Judge OKs using force to seize Gold-Quest records

A federal judge has directed deputy U.S. marshals to use necessary force to help a receiver obtain property and records of Las Vegas-based Gold-Quest International, which the government accuses of operating a $27.9 million fraud.

The Securities and Exchange Commission, which sued Gold-Quest and Kansas-based Cook Receiver Services, previously said that the defendants were not cooperating.

In a preliminary injunction issued Friday, U.S. District Judge Lloyd George ordered defendants to cooperate and assist the receiver. George also has said he was sending deputy marshals to go with the receiver to the defendants' offices.

"The U.S. Marshal is authorized to use reasonable force to assist the permanent receiver," the judge wrote in the order.

George also gave defendants in the case 10 days to turn over assets, money and other property held in foreign locations in the name of Gold-Quest and individual defendants Lord David Greene, John Jenkins and Michael McGee.

His order identifies nine accounts established at Wells Fargo Bank and two opened at e-Bullion, a Panama corporation that claims to hold accounts of electronic currency backed up with precious metals.

The judge earlier this month issued a temporary restraining order against Gold-Quest, as requested by the commission.

George issued a permanent injunction against Gold-Quest on Thursday and on Friday replaced it with an amended preliminary injunction. The new preliminary injunction freezes assets, requires accountings and prohibits destruction of documents.

The defendants are enjoined against attempting to defraud the public.

The new order gives the receiver control over Gold-Quest's Web sites. George ordered the defendants and their employees not to post any information on the sites and not to communicate with Gold-Quest investors by e-mail or telephone.

Gold-Quest of Las Vegas previously solicited investments from individuals for its alleged foreign currency trading program, which the company claimed was highly profitable. But the SEC filed a lawsuit earlier this month, saying that Gold-Quest was a Ponzi scheme in which early investors are paid with money from later investors. The SEC said Gold-Quest cheated 2,100 investors in the United States and Canada out of $27.9 million.

Michael Reed, who identified himself as attorney general of the Little Shell Nation of North Dakota, said all three defendants are members of the tribe and immune from lawsuits. The SEC said neither the United States nor Canada recognize the tribe.

One of the defendants, Jenkins, was ordered to appear in federal court at 3 p.m. May 27 to explain why he shouldn't be held in contempt of court in violating court orders.

Contact reporter John G. Edwards at jedwards@reviewjournal.com or 702-383-0420.