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Eta Compute, Inc. v. Semones

United States District Court, D. Idaho

December 21, 2018

Eta Compute, Inc., Plaintiff,
v.
Timothy D. Semones; Susan Desko; Inphi Partners, LLC; Susan Desko, P.C., and DOES 1 through 50, Defendant.

          MEMORANDUM DECISION AND ORDER

          B. Lynn Winmill Chief Judge United States District Court.

         INTRODUCTION

         Before the Court is Plaintiff Eta Computer, Inc.'s Ex Parte Application for Writ of Attachment (Dkt. 7). For the reasons explained below, the Court will issue an Order to Show Cause, requiring Defendants to appear before this Court on January 2, 2019, at 1:30 p.m. to show cause why a prejudgment writ of attachment should not issue. The Court will also grant plaintiff's request to issue a writ of attachment immediately, before the show-cause hearing.

         DISCUSSION

         Plaintiff Eta Compute, Inc. alleges that its former Chief Financial Officer, Defendant Timothy D. Semones, in concert with his spouse, Defendant Susan Desko, stole $3 million from Eta to fund their lifestyle, including the ongoing construction of a multi-million home for themselves in Idaho. Compl., Dkt. 1, ¶ 1.

         Eta discovered the theft in late November 2018, when its CEO “noticed a discrepancy in Eta's Wells Fargo bank account reflecting a balance of approximately $1, 800, 000 less than he expected.” Id. ¶ 27. When Mr. Semones was asked about the discrepancy, he initially attempted to cover up the theft by altering an Eta bank statement.

         The CEO quickly ascertained that the bank statement was altered, and a few days later, on December 6, 2018, Mr. Semones admitted that during the past year or so, he had transferred a total of $3 million from Eta's account to defendants' bank accounts “without the knowledge or permission of anyone at Eta.” Id. ¶ 22; see also Id. ¶¶ 13-21 (detailing the separate transfers). Mr. Semones further explained that he had attempted to repay some of the stolen money in May 2018, by transferring $1.5 million from Defendant Inphi Partners, LLC's checking account to Eta's account. The net result, according to plaintiff, is that defendants continue to wrongly hold $1.5 million that rightfully belongs to Eta.

         The parties initially attempted to resolve this matter privately. During the December 6, 2018 interview, Mr. Semones allegedly said he would gather all Defendants' bank statements and provide them to Eta's attorneys. The next day, Mr. Semones reported he was “in the process of gathering up statements.” Magarian Aff. ¶ 3, Ex. A. But those statements still have not been provided to Eta, and, further, Eta reports that when Mr. Semones listed assets he would have available to repay Eta, he mentioned $450, 000 in a Wells Fargo brokerage account, but, at the same, time, said he intended to spend that money - including for his child to attend college overseas and to provide for “other needs.” See App., Dkt. 8, at 13-14.

         Plaintiff alleges that, given Mr. Semones' past admitted theft, his current refusal to cooperate with plaintiff, and his stated intent to spend monies in the Well Faro brokerage account, plaintiffs have demonstrated that defendants' bank accounts “are subject to imminent transfer or concealment.” App., Dkt. 8, at 17. Additionally, plaintiff has identified seven vehicles owned by defendants and argues that these vehicles are likewise in danger of imminent transfer or concealment.

         THE GOVERNING LEGAL STANDARD

         Plaintiffs request a writ of attachment, as authorized by the Idaho statutory law, pursuant to Federal Rule of Civil Procedure 64. Rule 64 which authorizes district courts to employ state law remedies for attachment. See Fed. R. Civ. P. 64(a), (b).

         Under Idaho statutory law, before a writ of attachment may issue, plaintiffs must demonstrate: (1) that the defendant is indebted to the plaintiff; (2) that the debt is upon a contract, express or implied, for the direct payment of money; and (3) that the payment of the same has not been secured by any mortgage, deed of trust, security interest or lien upon real or personal property; and (4) the attachment is not sought and the action is not prosecuted to hinder, delay, or defraud any creditor of the defendant. See Idaho Code 8-502(a).

         After a plaintiff files an application of a writ of attachment, the court “shall, without delay, examine the complaint and affidavit, and if satisfied that they meet the requirements of subdivision (a), it shall issue an order directed to the defendant to show cause why a writ of attachment should not issue.” Idaho Code § 8-502(b).

         In addition, the Court may “prior to a hearing” issue a writ of attachment “if probable cause appears…[b]y reason of specific facts shown, the property specifically sought to be attached is a bank account subject to the threat of imminent withdrawal…or [the property] is in immediate danger of concealment[] or removal from this state, or of sale to an innocent purchaser, and the holder of such property threatens ...


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