On April 20, 2021, the Securities and Exchange Commission (“SEC”) filed a civil enforcement action in the United States District Court for the Middle District of Florida against defendants: Harbor City Capital Corp., Harbor City Ventures LLC, HCCF-1 LLC, HCCF-2 LLC, HCCF-3 LLC, HCCF-4 LLC, HCCF-5 LLC, Harbor City Digital Ventures Inc., HCC Media Funding LLC, Jonathan Maroney (“Maroney”) (collectively, Defendants). The Defendants are charged with running a Ponzi scheme purported to provide bridge funding for Harbor City’s customer lead generation sales business that raised over $17 million from over 100 investors. Maroney personally misappropriated over $4 million dollars to enrich himself and his family, including the purchase and maintenance of his waterfront home and a Mercedes Benz, and to pay for his extensive credit card bills and renovation-related expenses on the house. The complaint further alleges that Maroney misused investor money by making payments to other entities unrelated to the supposed purpose of the offerings, and that he fraudulently used investor funds to make monthly interest payments and other payouts to investors in a classic Ponzi scheme fashion. The complaint also lists relief defendants Celtic Enterprises, LLC and Tonya L. Maroney, the wife of Jonathan Maroney. A relief defendant is one that received proceeds of the fraud without any legitimate entitlement to the money.

Where, as in this case, the SEC seeks the return of funds to investors, the SEC frequently appoints a receiver to assist in marshalling assets on behalf of creditors, including victimized investors. SEC-initiated receiverships often arise in connection with alleged fraudulent investment schemes.

On November 8, 2021, the District Court entered an order appointing Katherine C. Donlon as Receiver. The Court directed the Receiver to (i) determine the nature, location and value of all property interests of the Receivership Entities; (ii) take custody, control and possession of all Receivership Property and records; (iii) manage, control, operate and maintain the Receivership Estates; and (iv) take such action as necessary and appropriate for the preservation of Receivership Property. The Receiver intends to fulfill her duties and responsibilities in an expedient and efficient manner. The District Court overseeing this Receivership has broad powers and wide discretion to determine the appropriate relief.