MedLink International (MLKNA)

[scion]

PRELIMINARY STATEMENT

The Court entered a default judgment against Vuono and his co-defendants on May 21, 2013. Despite full knowledge of the existence of this action, and after authorizing his attorney to accept service of process on his behalf, Vuono has moved to vacate the default judgment against him, claiming that he “was not served with a summons for this action.” Vuono falsely states that he “had not retained an attorney for this action,” and denies that he has been “personally served with the complaint so that [he] could enter a defense to this action.” His motion should be denied.

Vuono’s motion is based on a multitude of misrepresentations and material omissions. Despite his current claim to the contrary, Vuono was in fact represented by an attorney in this action, and Vuono himself told Commission counsel in three email exchanges that he was represented. Moreover, Vuono was properly served with the Summons and Complaint because he authorized his attorney to accept service on his behalf. Vuono knew quite well that this action had been filed, but he deliberately chose not to appear. The Commission gave Vuono ample notice that it intended to seek a default judgment, sent him copies of the Commission’s motion and the proposed final judgment, and served him with the judgment when it was entered.

As a result, Vuono’s statement to the Court in his motion that he only recently learned of the entry of the default judgment is false. Vuono had actual knowledge of the Commission’s default motion and of the entry of the judgment.

Motions to vacate a default judgment pursuant to Rule 55(c) and Rule 60(b) are decided based on the consideration of three criteria: (1) whether the default was willful; (2) whether setting aside the default would prejudice the adversary; and (3) whether a meritorious defense is presented. Vuono’s motion fails to meet this test.

First, Vuono’s default was willful: Vuono was aware of the Commission’s investigation and appeared twice for investigative testimony. On June 5, 2012, the Commission provided Vuono with a “Wells Letter” notifying him that the Commission’s staff intended to recommend an enforcement action against him. Vuono’s attorney responded with a letter on June 21, 2012. The Commission notified Vuono’s attorney prior to filing the Complaint. Vuono evaded personal service of process for more than three months, and failed to execute a waiver of service that had been sent to him and his attorney. Vuono eventually authorized his attorney to accept service of process, but then failed to respond to the Complaint, and failed to seek an extension of time to do so. Although Vuono knew the Commission was seeking a default, because SEC counsel mailed and emailed him all filings connected with the motion, he failed to appear and oppose the Commission’s motion. Vuono has not shown good cause for his failure to answer.

Second, the Commission would be prejudiced if Vuono’s motion were to be granted. Vuono has abused the process and continues to do so in his motion to vacate. Vuono’s four sentence motion to vacate contains numerous falsehoods and offers no valid excuse for the default.

Third, Vuono has failed to show that he has any basis upon which to mount a meritorious defense. Indeed, Vuono provides no indication of any defense to the charges against him, which involve filing a materially false and misleading Form 10-K with the Commission, and deliberately taking money from a MedLink investor by cashing the investor’s check when the investor had explicitly told him not to do so and Vuono had promised he would not.

Accordingly, the Court should deny Vuono’s motion to vacate the default judgment against him.


Extract -
Doc 28 PDF file
http://www.scribd.com/doc/157479523/SEC-v-Medlink-International-Inc-Et-Al-Doc-28-Filed-26-Jul-13