granting the motion.

On January 27, 2009, the Receiver filed his Second Motion to Transfer Neuhaus' Interest in Numerous Insurance Policies to the Receiver. The Court entered its Order to approve those transfers on February 27, 2009.

On February 4, 2009, the Receiver filed his Third Motion to Transfer Interests in Insurance Policy to the Receiver. The Court entered its Order to approve those transfers on February 27, 2009.

     Specific Motions Relating to the BAU-R&L Policy

On April 17, 2009, the Receiver filed his Motion to Compel Payment of Premium Share from Ralph and Barbara Musalo. The Court entered its Order granting that motion on May 22, 2009.

On April 17, 2009, the Receiver filed his Motion to Compel Payment of Premium Share from Clifford Palm. The Court entered its Order granting that motion on May 22, 2009.

On April 17, 2009, the Receiver filed his Motion to Compel Payment of Premium Share from David Parnham. The Court entered its Order granting that motion on May 22, 2009.

     Specific Motions Relating to the BIE-F&L Policy

On October 30, 2008, the Receiver filed his Motion to Compel Payment of Premium Share from the Estate of Benjamin McNutt. The Court entered its Order granting that motion on December 12, 2008.

     Specific Motions Relating to the BOT-M Policy

On April 17, 2009, the Receiver filed his Motion to Compel Payment of Premium Share from James Kufeldt. The Court entered its Order granting that motion on May 26, 2009.

On April 17, 2009, the Receiver filed his Motion to Compel Payment of Premium Share from Sharon Limroth. The Court entered its Order granting that motion on May 22, 2009.

On June 5, 2009, the Receiver filed his Motion to Compel Transfer of Interest from Timothy and Margie Wing. The Receiver filed a Notice withdrawing that motion on June 12, 2009.

     Specific Motions Relating to the DAM-A&C Policy

On May 21, 2009, the Receiver filed his Motion to Compel Payment of Premium Share from Tracy Elling. The Reciever filed his Notice withdrawing that motion on June 17, 2009.

On May 21, 2009, the Receiver filed his Motion to Compel Payment of Premium Share from Showcase Financial Services, Inc. Profit Sharing Plan. He then filed his Notice withdrawing that motion because all issues were resolved with that investor.

On May 21, 2009, the Receiver filed his Motion to Compel Payment of Premium Share from Jim Weist. The Court entered its Order granting that motion on June 19, 2009.

On May 21, 2009, the Receiver filed his Motion to Compel Payment of Premium Share from Bazzle John Wilson. The Court entered its Order granting that motion on June 19, 2009.

     Specific Motions Relating to the FOW-S(1) Policy

On November 7, 2008, the Receiver filed his Motion to Compel Payment of Premium Share from Wayne Carroll. The Court entered its Order granting that motion on December 11, 2008.

The Receiver has learned that the individual insured by the FOW-S(1) policy has died and the policy has matured. The FOW-S(1) policy is wholly owned by the receivership estate and the insurance provider paid a total death benefit of $1,506,233.45 to the Receiver. That amount is now pooled with all other receivership estate assets for distribution to all investors who filed an approved claim against the estate.

     Specific Motions Relating to the FOW-S(2) Policy

The Receiver has learned that the individual insured by the FOW-S(2) policy has died and the policy has matured. The FOW-S(2) poilcy is a multiple-owner policy with 29 individuals listed as the the owners and beneficiaries of record. The Receiver had just begun to send transfer forms to those investors because the insurance company only recently determined that it was a multiple-owner policy rather than a policy wholly owned by the receivership estate. When it matured, the Receiver had paid $80,700.00 in premiums on behalf of the other fractional owners. Furthermore, receivership records indicate that one owner did not pay for his interest in the policy. The Receiver, therefore, filed a Motion to Compel Payment of Death Beneefits to the Receiver so he could recover the $80,700.00 spent for premiums, recover the fractional ownership interest that one owner did not pay for, and distribute the remaining amounts due to the other owners of record. He also filed a Notice of Communication Received from Investors and the Examiner filed a Notice of Investor Responses and a Second Notice of Investor Responses. The Court entered an Order granting that motion on May 22, 2009. The insurance provider has since paid a total death benefit of $1,508,506.57 to the Receiver and he will be distrubting the death benefits in the near future to owners listed in this policy.

     Specific Motions Relating to the JER-E(4) Policy

On October 21, 2008, the Receiver filed his Motion to Compel Ernest Jeremias to Execute Reinstatement Forms. Since that time, the Receiver has had extensive correspondence with Ernest Jeremias and obtained his reinstatement form and supporting materials. Accordingly, on January 27, 2009, the Receiver filed a Notice withdrawing his motion.

After that, the insurance company continued requesting additional forms from Mr. Jeremias along with a physical examination and financial statement. Mr. Jeremias, however, refused to comply and the Receiver filed a Second Motion to Compel Ernest Jeremias to Execute Reinstatement Forms on May 21, 2009. The Court entered its Order granting that motion on June 19, 2009.

     Specific Motions Relating to the KEU-P Policy

On April 17, 2009, the Receiver filed his Motion to Compel Payment of Premium Share from Robert Avery. The Court entered its Order granting that motion on May 22, 2009.

On April 17, 2009, the Receiver filed his Motion to Compel Payment of Premium Share from Rosaria Fischetto. The Court entered its Order granting that motion on May 22, 2009.

On April 17, 2009, the Receiver filed his Motion to Compel Payment of Premium Share from Joseph Montgomery. He then filed his Notice withdrawing that motion because all issues were resolved with that investor.

On April 17, 2009, the Receiver filed his Motion to Compel Payment of Premium Share from Monell Ormbrek. He then filed his Notice withdrawing that motion because all issues were resolved with that investor.

On April 17, 2009, the Receiver filed his Motion to Compel Payment of Premium Share from Mildred Parkinson. He then filed his Notice withdrawing that motion and filed an Amended Motion to Compel Payment of Premium Share. The Court entered its Order granting that motion on June 19, 2009.

     Specific Motions Relating to the KIL-D Policy

On November 19, 2008, the Receiver filed his Motion to Compel Payment of Premium Share from Marc Damian Chips. The Court entered its Order granting that motion on January 6, 2009.

On June 5, 2009, the Receiver filed his Motion to Compel Payment of Premium Share from Gordon L.K. Wong DDS, APDC Profit Sharing Plan. The Reciever filed his Notice withdrawing that motion on June 16, 2009.

     Specific Motions Relating to the QUI-W(1) Policy

On December 4, 2008, the Receiver filed his Motion to Compel Payment of Premium Share from Marc Damian Chips. The Court entered its Order granting that motion on January 6, 2009.

     Specific Motions Relating to the QUI-W(2) Policy

On December 4, 2008, the Receiver filed his Motion to Compel Payment of Premium Share from Jill Canatnia. The Court entered its Order granting that motion on January 6, 2009.

     Specific Motions Relating to the RIC-J(1) Policy

On May 14, 2010, the Receiver filed his Motion to Compel Payment of Premium Share from Ron Buckheit.

On May 14, 2010, the Receiver filed his Motion to Compel Payment of Premium Share from David Green.

On May 14, 2010, the Receiver filed his Motion to Compel Payment of Premium Share from Monica Zukrow.

     Specific Motions Relating to the RIC-J(2) Policy

On May 14, 2010, the Receiver filed his Motion to Compel Payment of Premium Share from Edwin D. Guttry.

     Specific Motions Relating to the SHO-I(1) Policy

On October 9, 2008, the Receiver filed his Motion to Compel Lon W. Halley to Transfer Ownership Interest. The Court entered a Minute Order setting the motion for hearing on December 15, 2008, at 9:00 a.m. Mr. Halley filed his Response on November 24, 2008. The Court entered its Order granting that motion on December 22, 2008.

On October 29, 2008, the Receiver filed his Motion to Compel Payment of Premium Share from JoAnne Barbier d/b/a Heritage Enterprises. The Court entered its Order granting that motion on December 11, 2008.

     Specific Motions Relating to the SHU-A&H(1) Policy

On October 21, 2008, the Receiver filed his Motion for Order Directing Disclosure of Policy Information to the Receiver.

On April 17, 2009, the Receiver filed his Motion to Compel Payment of Premium Share from Stephen Andrews. He then filed his Notice withdrawing that motion because all issues were resolved with that investor.

On April 17, 2009, the Receiver filed his Motion to Compel Payment of Premium Share from Susan Andrews. He then filed his Notice withdrawing that motion because all issues were resolved with that investor.

On April 17, 2009, the Receiver filed his Motion to Compel Payment of Premium Share from Seadra Nodland. The Court entered its Order granting that motion on May 26, 2009.

On April 17, 2009, the Receiver filed his Motion to Compel Payment of Premium Share from Steve Ormbreck. He then filed his Notice withdrawing that motion because all issues were resolved with that investor.

On April 17, 2009, the Receiver filed his Motion to Compel Payment of Premium Share from Rose Ramirez. The Court entered its Order granting that motion on May 22, 2009.

The Receiver filed his Fourth Motion to Transfer Interests that directs the insurance provider to accept investors' voluntary transfer forms without the written consent of all other owners in this policy. The Court entered its Order granting that motion on June 19, 2009.

     Specific Motions Relating to the SLE-K(1) Policy

On December 4, 2008, the Receiver filed his Motion to Compel Payment of Premium Share from Jill & Anthony Canatnia. The Court entered its Order granting that motion on January 6, 2009.

     Specific Motions Relating to the SLE-K(2) Policy

On December 4, 2008, the Receiver filed his Motion to Compel Payment of Premium Share from Peter Pappas. The Court entered its Order granting that motion on January 6, 2009.

On April 17, 2009, the Receiver filed his Motion to Compel Payment of Premium Share from Michael Macnama. The Court entered its Order granting that motion on May 22, 2009.

     Specific Motions Relating to the SLE-K(3) Policy

On October 21, 2008, the Receiver filed his Motion to Compel Payment of Premium Share from Robert Erickson. The Court entered its Order granting that motion on December 10, 2008.

     Specific Motions Relating to the SWA-R&G Policy

On April 17, 2009, the Receiver filed his Motion to Compel Payment of Premium Share from Frances Burrow. The Court entered its Order granting that motion on May 22, 2009.

On April 17, 2009, the Receiver filed his Motion to Compel Payment of Premium Share from Terry Cardenas. The Court entered its Order granting that motion on May 22, 2009.

On April 17, 2009, the Receiver filed his Motion to Compel Payment of Premium Share from Billy Chu. The Court entered its Order granting that motion on May 22, 2009.

On April 17, 2009, the Receiver filed his Motion to Compel Payment of Premium Share from David Dailey. The Court entered its Order granting that motion on May 22, 2009.

On April 17, 2009, the Receiver filed his Motion to Compel Payment of Premium Share from Equity Plus, LLC. The Court entered its Order granting that motion on May 26, 2009.

On April 17, 2009, the Receiver filed his Motion to Compel Payment of Premium Share from I.F. Independent Financial Corporation. The Court entered its Order granting that motion on May 26, 2009.

On April 17, 2009, the Receiver filed his Motion to Compel Payment of Premium Share from Kathryn Johnson. The Court entered its Order granting that motion on May 26, 2009.

On April 17, 2009, the Receiver filed his Motion to Compel Payment of Premium Share from James Kennedy. The Court entered its Order granting that motion on May 26, 2009.

On April 17, 2009, the Receiver filed his Motion to Compel Payment of Premium Share from Richard Kessener. The Court entered its Order granting that motion on May 22, 2009.

On April 17, 2009, the Receiver filed his Motion to Compel Payment of Premium Share from Lakeside East Limited Partnership. The Court entered its Order granting that motion on May 26, 2009.

On April 17, 2009, the Receiver filed his Motion to Compel Payment of Premium Share from Rose Ramirez. The Court entered its Order granting that motion on May 22, 2009.

On April 17, 2009, the Receiver filed his Motion to Compel Payment of Premium Share from Judith Reaves. The Court entered its Order granting that motion on May 22, 2009.

On April 17, 2009, the Receiver filed his Motion to Compel Payment of Premium Share from Stephanie Tyler. The Court entered its Order granting that motion on May 22, 2009.

On August 25, 2009, the Receiver filed his Motion to Compel Payment of Premium Share from James P. Hutler and Jacqueline A. Hutler. The Court entered its Order granting that motion on September 25, 2009.

     Specific Motions Relating to the WIL-E&C Policy

On August 26, 2009, the Receiver filed his Motion to Compel Transfer of Ownership Interests from LPG Investments and WED Marketing. The Receiver has determined that those entities are alter egos for David Goldenberg, who supplied many of the fraudulent bonds that Donald Neuhuas used to run his fraudulent investment scheme. Neither entity paid for its interest in this policy. Rather, it appears that Mr. Neuhaus assigned those interests as compensation to Mr. Goldenberg. The Receiver contends that neither LPG Investments nor WED Markting have a legitimate claim to keep their interests. The Court entered its Order granting that motion on September 25, 2009.

Developments Related to Donald Neuhaus and Kimberly Snowden

On October 25, 2007, Donald Neuhaus and Kimberly Snowden joined the Receiver in filing a Stipulated and Unopposed Order Authorizing the Receiver's Entry into Compromise and Settlement Agreement. That agreement permits the Receiver to take control of the Defendants' vehicle, home, and their portfolio of at least 14 insurance policies while the Court evaluates the parties' competing claims to those assets. In the meantime, the Receiver has the right to maintain or sell those assets as dictated by the receivership estate's best interests. On October 29, 2007, the Court entered its Order approving the agreement.

On October 31, 2007, Donald Neuhaus and Kimberly Snowden entered into a Stipulation to Enter Agreed Order Appointing Receiver. Donald Neuhaus also entered into a Stipulation Regarding the Preliminary Injunction that same day.

On November 7, 2007, the Court entered an Order extending its Temporary Restraining Order into a preliminary injunction for the remainder of this case or until further orders by the Court.

On November 9, 2007, Donald Neuhaus filed his Answer denying liability for his actions and requesting a jury trial. On December 5, 2007, the Receiver filed a Statement of Fact of Death notifying the Court that Donald Neuhaus had died during these proceedings. On February 29, 2008, the SEC filed a Motion to Substitute Successor to Defendant Donald Neuhaus, which would have Linda Neuhaus serve as the successor and representative for Donald Neuhaus on behalf of his estate. On March 25, 2008, the Court entered an Order of Substitution granting that motion.

On Novmber 11, 2007, Kimberly Snowden filed her Answer denying liability for her actions and requesting a jury trial.

On March 7, 2008, the SEC joined Kimberly Snowden in filing their Joint Status Report. In that report, the parties state that they anticipate going to trial in late 2008 or early 2009.

On May 21, 2008, the parties filed a Second Joint Status Report and statement regarding their discovery conference. In it, both parties agree that they can be ready for trial in March 2009.

On July 8, 2008, the Reciever filed a Statement of Fact of Death giving notice that Linda Neuhaus, the substitute successor to Defendant Donald Neuhaus, had died.

On October 3, 2008, the SEC filed its Motion for Voluntary Dismissal of its claims against the estate of the deceased Donald F. Neuhaus. Among other things, the SEC believes that Neuhaus already transferred all of his significant assets to the Receiver as part of their Compromise and Settlement Agreement and that a judgment against Neuhaus could not be collected.

On February 4, 2009, the SEC filed its Motion for Summary Judgment asking the Court to enter judgment against Kimberly Snowden for violating securities laws. The SEC believes the undisputed facts show that Snowden defrauded investors with false and misleading statements, misused investor funds, and offered and sold unregistered securities. It asks for an order directing Snowden to disgorge $574,518.45 plus pre-judgment interest in the amount of $53,103.32. In support of its motion, the SEC filed numerous pleadings that investors may find interesting. These include a Memorandum or Points and Authorities, a Statement of Facts, the Declaration of Thomas J. Eme (Exhibits 1-3 - Exhibits 4-7 - Exhibit 8 - Exhibit 9-14 - Exhibit 14 cont'd - Exhibits 15-24), and the Declaration of Milo Segner (Exhibits 1-11 - Exhibits 12-16 - Exhibits 17-27 - Exhibits 28-29). Those pleadings and the supporting exhibits explain in detail each act of wrongdoing committed by Donald Neuhaus, Kimberly Snowden, and the investment companies in this case.

The SEC filed a Reply in support of its Motion for Summary Judgment against Kimberly Snowden on March 2, 2009. It noted that Ms. Snowden had not filed a reply within the set deadline to do so.

Kimberly Snowden filed a Reply on March 4, 2009, asking the Court to delay ruling on the SEC's Motion for Summary Judgment until the criminal case against Ms. Snowden concludes. That same day, Ms. Snowden filed an Amended Motion to Stay this case until the her criminal case concluded. The SEC filed a Opposition to Snowden's motion on March 19, 2009. Ms. Snowden filed a Reply on March 26, 2009. On April 10, 2009, the Court entered a Order denying Snowden's motion to delay this case.

On October 30, 2009, the SEC and Ms. Snowden filed a joint Stipulation for judgment against her and a disgorgement order in the amount of $627,621.77. The Court entered its Final Judgment against Ms. Snowden on November 6, 2009.

Receivership Estate Expenses

On February 21, 2008, the Receiver filed his First Interim Application to Allow and Pay (1) Receiver's Fees and Expenses and (2) Attorneys Fees and Expenses. The Court entered an Order allowing those fees on March 25, 2008.

On February 21, 2008, the Receiver filed his First Interim Application to Allow and Pay Attorney's Fees and Expenses of Local Counsel. The Court entered an Order allowing those fees on March 25, 2008.

On May 15, 2008, the Receiver filed his Second Interim Application to Allow and Pay (1) Receiver's Fees and Expenses and (2) Attorneys Fees and Expenses.

On May 15, 2008, the Receiver filed his Second Interim Application to Allow and Pay Attorney's Fees and Expenses of Local Counsel.

On July 9, 2008, the Examiner filed his First Interim Fee Application. The Court entered an Order approving those fees on September 8, 2008.

On July 14, 2008, the Receiver filed his Stipulated Motion to Authorize Receiver to Employ Facio Abogados. The Receiver will employ Facio Abogados, which is located in Costa Rica, to help investigate and file claims for payment with the bonding company Provident Capital Indemnity, which is located there. The Court entered its Order granting that motion on July 22, 2008.

On September 17, 2008, the Receiver filed his Third Interim Application to Allow and Pay (1) Receiver's Fees and Expenses and (2) Attorneys Fees and Expenses. The Court entered its Order granting that motion on October 15, 2008.

On September 17, 2008, the Reciever filed his Third Interim Application to Allow and Pay Attorney's Fees and Expenses of Local Counsel. The Court entered its Order granting that motion on October 15, 2008.

On November 21, 2008, the Examiner filed his Second Interim Fee Application. The Court entered its Order granting that motion on January 20, 2009.

On December 31, 2008, the Reciever filed his Fourth Interim Application to Allow and Pay Attorney's Fees and Expenses of Local Counsel. The Court entered its Order granting that motion on February 4, 2009.

On December 31, 2008, the Receiver filed his Fourth Interim Application to Allow and Pay (1) Receiver's Fees and Expenses and (2) Attorneys Fees and Expenses. The Court entered its Order granting that motion on February 4, 2009.

On March 6, 2009, the Examiner filed his Third Interim Fee Application. The Court entered its Order granting that motion on March 25, 2009.

On April 16, 2009, the Receiver filed his Fifth Interim Application to Allow and Pay (1) Receiver's Fees and Expenses and (2) Attorneys Fees and Expenses. The Court entered its Order granting that motion on May 18, 2009.

On April 16, 2009, the Reciever filed his Fifth Interim Application to Allow and Pay Attorney's Fees and Expenses of Local Counsel. The Court entered its Order granting that motion on June 2, 2009.

On July 13, 2009, the Reciever filed his Sixth Interim Application to Allow and Pay Attorney's Fees and Expenses of Local Counsel. The Court entered its Order granting that motion on August 11, 2009.

On November 13, 2009, the Reciever filed his Seventh Interim Application to Allow and Pay Attorney's Fees and Expenses of Local Counsel. The Court entered its Order granting that motion on December 18, 2009.

On November 13, 2009, the Receiver filed his Sixth Interim Application to Allow and Pay (1) Receiver's Fees and Expenses and (2) Attorneys Fees and Expenses. The Court entered its Order granting that motion on December 18, 2009.

On April 5, 2010, the Reciever filed his Eighth Interim Application to Allow and Pay Attorney's Fees and Expenses of Local Counsel. The Court entered its Order granting that motion on May 12, 2010.

On July 14, 2010, the Reciever filed his Ninth Interim Application to Allow and Pay Attorney's Fees and Expenses of Local Counsel.

On July 14, 2010, the Reciever filed his Seventh Interim Application to Allow and Pay (1) Receiver's Fees and Expenses and (2) Attorneys Fees and Expenses.

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