Kristi Johnson, a key figure in the alleged Achieve Community Ponzi scheme, declined to provide detailed accounting records to the U.S. Securities and Exchange Commission in early June 2015. She invoked her Fifth Amendment right against self-incrimination, stating she had been advised she was a target of a federal criminal investigation related to the SEC's allegations. This constitutional protection allows individuals to refuse to act as a witness against themselves in proceedings involving potential fines, penalties, or forfeiture.
Troy Barnes, another defendant in the SEC lawsuit, also filed a formal response during the first week of June. Barnes, representing himself, similarly asserted his Fifth Amendment rights for each of the seventy-two points detailed in the SEC complaint. His brief reply, filed June 2nd, mirrored Johnson's, stating he "asserts his Fifth Amendment rights in answering this allegation."
The SEC's civil complaint did not name Johnson or Barnes as the only defendants. Work With Troy Barnes Inc and Achieve International LLC, both implicated entities, have failed to respond to the lawsuit. No legal counsel has appeared on their behalf, and corporations cannot proceed pro se, meaning they cannot represent themselves in court. This lack of response leaves the entities vulnerable to default judgment.
A third party, Arla Mendenhall, also sought to join the SEC's case as a plaintiff. Mendenhall has a history of participating in alleged fraudulent schemes, including Zeek Rewards, a notable online Ponzi operation. Despite her extensive record of investing in and recruiting for multiple such ventures, she claimed she possessed "no knowledge of anything illegal" when she became involved with Achieve Community. Her request to attach herself to the SEC's ongoing litigation remains unresolved following a status conference on June 3rd.
Barnes, despite a court order, did not appear by phone for the June 3rd hearing. His absence, coupled with the entities' non-response, prompted the court to issue several directives. The court ordered Work With Troy Barnes Inc and Achieve International LLC to show cause why default judgment should not be entered against them. Default judgment can be entered when a defendant fails to respond to a lawsuit, potentially leading to an adverse ruling without a full trial.
The court also ordered Troy Barnes to show cause why he should not be held in contempt for his failure to comply with a direct court order. Contempt of court charges can carry penalties, including fines or even incarceration, for disobeying judicial directives. The judge also stayed all discovery proceedings in the case until the next scheduled conference.
On June 20th, the court formalized these deadlines. Troy Barnes, Work with Troy Barnes Inc, and Achieve International LLC were given until July 2nd to provide their "show cause" responses. The next status conference for the case remains on the calendar for July 7th.