United States District Court, M.D. Georgia, Columbus Division
ORDER AND PRELIMINARY INJUNCTION
D. LAND, CHIEF U.S. DISTRICT COURT JUDGE
seek a preliminary injunction pursuant to Rule 65 of the
Federal Rules of Civil Procedure to freeze the assets
deposited in any account held by Defendant Allied Energy
Services, LLC (“Allied”) with Bank of America
and/or any other financial institution (ECF No.
For the reasons explained in the remainder of this order,
Plaintiffs' motion for a preliminary injunction is
fourteen count complaint includes claims for violations of
federal and state securities laws, civil RICO, common law
fraud and deceit, deceptive trade practices, breach of
contract, unjust enrichment, money had and received,
promissory estoppel, and piercing of the corporate veil.
These claims arise from Defendants' alleged maintenance
of a Ponzi scheme and related conduct designed to lure
Plaintiffs to invest money with Defendants and to conceal the
true fraudulent nature of the scheme. Plaintiffs seek
monetary damages and permanent equitable relief.
Plaintiffs' equitable remedies include imposition of an
equitable lien and constructive trust, restitution, and
interim, Plaintiffs seek preliminary injunctive relief to
protect their ability to enforce their equitable remedies.
Plaintiffs maintain that without an injunction preventing
Allied from disposing of its monetary assets, no such assets
will be available if permanent injunctive relief is
ultimately granted in the form of an equitable lien,
constructive trust, restitution, and/or disgorgement. The
Court held a hearing on Plaintiffs' motion on November 6,
2019. Although no Defendant has yet answered the
Plaintiffs' complaint, the record reveals that Defendant
Allied has been served with the complaint and notice of the
hearing. Defendant Clarence Dean Alford's counsel, who
has entered a special entry of appearance on behalf of Mr.
Alford, participated in the hearing, and it was confirmed at
the hearing that Mr. Alford is one of the members of Allied.
Therefore, the Court concludes that Allied had adequate
notice such that today's order shall be considered a
preliminary injunction issued pursuant to Rule 65(a) and not
a temporary restraining order under Rule 65(b).
axiomatic that for a party to obtain preliminary injunctive
relief he must establish (1) a substantial likelihood of
success on the merits; (2) a substantial threat of
irreparable injury if the relief is not granted; (3) that the
threatened injury to plaintiff outweighs the harm the relief
may cause the defendant; and (4) that the relief is not
contrary to the public interest. Levi Strauss & Co.
v. Sunrise Int'l Trading, Inc., 51 F.3d 982, 985
(11th Cir. 1995). Preliminarily, the Court must also assure
itself that no jurisdictional impediment exists restricting
its authority to grant the relief requested.
the Court's authority to grant the equitable relief under
the circumstances presented here, the Court is guided by
Rosen v. Cascade Int'l, Inc., 21 F.3d 1520 (11th
Cir. 1994). Under the principles enunciated in
Rosen, the district courts are not authorized to
grant preliminary injunctive relief pursuant to Rule 65 in
the form of an asset freeze if the purpose of the injunctive
relief is solely to preserve those assets for the
satisfaction of a future money damages judgment. Id.
at 1527-30. Rosen, however, makes clear that the
court does have authority to freeze a defendant's assets
if that is necessary to protect the court's future
ability to provide appropriate permanent equitable relief.
Id. Before exercising such authority, the court
should assure itself that the preliminary injunctive
relief sought is of the same kind and character as the
permanent injunctive relief that is claimed and is
necessary to protect the court's authority to grant that
permanent relief should it eventually determine it is
Plaintiffs in their complaint seek to have the Court
establish an equitable lien and constructive trust over the
funds that Allied unlawfully obtained from them; they also
seek a return of their investment funds through restitution
and disgorgement. If Allied is not prevented from
transferring these assets, it is likely that the Court will
not be able to provide the meaningful permanent equitable
relief that Plaintiffs would be entitled to if they
ultimately prevail on their claims. Accordingly, the Court
finds that it does have the jurisdiction and authority to
grant the preliminary injunctive relief Plaintiffs seek if
Plaintiffs can establish the traditional elements for a
upon the present record, the Court finds a substantial
likelihood that Plaintiffs will succeed on the merits.
Although the record is admittedly one-sided at this stage of
the proceedings, the Court finds it adequate to sustain this
element for a preliminary injunction. The Court further finds
that if the preliminary injunctive relief is not granted, the
assets needed to grant the permanent injunctive relief will
likely be dissipated and unavailable to provide that relief.
Accordingly, Plaintiffs will suffer irreparable injury and
that injury outweighs any harm that may be suffered by Allied
in having its assets frozen, particularly given the
opportunity that the Court is providing Allied to seek relief
from the preliminary injunction upon the proper showing of
the need to maintain its operations. The Court further finds
that the present record demonstrates that this asset freeze
is not against the public interest, which interest favors the
protection of the Court's ability to award necessary
equitable relief to remedy violations of federal and state
law as alleged in the complaint.
the Court has the jurisdiction and authority to issue the
preliminary injunctive relief sought here pursuant to Rule 65
and because Plaintiffs have carried their burden of
establishing the essential elements for a claim for
preliminary injunctive relief, the Court grants
Plaintiffs' motion (ECF No. 25) and issues the following
Defendant Allied is enjoined and prohibited from withdrawing,
transferring, deducting or otherwise taking action to
interfere with its financial accounts in a manner that would
reduce the balances in those accounts.
Defendants may file a motion seeking a modification of this
preliminary injunction based upon a showing of the necessity
to make regular recurring payments to maintain the status quo
of Allied's legitimate business ...