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[QUOTE]Originally posted by wallymac: [QB] [QUOTE]Originally posted by Ocqueoc: [qb] FYI I see the sec filed a motion today (on pacer) I'm sorry, I don't know how to cut and paste :rolleyes: or I'd put it here. I know, Tex, I should know by now but I forgot LOL [/qb][/QUOTE]Here you go: PACER UPDATE IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF GEORGIA ATLANTA DIVISION SECURITIES AND EXCHANGE COMMISSION, Plaintiff, Civil Action No. v. 1:06-CV-2568-CC CONVERSION SOLUTIONS HOLDING CORPORATION and RUFUS PAUL HARRIS a/k/a PAUL RUFUS HARRIS, Defendants. MOTION FOR DEFAULT JUDGMENT AND SUPPORTING MEMORANDUM OF LAW Plaintiff, Securities and Exchange Commission (“Commission”) hereby moves for a default judgment against both Defendant Rufus Paul Harris a/k/a Paul Rufus Harris (“Harris”) and Defendant Conversion Solutions Holding Corporation (“Conversion”), pursuant to Rule 55 of the Federal Rules of Civil Procedure. In support of its motion, Plaintiff submits the following memorandum of law. PROCEDURAL HISTORY The relevant facts are straightforward. The Complaint in this matter was filed on October 24, 2006. On November 4, 2006, Harris was served with the Summons and Complaint, along with other associated documents. Harris’s Answer to the Complaint was thus due to be filed not later than November 24, 2006. Conversion was served with the Summons and Complaint, along with other associated documents, through its registered agent for service of process, Harvard Business Services of Lewes, Delaware, on October 26, 2006. Conversion’s Answer to the Complaint was thus due to be filed not later than November 15, 2006. On November 16, 2006, Plaintiff filed the returns of service of process for both Harris and Conversion with the Court. Thereafter, on November 16, 2006, Plaintiff applied to the Clerk for an entry of default as to Conversion. On November 17, 2006, the Clerk entered a default as to Conversion. On November 28, 2006, Plaintiff applied to the Clerk for an entry of default as to Harris. On November 29, 2006, the Clerk entered a default as to Harris. On April 24, 2007, Harris filed with the Court a document styled “Defendant Conversion Solutions Holding’s Answer and Defenses to Complaint for Injunctive and Other Relief”. On May 11, 2007, Plaintiff moved to strike this Answer. Subsequently, on May 15, 2007, Harris moved that the Clerk’s entry of default be set aside and filed another Answer. On October 30, 2007, the Court granted Plaintiff’s motion to strike the Answer and denied Harris’s motion to set aside the entry of default as to himself individually and as to Conversion. On November 7, 2007, Harris filed a “Motion for Reconsideration/Rehearing of the Court’s October 30, 2007 Order Entered by This Court” and a related Motion for Enlargement of Time to File Supplemental Affidavits. In a separate pleading filed contemporaneously with this motion, Plaintiff opposes Harris’s motions for reconsideration of the Court’s October 30, 2007 Order and for Enlargement of Time. ARGUMENT A. ENTRY OF A DEFAULT JUDGMENT IS APPROPRIATE Entry of a judgment by default is appropriate against both Defendants Harris and Conversion. Defaults have been entered by the Clerk. Accordingly, the factual allegations of the Complaint, except for those relating to damages, are taken as true. 10 C. Wright, A. Miller & M. Kane, Federal Practice and Procedure, § 2688, p. 412 (2d ed. 1983); Thomson v. Wooster, 5 S.Ct. 788 (1885). B. FACTUAL ALLEGATIONS The allegations of the Complaint, which are accepted as true with regard to both defendants in accordance with the previous entries of default, include the following: 1. Conversion is a publicly-trading company with its principal place of business in Kennesaw, Georgia. Conversion was incorporated in Delaware under the name Conversion Solutions, Inc., on February 11, 2005. Conversion purports to be a “diversified holdings company which was formed to originate, fund and source funding for asset-based transactions in the private market.” 2. Conversion’s stock was quoted publicly on the OTC Bulletin Board under the symbol “CSHD,” “CSHDE” or “CDSH.OB” between August 2006 and the filing of the Complaint October 24, 2006. 3. Harris, a resident of Adairsville, Georgia, was the chief executive officer of Conversion at all relevant times through the filing of the Complaint on October 24, 2006. According to Conversion’s most recent Form 10-K, Harris has facilitated and originated projects, corporate and bond financing for more than 10 years, with experiences ranging from high-end corporate financing to bond origination. 4. In September and October 2006, Conversion issued a series of press releases, and filed with the Commission a current report and an amended current report on Form 8-K and 8-K/A, respectively, an annual report on Form 10-KSB and two amended annual reports on Forms 10-KSB/A, all of which fraudulently overstated Conversion’s assets. 5. On September 26, 2006, Conversion filed a Form 8-K (“September 26 Form 8-K”) with the Commission using Harris’ electronic signature. 6. The September 26 Form 8-K stated that Conversion’s “Board of Directors has approved a contract extension with the Caracas Group and accepted into its Asset Management Portfolio an additional 5 Billion Euro denominated Global Bonds on the Republic of Venezuela with an 11% annual coupon.” This statement was false. [/QB][/QUOTE]
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