DOJ want DFRF Enterprises civil case discovery stayed

A scheduling conference in the SEC’s Ponzi scheme case against DFRF Enterprises was held on the 29th of September.

At the hearing, the following tentative court dates were scheduled:

Initial Disclosures
10/29/15

Fact Discovery
5/31/16

Expert Disclosure
6/30/16

Defendants Expert Disclosures
9/30/16

Motion for Summary Judgment due
10/30/16

Opposition due
11/21/16

What we can learn from those dates is that the SEC seem pretty confident with their case. A summary judgement would see a Judge rule on the case without the need for a trial.

The initial disclosures to be filed by the 29th of this month would also provide some insight into Daniel Filho’s proposed defense.

Or at least it might have, had the DOJ not filed a Motion to Intervene on October 1st.

The DOJ appear to have been present at the September 29th scheduling hearing, with the clerk’s notes reading ‘
Motion to Stay Discovery to be filed.
‘

The DOJ are not party to the
SEC’s civil case against DFRF Enterprises
, but seek to intervene on the grounds of Filho abusing discovery in the civil case to manipulate
concurrent criminal proceedings
.

In opening their motion, the DOJ lay out the current status of Filho’s criminal proceedings.

Daniel Fernandes Rojo Filho (“Filho”) is the defendant in the related criminal action and has not yet retained counsel in either the criminal action or this action.

Defendants DFRF Enterprises LLC, DFRF Enterprises, LLC, (collectively “DFRF”)1 and Valdes have not retained counsel, have not filed responsive pleadings in the above-captioned action, and are in default.

With no lawyer and already in default, Filho’s defense is off to a great start.

Both the government and the SEC have been investigating DFRF and individuals associated with DFRF in connection with an investment-fraud scheme.

On June 30, 2015, the SEC filed this action. On August 5, 2015, a grand jury returned an indictment against Filho, charging him with three counts of wire fraud.

Due to the complaints filed being similar in nature, the DOJ are asking for ‘
a stay of discovery in the civil proceedings
‘.

Without a stay, Filho—charged in both actions—could use the civil discovery process in a manner that impairs proper administration of the criminal case.

The DOJ also argue that because the SEC and DOJ’s complaints are ‘
founded on many of the same operative facts
‘, that

a stay of discovery would create genuine efficiencies. For example, a conviction in the criminal case could have an estoppel effect as to the civil liability of Filho.

Basically if Filho loses his criminal case, then the SEC’s civil case is streamlined into a foregone conclusion.

Longtime readers of BehindMLM will recognize the DOJ’s motion as near-identical to the one filed in the TelexFree civil case.

There the DOJ were granted their requested intervention, with the TelexFree civil case currently
on hold
till the conclusion of criminal proceedings against its owners.

Not surprisingly, this decisio

🤖 Quick Answer

What is the significance of the SEC scheduling conference held on September 29th in the DFRF Enterprises case?

Why did the DOJ file a Motion to Intervene on October 1st?
The DOJ's intervention motion, filed shortly after the scheduling conference, potentially sought to stay civil case discovery proceedings, suggesting federal criminal interests may have superseded the SEC's civil Ponzi scheme investigation and required protective measures regarding evidence disclosure.

What would initial disclosures reveal about the defendant's strategy?
Initial disclosures due by October 29th would typically expose Daniel Filho's proposed defense strategies, legal theories, and documentary evidence, providing the

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