United States District Court, S.D. Texas, Houston Division
WILLIAM O'KANE, SYNERGY SOURCE, LLC, and AZKARTA CREST CORP., Plaintiffs,
VERLEY SEMBRITZKY, JR., a/k/a ROCKY SEMBRITZKY, et al., Defendants.
MEMORANDUM AND ORDER
Rosenthal, Chief United States District Judge.
O'Kane, Synergy Source, LLC, and Azkarta Crest
Corporation sued individual and corporate defendants over an
allegedly fraudulent investment scheme, the proceeds of which
are alleged to have paid for a luxury condominium property.
(Docket Entry No. 38). The plaintiffs moved for a preliminary
injunction to compel two of the defendants, Verley Sembritzky
and his ex-wife, Goldie Rose, to pay the property taxes
assessed against that condominium, which is titled to Rose.
(Docket Entry No. 105). Rose responded, Sembritzky did not,
and the plaintiffs replied. (Docket Entry Nos. 107, 110).
on the motion, response, and reply; the record; and the
applicable law, the court grants the motion to compel Rose to
pay the property taxes assessed against the condominium but
denies the motion as to Sembritzky. (Docket Entry No. 105).
The reasons for this ruling are detailed below.
case presents a colorful cast of characters. In late 2015,
Verley Sembritzky, also known as “Rocky, ” gave
O'Kane, Synergy, and Azkarta Regulation D, Rule 506
Private Placement Letters stating that he was authorized to
sell 1, 000 shares of Rasli Bahari Kenya Limited stock for
$175.5 million. (Docket Entry No. 38 at ¶¶ 20-22).
This common stock was to be sold to accredited investors for
$175, 500 per share. (Id. at ¶ 22). The letter
represented Sembritzky as Rasli Bahari's founder and
managing director. (Id.). Sembritzky told the
plaintiffs that the money would be used to design, build, and
operate the first of several Kenyan desalination plants,
which the letter predicted would earn hundreds of millions of
dollars starting in 2019. (Id. at ¶¶
completed and signed the Stock Subscription Agreement,
offering to purchase five shares for $875, 000. (Id.
at ¶¶ 29, 30). Sembritzky countersigned and
responded that the offer was “Accepted By Rocky
Sembritzky, Executive Chairman & Founder.”
(Id. at ¶ 30). The Agreement instructed
O'Kane to send a check to Ocean Harvest, which supposedly
maintained an operating account for Rasli Bahari in the
United States. (Id. at ¶ 32). A few days later,
O'Kane was told to wire his payment to a bank account at
BBVA Compass Bank in Houston under the name “Bounty of
the Ocean, ” purportedly Rasli Bahari's American
agent. (Id. at ¶ 33; see Id. at ¶
12). Sembritzky emailed O'Kane these revised payment
instructions, stating that O'Kane's investment would
be used for Rasli Bahari's business expenses and that the
total investment was $877, 500. (Id. at ¶ 34).
O'Kane followed the instructions and wired his payment to
the Bounty of the Ocean account at Compass Bank.
(Id. at ¶ 35). Synergy and Azkarta followed
similar instructions, investing $351, 000 and $175, 000
through transfers to the Bounty of the Ocean account.
(Id. at ¶¶ 43, 51).
days after receiving the money, Sembritzky transferred it to
other Compass accounts Sembritzky or his then-wife, Rose,
owned. (Docket Entry No. 102-1 at ¶¶ 10-12; 102-2
at ¶¶ 10-12; see Docket Entry No. 110-2 at
11). Before November 23, 2015, the Bounty of the Ocean bank
account had a $0 balance. (Docket Entry No. 110-2 at 297).
From November 23 to November 25, the account received
deposits totaling $2, 106, 000, most from the plaintiffs.
(Id.). On November 30, 2015, Sembritzky transferred
$2 million to his personal account, and then transferred the
same $2 million to Rose's personal account. (Id.
at 11-12, 109). After Rose transferred $1.76 million back to
Sembritzky and Sembritzky received a $580, 000 transfer from
the Bounty of the Ocean account, Sembritzky transferred $2.3
million to a title company. (Id. at 111). The
plaintiffs allege that none of the money was invested in
Rasli Bahari. (Docket Entry No. 105-1 at 2). The plaintiffs
also allege that Rasli Bahari has never attempted to build or
operate any desalination plant, harvested any minerals,
produced any fresh water, or engaged in operations or
charitable donations. (Id.). The plaintiffs never
received any financial statements or proof of stock purchase.
(See Docket Entry No. 38 at ¶ 61; Docket Entry
No. 5-1 at ¶ 9).
plaintiffs allege that Sembritzky and Rose used the money to
buy a luxury condominium located at 2727 Kirby Drive, Unit
26L in Houston (the “Kirby Condominium”). (Docket
Entry No. 102-1 at ¶ 12; Docket Entry No. 102-2 at
¶ 12; Docket Entry No. 5-1 at ¶¶ 12-16; Docket
Entry No. 110-2 at 111). The building was deeded to Rose on
December 14, 2015. (Docket Entry No. 5-1 at ¶ 14). Rose
executed a Statutory Durable Power of Attorney appointing
Sembritzky as her attorney-in-fact, with the power to act for
her in real-estate transactions relating to the Kirby
Condominium. (Docket Entry No. 5-1 at ¶ 16). In October
2016, Sembritzky and Rose began divorce proceedings in Harris
County. (Docket Entry No. 38 at ¶ 66; Docket Entry No.
107-1). The plaintiffs allege that on March 1, 2018,
Sembritzky executed a mortgage on the Kirby Condominium and
delivered it to Rosemarie Johnson, with whom Sembritzky was
romantically involved. (Docket Entry No. 38 at ¶ 68).
The mortgage used the Kirby Condominium as collateral to
secure a $1, 300, 000 loan. (Docket Entry No. 5-1 at ¶
17; Docket Entry No. 38 at ¶¶ 67-68). Rose and
Sembritzky were divorced on March 6, 2019, and the family
court concluded that Sembritzky has no rights, title, or
interest in the Kirby Condominium. (Docket Entry No. 107 at
1, 9-10; Docket Entry No. 107-4 at 4).
plaintiffs assert 20 counts against Sembritzky and Rose,
including conversion; breach of fiduciary duty; aiding and
abetting breach of fiduciary duty; defalcation; embezzlement;
constructive trust; accounting; fraudulent conveyance and
transfer, in violation of the Texas Uniform Fraudulent
Transfer Act §§ 24.005(A)(1), (A)(2), 240.006(A),
24.006(B); unjust enrichment; and conspiracy. (Docket Entry
No. 38 at ¶¶ 72-76, 85-102, 108-173, 178-85). They
also seek a declaratory judgment against Sembritzky and Rose
and assert additional fraud claims and federal securities
violations against Sembritzky. (Id. at ¶¶
September 2018, the court issued a preliminary injunction
prohibiting Sembritzky and Rose “from selling,
assigning, transferring, encumbering, or otherwise disposing
of any interest in the Kirby Condominium and from receiving
or acquiring any interest in the Kirby Condominium, without
order from a court of competent jurisdiction.” (Docket
Entry No. 11 at 3). The plaintiffs now argue that Sembritzky
and Rose have not paid $132, 462.57 in property taxes
assessed against the Kirby Condominium. (Docket Entry No.
105; Docket Entry No. 105-1 at 7). They move for a
preliminary injunction to compel payment of those taxes and
future taxes assessed against the property during this
litigation. (Docket Entry No. 105).
The Legal Standard
preliminary injunction is an “extraordinary
remedy.” Texans for Free Enter. v. Tex. Ethics
Comm'n, 732 F.3d 535, 536 (5th Cir. 2013). A court
may grant a preliminary injunction only if the movant shows:
“(1) a substantial likelihood of success on the merits,
(2) a substantial threat of irreparable injury if the
injunction is not issued, (3) that the threatened injury if
the injunction is denied outweighs any harm that will result
if the injunction is granted, and (4) that the grant of an
injunction will not disserve the public interest.”
Jones v. Tex. Dep't of Criminal Justice, 880
F.3d 756, 759 (5th Cir. 2018) (quoting Byrum v.
Landreth, 566 F.3d 442, 445 (5th Cir. 2009)).
plaintiffs argue that they seek a preliminary injunction
“to preserve the status quo and prevent the loss of the
luxury condominium that is the subject matter of this
case.” (Docket Entry No. 105-1 at 1). Without payment
of the approximately $130, 000 in assessed taxes, they argue,
the “condominium ...