Receiver
Scott M. Dimond, Esq.,
Receiver of the Estate
of Frederick J. Kunen and for DT Capital LLC

Counsel for Receiver
Damian & Valori, LLP
Attorneys at Law

SEC
U.S. Securities &
 Exchange Commission

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA
MIAMI DIVISION
 

On August 23, 2007, the Securities and Exchange Commission (the "Commission") filed a Complaint in the United States District Court for the Southern District of Florida (the "District Court"), commencing the above (left) captioned civil injunctive and enforcement action against Charles O. Morgan, Jr., as the Personal Representative of the Probate Estate of Frederick J. Kunen, who passed away on July 11, 2007, in St. Maarten, Netherlands Antilles (the "Kunen Action").   The Commission sought, among other things, an asset freeze over Mr. Kunen's Estate to prevent dissipation of any assets derived from Mr. Kunen's fraudulent options trading scheme.  The Complaint alleged that from approximately December 2006 until Mr. Kunen died on July 11, 2007, Mr. Kunen lured primarily inexperienced investors into a risky options trading program by falsely representing the program had a successful ten-year track record, and baselessly promising 10 to 20 percent monthly returns.  In reality, Mr. Kunen spent investor funds on a variety of personal expenses, and lost a significant amount of the remainder of their money in his risky options trading.

The District Court granted the Commission's request for an asset freeze over the Estate after finding the Commission had made a prima facie showing that Kunen had violated the securities laws, and that property of the Estate may have been the proceeds of the fraudulent scheme.   The Court also granted the Commission's motion to appoint a receiver over the Estate, appointing Scott M. Dimond, Esq. (the "Receiver").

On December 6, 2007, the Commission filed another Complaint in the District Court commencing the above (right) captioned civil injunctive and enforcement action against Terry E. Provence and DT Capital LLC (the "Provence Action").  As in the Kunen Action, the Commission sought an asset freeze over the assets of Mr. Provence and DT Capital LLC to prevent dissipation of any assets derived from the fraudulent options trading fraud that Mr. Provence, through DT Capital LLC and other entities, had conducted simultaneously and parallel with the fraud perpetrated by Mr. Kunen, and that Mr. Provence continued after Mr. Kunen's death.  Mr. Provence's fraud was nearly identical to Mr. Kunen's fraud in form, the misrepresentations made, the type of investors targeted, and the misappropriation, conversion or loss of investor funds.  Indeed, like Mr. Kunen, Mr. Provence misappropriated or converted the funds that he received from investors to his own use, or lost the funds in risky index options trades.

The District Court granted the Commission's request for an asset freeze over the assets of Mr. Provence and DT Capital.  Subsequently, in light of the similarity and interconnectedness of the Kunen fraud and the Provence fraud, the Commission requested that the Court consolidate the two actions into one action.  After the Court consolidated the two actions, the Commission sought to have the Receivership over the assets of Mr. Kunen's estate expanded to include the assets of DT Capital LLC.

Since the commencement of the Kunen Action and the Provence Action, the Receiver, the Commission, and the Personal Representative of Mr. Kunen's Estate have worked cooperatively to discover, marshal and preserve funds and assets derived from investors whom Mr. Kunen and/or Mr. Provence deceived into providing money by means of their misrepresentations and baseless, misleading projections.  The Receiver, the Commission, and the Personal Representative also have either contacted or received contact from numerous investors in Mr. Kunen's and Mr. Provence's fraudulent options trading programs.  As a result of those discovery efforts, it now appears more than 100 investors of Mr. Kunen and nearly 60 investors of Mr. Provence may have a claim on the funds and assets that the Receiver has marshaled in connection with Mr. Kunen's and Mr. Provence's fraudulent schemes.  To preserve these funds and assets for the benefit of the investors who were defrauded by Mr. Kunen or Mr. Provence, the Receiver and the Commissions sought to have the Court impose a constructive trust over the assets and funds that were derived from investors and marshaled by the Receiver.  The District Court granted this relief and imposed a constructive trust over those assets and funds.

This website was created to provide information to all investors defrauded by Mr. Kunen or Mr. Provence regarding the efforts of the Receiver, the Commission and the Personal Representative of Mr. Kunen's Estate to discover, marshal and preserve for the benefit of all investors the funds and assets of the Receivership Estates of Mr. Kunen and DT Capital LLC.  As this website will be updated frequently with Court filings, status reports and other materials, we encourage all investors to visit frequently.  In the event any investor concern is unclear or not addressed in this website, please contact the Receiver or his counsel using the contact information provided herein.