
SEC v. Pacific West Capital Group, Inc., et al
Case Summary
On February 16, 2018, Thomas C. Hebrank of E3 Advisors was appointed permanent receiver for PWCG Trust (“Defendant”), pursuant to an Order entered by the United States District Court for the Central District of California in an action against Defendant filed by the Securities and Exchange Commission.
Case Updates: April 2023
Summary
No significant matters have occurred since the last report. A $251K death benefit from a matured policy was received in February, and a $2.5 million policy maturity occurred in March, with proceeds not yet received.
Class Action Settlement
The Receiver signed a Settlement Agreement with Mills Potoczak & Company (“MPC”), pursuant to which MPC will pay $9.75 million to the receivership. The settlement resolves both the receivership estate’s claims against MPC and the investor class actions against MPC, and therefore requires approval from the Federal District Court overseeing the receivership and the Los Angeles Superior Court (“LASC”) presiding over the class action cases. A motion for preliminary approval of the class settlement has been filed in the LASC. After approval has been obtained from the LASC, the Receiver plans to file his motion for approval of the settlement in the Federal District Court.
Investors were sent notices on April 17th notifying them of the terms of the Class Action Settlement, as well as the estimated amount they would be receiving.
Some investors have asked about the recent Notice of Class Action Settlement they received and whether they will receive future distributions from the receivership if they participate in the class settlement. The Class Action Settlement with MPC is in addition to what investors will get from the receivership. The Gross Settlement Amount is $9,750,000. The Distribution Amount is $8,257,500 (gross settlement amount less class counsel legal fees and class representative payments), which comes to 7.679% of each investor’s approved claim amount in the receivership. Please refer to pages 4-5 of the Notice of Class Action Settlement.
Whether you decide to participate in the Class Action Settlement or not, if you have an allowed claim in the receivership, you will be eligible to participate in future distributions from the Receiver in the District Court case. In other words, your decision whether to participate in the class settlement does not affect your eligibility for future receivership distributions.
The timing and amount of future receivership distributions is dependent on the maturing of the remaining active policies. There have not been enough matured policies to make a distribution from general receivership funds at this time. Please note, based upon the Receiver’s current analysis and as reported to the Court, the remaining policies will not generate enough money (even under the most optimistic scenarios) to repay 100% of allowed claim amounts of investors in this scheme. The Receiver does not have an estimate of the amount to be returned to investors at this time.
Additional information about the class settlement is posted on our website Shecter, et al. v. Mills Potoczak & Company PC, et al. | E3 Advisors (ethreeadvisors.com). Additional information about the receivership is available at the general receivership webpage https://ethreeadvisors.com/project/sec-v-pacific-west-capital-group-inc-et-al/. You can also call 619-567-7478 if you have any questions.
Policy Status Report
The link below provides the status of each of the policies in the PWCG Trust portfolio. Policies are listed as 1) Active Policies, 2) Maturities, or 3) Negative Value Policies.
Frequently Asked Questions
Who is the Receiver? Why was there a Receiver appointed?
Thomas C. Hebrank was appointed by the Federal District Court on February 16, 2018. The Receiver was appointed after a complaint was filed by the Securities and Exchange Commission against Pacific West Capital Group, Inc. (“Pacific West”); Andrew B. Calhoun IV; PWCG Trust, et al. Your life insurance investment interest was created by PWCG, and is one of the subjects of the litigation between the SEC and PWCG.
Who can I talk to about my investment?
You can periodically visit the Receiver’s website for additional updates as far as the case, Receiver’s Reports and other legal filings (ethreeadvisors.com/project/sec-v-pacific-west-capital-group-inc-et-al/). The Receiver and his staff are happy to take your questions, however to keep expenses low we ask that you check the FAQ or website first. Please direct inquiries to the Receiver to pwcg@ethreeadvisors.com.
Do I still need to make premium call, administrative fee or other payments?
The Receiver has suspended the collection of both investor premium calls and shortfall payments, as well as the $200 or other administrative fees.
Do I still own interests in specific policies?
The Court has approved the “pooling” of all investor policy interests meaning that all premium payments and all policy maturities are pooled together for the benefit of all of the investors. Once sufficient surplus funds become available, which is expected to occur in approximately five to seven years (based on current projections), the Receiver will propose that distributions be made to investors based on total amounts contributed by investors (including cash calls). It is important to understand that, due to the insufficiency of cash reserves set up by PWCG, if the reserves and death benefits for the policies were not pooled, and the Receiver was unable to borrow funds to meet anticipated cash needs over the next few years, the vast majority of the policies would lapse, meaning investors would recover little or nothing. Therefore, the pooling and anticipated borrowing is critical to maximizing the recovery from the policies for investors.
Will the Receiver be collecting the Final Judgments against defendants Pacific West Capital Group, Inc.; Andrew B. Calhoun IV; and Andrew Calhoun Jr.?
Copies of the Final Judgments against Andrew B. Calhoun IV, Andrew Calhoun, Jr. and Pacific West Capital Group, Inc. can be found at the below links under Court Filings. These Final Judgments were entered in favor of the Securities and Exchange Commission on June 15, 2018 and June 26, 2018.
The SEC is responsible for collecting each of these Judgments. The Receiver will not engage in direct collection activities with regard to these Judgments. It should be noted that if the SEC is successful in recovering money from these Defendants, it is possible that the recovered funds will be turned over to the Receiver. In other words, in the normal course of a federal equity receivership, the SEC will turn over funds that are collected on judgments to the Receiver for distribution to the investors who were victims of the underlying wrongdoing. In the meantime, the Receiver will continue his work pursuant to the Court’s orders to maximize the recovery and distribution to investors in connection with the PWCG Trust.
Recent Court Filings
- 09/06/2022 – Receiver’s 18th Interim Report
- Fee Applications #18
- 11/10/2022 – Receiver’s 19th Interim Report
- Fee Applications #19
- 02/21/2022 – Receiver’s 20th Interim Report
- Fee Applications #20
- 05/18/2023 – Receiver’s 21st Interim Report and Response to Minute Order
Court Filings
Filings listed in the sections below link to PDF documents.
2018 Court Filings
- 02/16/2018 – Judgment as to Defendant PWCG Trust/Appointment of Receiver
- Receiver’s Ex Parte Motion re: Unfunded Insurance Premiums
- 03/13/2018 – Receiver’s Motion for Order in Aid of Receivership
- 05/02/2018 – Receiver’s Motion to Engage Portfolio Mgmt and Valuation Consultant; and Use PWCG Trust Reserves to Cover Premium Payments
- 05/10/2018 – BroadRiver’s Response to Motion
- 05/14/2018 – SEC’s Response to Motion
- 05/10/2018 – Mills Potoczak Response to Motion
- 05/17/2018 – Receiver’s Response to Replies on Motion
- 05/29/2018 – Order Approving Receiver’s Motion
- 10/04/2018 – Motion to Extend Receiver’s Authority to Use Existing Reserves for Premium Payments for 30 Days
- 10/11/2018 – SEC’s Response to Receiver’s Motion
- 10/29/2018 – Order Granting Motion to Extend Deadline
- 05/21/2018 – Receiver’s 1st Interim Report
- 06/15/2018 – Final Judgments Against Defendants
- Fee Applications #1
- 08/14/2018 – Receiver’s 1st Fee Application
- 08/14/2018 – Allen Matkin’s 1st Fee Application
- 08/15/2018 – Mills Potoczak’s 1st Fee Application
- 09/14/2018 – Order Granting Receiver’s 1st Fee Application for Fee Payment
- 09/14/2018 – Order Granting 1st Interim Application to Allen Matkin for Fee Payment
- 09/14/2018 – Order Granting 1st Interim Application to Mills Potoczak for Fee Payment
- 09/13/2018 – Receiver’s 2nd Interim Report
- Fee Applications #2
- 10/19/2018 – Receiver’s 2nd Fee Application
- 10/19/2018 – Allen Matkin’s 2nd Fee Application
- 10/19/2018 – Mills Potoczak’s 2nd Fee Application
- 10/25/2018 – SEC’s Non-Opposition to Fee Apps
- 11/06/2018 – Order Granting Receiver’s 2nd Fee Application for Fee Payment
- 11/06/2018 – Order Granting 2nd Interim Application to Allen Matkin for Fee Payment
- 11/06/2018 – Order Granting 2nd Interim Application to Mills Potoczak for Fee Payment
- 11/15/2018 – Receiver’s Motion re: PWCG Portfolio Mgmt Going Forward
- 12/11/2018 – Receiver’s Third Interim Report
2019 Court Filings
- Fee Applications #3
- 02/04/2019 – Receiver’s 3rd Fee Application
- 02/04/2019 – Allen Matkin’s 3rd Fee Application
- 02/05/2019 – Mills Potoczak’s 3rd Fee Application
- 02/19/2019 – Order Granting Receiver’s 3rd Fee Application for Fee Payment
- 02/19/2019 – Order Granting 3rd Interim Application to Allen Matkin for Fee Payment
- 02/19/2019 – Order Granting 3rd Interim Application to Mills Potoczak for Fee Payment
- 02/28/2019 – Receiver’s Fourth Interim Report
- Fee Applications #4
- 03/25/2019 – Receiver’s 4th Fee Application
- 03/25/2019 – Allen Matkin’s 4th Fee Application
- 03/25/2019 – Mills Potoczak’s 4th Fee Application
- 04/4/2019 – SEC’s Non-Opposition to Fee Applications
- 04/11/2019 – Order Granting Receiver’s 4th Fee Application for Fee Payment
- 04/11/2019 – Order Granting 4th Interim Application to Allen Matkin for Fee Payment
- 04/11/2019 – Order Granting 4th Interim Application to Mills Potoczak for Fee Payment
- 05/22/2019 – Receiver’s Fifth Interim Report
- Fee Applications #5
- 07/18/2019 – Receiver’s 5th Fee Application
- 07/18/2019 – Allen Matkin’s 5th Fee Application
- 07/19/2019 – Mills Potoczak’s 5th Fee Application
- 08/09/2019 – Order Granting Receiver’s 5th Fee Application for Fee Payment
- 08/09/2019 – Order Granting 5th Interim Application to Allen Matkin for Fee Payment
- 08/09/2019 – Order Granting 5th Interim Application to Mills Potoczak for Fee Payment
- 08/28/2019 – Receiver’s Sixth Interim Report
- Fee Applications #6
- 11/22/2019 – Receiver’s 6th Fee Application
- 11/22/2019 – Allen Matkin’s 6th Fee Application
- 11/22/2019 – Mills Potoczak’s 6th Fee Application
- 01/15/2020 – Order Granting Receiver’s 6th Fee Application for Fee Payment
- 01/15/2020 – Order Granting 6th Interim Application to Allen Matkin for Fee Payment
- 01/31/2020 – Order Granting 6th Interim Application to Mills Potoczak for Fee Payment
2020 Court Filings
- Fee Applications #6
- 11/22/2019 – Receiver’s 6th Fee Application
- 11/22/2019 – Allen Matkin’s 6th Fee Application
- 11/22/2019 – Mills Potoczak’s 6th Fee Application
- 01/15/2020 – Order Granting Receiver’s 6th Fee Application for Fee Payment
- 01/15/2020 – Order Granting 6th Interim Application to Allen Matkin for Fee Payment
- 01/31/2020 – Order Granting 6th Interim Application to Mills Potoczak for Fee Payment
- 01/07/2020 – Receiver’s Seventh Interim Report
- 01/10/2020 – Receiver’s Motion for Investor Claims Procedure
- Fee Applications #7
- 02/04/2020 – Receiver’s 7th Fee Application
- 02/04/2020 – Allen Matkin’s 7th Fee Application
- 02/05/2020 – Mills Potoczak’s 7th Fee Application
- 03/09/2020 – Order Granting Receiver’s 7th Fee Application for Fee Payment
- 03/09/2020 – Order Granting 7th Interim Application to Allen Matkin for Fee Payment
- 03/10/2020 – Order Granting 7th Interim Application to Mills Potoczak for Fee Payment
- Stipulation for Substitution of PWCG Trustee
- 03/12/2020 – Receiver’s 8th Interim Report
- Fee Applications #8
- 04/15/2020 – Receiver’s 8th Fee Application
- 04/15/2020 – Allen Matkins 8th Fee Application
- 04/15/2020 – Duffy’s 1st Fee Applications
- 04/17/2020 – Mills Potoczak 8th Fee Application
- 05/19/2020 – Order Granting Receiver’s 8th Fee Application for Fee Payment
- 05/19/2020 – Order Granting 8th Interim Application to Allen Matkin for Fee Payment
- 05/19/2020 – Order Granting 8th Interim Application to Mills Potoczak for Fee Payment
- 06/03/2020 – Order Granting Duffy’s 1st Fee Application
- 05/05/2020 – Receiver’s Motion to Pursue Claims Against Mills Potoczak
- 06/02/2020 – Receiver’s 9th Interim Report
- Fee Applications #9
- 07/16/2020 – Receiver’s 9th Fee Application
- 07/16/2020 – Allen Matkins 9th Fee Application
- 07/20/2020 – Mills Potoczak’s 9th Fee Application
- 08/12/2020 – Order Granting Receiver’s 9th Fee Application for Fee Payment
- 08/12/2020 – Order Granting 9th Interim Application to Allen Matkin for Fee Payment
- 08/12/2020 – Order Granting 9th Interim Application to Mills Potoczak for Fee Payment
- 09/22/2020 – Receiver’s 10th Interim Report
- Fee Applications #10
- 10/19/2020 – Receiver’s 10th Fee Application
- 10/19/2020 – Allen Matkins 10th Fee Application
- 10/20/2020 – Mills Potoczak’s 10th Fee Application
- 11/25/2020 – Order Granting Receiver’s 10th Fee Application for Fee Payment
- 11/25/2020 – Order Granting 10th Interim Application to Allen Matkin for Fee Payment
- 11/25/2020 – Order Granting 10th Interim Application to Mills Potoczak for Fee Payment
- Receiver’s Motion Requesting 1) Approval of Allowed Claims; 2) Disputed Claim Resolution; 3) Approving Distribution Plan; and 4) Authorizing Interim Distribution
2021 Court Filings
- Receiver’s Motion Requesting 1) Approval of Allowed Claims; 2) Disputed Claim Resolution; 3) Approving Distribution Plan; and 4) Authorizing Interim Distribution
- Investor Profit Clawback Settlements
- 01/14/2021 – Receiver’s 11th Interim Report
- Fee Applications #11
- 01/21/2021 – Receiver’s 11th Fee Application
- 01/21/2021 – Allen Matkins 11th Fee Application
- 01/21/2021 – Mills Potoczak’s 11th Fee Application
- 04/07/2021 – Order Granting Receiver’s 11th Fee Application for Fee Payment
- 04/07/2021 – Order Granting 11th Interim Application to Allen Matkin for Fee Payment
- 04/07/2021 – Order Granting 11th Interim Application to Mills Potoczak for Fee Payment
- 03/08/2021 – Receiver’s 12th Interim Report
- Fee Applications #12
- 04/05/2021 – Receiver’s 12th Fee Application
- 04/05/2021 – Allen Matkins 12th Fee Application
- 04/05/2021 – Duffy’s 2nd Fee Application
- 04/05/2021 – Notice of Hearing for 12th Fee Application
- 05/03/2021 – Order Granting Receiver’s 12th Fee Application for Fee Payment
- 05/05/2021 – Order Granting 12th Fee Application to Allen Matkin for Fee Payment
- 05/05/2021 – Order Granting 12th Fee Application to Mills Potoczak for Fee Payment
- 05/13/2021 – Receiver’s 13th Interim Report
- Fee Applications #13
- 08/05/2021 – Receiver’s 14th Interim Report
- Fee Applications #14
- 11/12/2021 – Receiver’s 15th Interim Report
2022 Court Filings
- Fee Applications #15
- 01/28/2022 – Receiver’s 16th Interim Report
- Fee Applications #16
- 03/16/2022 – Receiver’s 16th Fee Application
- 03/16/2022 – Allen Matkins 16th Fee Application
- 03/16/2022 – Duffy’s 3rd Fee Application
- 03/16/2022 – Notice of Hearing for 16th and 3rd Fee Applications
- 04/14/2022 – Order Granting Receiver’s 16th Fee Application for Fee Payment
- 04/14/2022 – Order Granting 16th Fee Application to Allen Matkin for Fee Payment
- 04/14/2022 – Order Granting Duffy’s 3rd Interim Fee Application
- 05/17/2022 – Receiver’s 17th Interim Report
- Fee Applications #17
- 09/06/2022 – Receiver’s 18th Interim Report
- Fee Applications #18
- 11/10/2022 – Receiver’s 19th Interim Report
2023 Court Filings
- Fee Applications #19
- 02/21/2022 – Receiver’s 20th Interim Report
- Fee Applications #20
- 05/18/2023 – Receiver’s 21st Interim Report and Response to Minute Order

Thomas C. Hebrank
Principal