Final Judgment and Order Against K&L International Enterprises
UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF FLORIDA
ORLANDO DIVISION
UNITED STATES SECURITIES AND EXCHANGE
COMMISSION,
Plaintiff,
v.
K&L INTERNATIONAL ENTERPRISES, INC.,
SIGNATURE LEISURE, INC., SIGNATURE
WORLDWIDE ADVISORS, LLC, STEPHEN W.
CARNES, LAWRENCE A. POWALISZ, ENZYME
ENVIRONMENTAL SOLUTIONS, INC. and JARED E.
HOCHSTEDLER,
Defendants.
________________________________________/
JUDGE GREGORY A. PRESNELL
No. 6:09-cv-01638-GAP-KRS
FINAL JUDGMENT AS TO DEFENDANT
K&L INTERNATIONAL ENTERPRISES, INC.
The Securities and Exchange Commission having filed a Complaint and Defendant K&L
International Enterprises, Inc. having entered a general appearance; consented to the Court’s
jurisdiction over Defendant and the subject matter of this action; consented to entry of this Final
Judgment without admitting or denying the allegations of the Complaint (except as to
jurisdiction); waived findings of fact and conclusions of law; and waived any right to appeal
from this Final Judgment:
I.
IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that Defendant and Defendant's agents,
servants, employees, attorneys, and all persons in active concert or participation with them who
receive actual notice of this Final Judgment by personal service or otherwise are permanently
Case 6:09-cv-01638-GAP-KRS Document 60 Filed 08/18/10 Page 1 of 6
restrained and enjoined from violating Section 5 of the Securities Act of 1933 [15 U.S.C. § 77e]
by, directly or indirectly, in the absence of any applicable exemption:
(a) Unless a registration statement is in effect as to a security, making use of
any means or instruments of transportation or communication in interstate
commerce or of the mails to sell such security through the use or medium of any
prospectus or otherwise;
(b) Unless a registration statement is in effect as to a security, carrying or
causing to be carried through the mails or in interstate commerce, by any means
or instruments of transportation, any such security for the purpose of sale or for
delivery after sale; or
(c) Making use of any means or instruments of transportation or
communication in interstate commerce or of the mails to offer to sell or offer to
buy through the use or medium of any prospectus or otherwise any security,
unless a registration statement has been filed with the Commission as to such
security, or while the registration statement is the subject of a refusal order or stop
order or (prior to the effective date of the registration statement) any public
proceeding or examination under Section 8 of the Securities Act [15 U.S.C. §
77h].
II.
IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that Defendant is barred for three
years from the date of this Order from participating in an offering of penny stock, including
engaging in activities with a broker, dealer, or issuer for purposes of issuing, trading, or inducing
2
Case 6:09-cv-01638-GAP-KRS Document 60 Filed 08/18/10 Page 2 of 6
or attempting to induce the purchase or sale of any penny stock. A penny stock is any equity
security that has a price of less than five dollars, except as provided in Rule 3a51-1 under the
Exchange Act [17 C.F.R. 240.3a51-1].
III.
IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that Defendant is liable
for disgorgement of $6,242,049.00, representing profits gained as a result of the conduct alleged
in the Complaint, of which $3,748,563.00 shall be payable jointly and severally with Defendant
Lawrence A. Powalisz (“Powalisz”), together with prejudgment interest thereon in the amount of
$327,900.00, of which $196,915.00 shall be payable jointly and severally with Defendant
Powalisz, and a civil penalty in the amount of $150,000.00 pursuant to Section 20(d) of the
Securities Act [15 U.S.C. § 77t(d)]. Defendant shall satisfy this obligation by paying
$6,719,949.00 pursuant to the terms of the payment schedule set forth in paragraph IV below
after entry of this Final Judgment to the Clerk of this Court, together with a cover letter
identifying K&L International Enterprises, Inc. as a defendant in this action; setting forth the
title and civil action number of this action and the name of this Court; and specifying that
payment is made pursuant to this Final Judgment. Defendant shall simultaneously transmit
photocopies of such payment and letter to the Commission’s counsel in this action. By making
this payment, Defendant relinquishes all legal and equitable right, title, and interest in such
funds, and no part of the funds shall be returned to Defendant. Defendant shall pay postjudgment
interest on any delinquent amounts pursuant to 28 USC § 1961.
The Clerk shall deposit the funds into an interest bearing account with the Court Registry
Investment System ("CRIS") or any other type of interest bearing account that is utilized by the
3
Case 6:09-cv-01638-GAP-KRS Document 60 Filed 08/18/10 Page 3 of 6
Court. These funds, together with any interest and income earned thereon (collectively, the
“Fund”), shall be held in the interest bearing account until further order of the Court. In
accordance with 28 U.S.C. § 1914 and the guidelines set by the Director of the Administrative
Office of the United States Courts, the Clerk is directed, without further order of this Court, to
deduct from the income earned on the money in the Fund a fee equal to ten percent of the
income earned on the Fund. Such fee shall not exceed that authorized by the Judicial
Conference of the United States.
The Commission may by motion propose a plan to distribute the Fund subject to the
Court’s approval. Such a plan may provide that the Fund shall be distributed pursuant to the Fair
Fund provisions of Section 308(a) of the Sarbanes-Oxley Act of 2002. Regardless of whether
any such Fair Fund distribution is made, amounts ordered to be paid as civil penalties pursuant to
this Judgment shall be treated as penalties paid to the government for all purposes, including all
tax purposes. To preserve the deterrent effect of the civil penalty, Defendant shall not, after
offset or reduction of any award of compensatory damages in any Related Investor Action based
on Defendant’s payment of disgorgement in this action, argue that he is entitled to, nor shall he
further benefit by, offset or reduction of such compensatory damages award by the amount of
any part of Defendant’s payment of a civil penalty in this action ("Penalty Offset"). If the court
in any Related Investor Action grants such a Penalty Offset, Defendant shall, within 30 days
after entry of a final order granting the Penalty Offset, notify the Commission's counsel in this
action and pay the amount of the Penalty Offset to the United States Treasury or to a Fair Fund,
as the Commission directs. Such a payment shall not be deemed an additional civil penalty and
shall not be deemed to change the amount of the civil penalty imposed in this Judgment. For
4
Case 6:09-cv-01638-GAP-KRS Document 60 Filed 08/18/10 Page 4 of 6
purposes of this paragraph, a "Related Investor Action" means a private damages action brought
against Defendant by or on behalf of one or more investors based on substantially the same facts
as alleged in the Complaint in this action.
IV.
IT IS FURTHER ORDERED that Defendant K&L International Enterprises, Inc. shall
pay $6,719,949.00 in three installments according to the following schedule: (1) $300,000.00,
within 14 days of entry of this Final Judgment; (2) $500,000.00 within 180 days of entry of this
Final Judgment, plus post-judgment interest pursuant to 28 U.S.C. § 1961; and (3) $5,919,949.00
within 360 days of entry of this Final Judgment, plus post-judgment interest pursuant to 28
U.S.C. § 1961. If Defendant fails to make any payment by the date agreed and/or in the amount
agreed according to the schedule set forth above, all outstanding payments under this Final
Judgment, including post-judgment interest, minus any payments made, shall become due and
payable immediately without further application to the Court. When calculating the installment
payments, the parties shall deduct any payments made by Defendant Powalisz, up to
$3,945,478.00, plus applicable post-judgment interest, from the amounts that Defendant K&L
International Enterprises, Inc. has been ordered to pay.
V.
IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that the Consent is incorporated herein with
the same force and effect as if fully set forth herein, and that Defendant shall comply with all of
the undertakings and agreements set forth therein.
5
Case 6:09-cv-01638-GAP-KRS Document 60 Filed 08/18/10 Page 5 of 6
VI.
IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that this Court shall retain jurisdiction of
this matter for the purposes of enforcing the terms of this Final Judgment.
VII.
There being no just reason for delay, pursuant to Rule 54(b) of the Federal Rules of Civil
Procedure, the Clerk is ordered to enter this Final Judgment forthwith and without further notice.
DONE and ORDERED in Chambers, in Orlando, Florida this 18th day of August, 2010.
Copies to:
Counsel of Record
6
Case 6:09-cv-01638-GAP-KRS Document 60 Filed 08/18/10 Page 6 of 6
AI
