UNITED STATES OF AMERICA

UNITED STATES OF AMERICA

Before the

SECURITIES AND EXCHANGE COMMISSION

ADMINISTRATIVE PROCEEDING

File No. 3-16941

In the Matter of

Scott A. Doak,

Respondent.

I.

:

:

:

:

:

:

:

PROPOSED PLAN OF

DISTRIBUTION

OVERVIEW

1.

The Division of Enforcement (“Division”) proposes the following plan of

distribution (“Proposed Plan”) to the Securities and Exchange Commission (“Commission”)

pursuant to Rule 1101 of the Commission’s Rules on Fair Fund and Disgorgement Plans (the

“Commission’s Rules”), 17 C.F.R. § 201.1101. If approved, in accordance with Rule 1102(a) of

the Commission’s Rules, 17 C.F.R. § 201.1102(a),1 the disgorgement, prejudgment interest, and

civil penalties paid by Scott A. Doak (“Doak”) will be transferred to the Court Registry

Investment System account (the “CRIS Account”) established in the related criminal action,

United States v. Apostelos, No. 3:15-cr-00148-TMR (S.D. Ohio) (the “Criminal Action”), for

distribution to harmed investors in accordance with the restitution process in the Criminal

Action. As explained below, the Division has concluded that distributing the funds collected in

the Commission’s administrative proceeding through the Criminal Action’s restitution process is

fair and reasonable because it would employ a more efficient use of resources to benefit

Rule 1102(a) provides that “a plan for the administration of a Fair Fund . . . may provide for payment of funds into

a court registry . . . in any case pending in federal or state court against a respondent or any other person based upon

a complaint alleging violations arising from the same or substantially similar facts as those alleged in the

Commission’s order instituting proceedings.”

1

investors harmed as a result of the Respondent’s misconduct than would two separate

distribution processes that would incur duplicative administrative and other expenses, resulting

in a significant decrease in the amount of funds available for distribution. 2

2.

The notice and comment procedures for the Proposed Plan are set forth below.

The Proposed Plan is subject to approval by the Commission.

II.

FACTUAL AND PROCEDURAL BACKGROUND

A.

The Administrative Proceeding

3.

On November 4, 2015, the Commission issued an Order Instituting

Administrative and Cease-and-Desist Proceedings Pursuant to Section 8A of the Securities Act

of 1933, Section 21C of the Securities Exchange Act of 1934, Sections 203(f) and 203(k) of the

Investment Advisers Act of 1940, and Section 9(b) of the Investment Company Act of 1940,

Making Findings, and Imposing Remedial Sanctions and a Cease-and-Desist Order (“Order”) 3

against Doak.

4.

In the Order, the Commission found that, from at least 2010 through 2014,

William M. Apostelos (“Apostelos”) and companies he controlled violated the registration and

anti-fraud provisions of the federal securities laws by conducting fraudulent, unregistered offers

of securities and misappropriating investor funds to pay earlier investors and promoters, finance

other businesses he and his wife owned, and pay his personal expenses. Doak, an emergency

medicine physician, became a client of Apostelos no later than 2007. According to the Order, in

early 2013, Doak, Apostelos, and other individuals began operating OVO Wealth Management,

Consistent with the approach used by district courts when considering whether to approve a distribution plan, the

Commission’s objective is to distribute Fair Funds in a fair and reasonable manner, taking into account relevant

facts and circumstances. See Official Committee of Unsecured Creditors of WorldCom, Inc. v. SEC, 467 F.3d 73, 82

(2d Cir. 2006), citing SEC v. Wang, 944 F.2d 80, 88 (2d Cir. 1991).

3

Securities Act Rel. No. 9976 (Nov. 4, 2015).

2

2

LLC (“OVO”), a state-registered investment adviser. After approximately a year of operations,

OVO was wound down, and Doak made oral and written misrepresentations and omissions to

OVO clients to induce them to transfer their advisory accounts to investments controlled by

Apostelos.

5.

The Order found that Doak violated the registration provisions of the federal

securities laws by offering and selling securities issued by entities controlled by Apostelos.

Doak and OVO also violated the anti-fraud provisions of the federal securities laws by making

misrepresentations and omissions while advising OVO clients to invest their advisory accounts

in investments controlled by Apostelos. Through the same conduct, Doak aided and abetted and

caused the violations of Apostelos and OVO.

6.

The Commission ordered Respondent to pay disgorgement of $86,833.34,

prejudgment interest of $2,874.44, and civil penalties of $160,000.00, for a total of $249,707.78,

to the Commission, pending a decision whether the Commission would seek to distribute funds

or transfer them to the U.S. Treasury.

7.

On June 10, 2021, the Commission issued an order 4 that created a Fair Fund,

pursuant to Section 308(a) of the Sarbanes-Oxley Act of 2002, so that the civil penalty paid,

along with the disgorgement and prejudgment interest paid, can be distributed to harmed

investors (the “Fair Fund”).

8.

The Fair Fund includes the $249,707.78 paid by Respondent. The assets of the

Fair Fund are subject to the continuing jurisdiction and control of the Commission. The Fair

Fund has been deposited in an interest-bearing account at the U.S. Department of Treasury’s

Bureau of the Fiscal Service.

4

Order Establishing a Fair Fund, Exchange Act Rel. No. 92140 (June 10, 2021).

3

9.

The Commission appointed Miller Kaplan Arase LLP, a certified public

accounting firm, as Tax Administrator for the Fair Fund on July 17, 2017, to fulfill the taxrelated obligations that the Fair Fund may incur as a Qualified Settlement Fund under the

Department of the Treasury Regulation § 1.468B-1(c). 5

B.

The Criminal Action

10.

On October 29, 2015, in United States v. Apostelos, No. 3:15-cr-00148-TMR

(S.D. Ohio 2015) (the “Criminal Action”), the United States Attorney’s Office for the Southern

District of Ohio filed a criminal indictment that charged Apostelos and his wife, Connie

Apostelos, with one count of conspiracy to commit mail and wire fraud, eight counts of mail

fraud, 13 counts of wire fraud, and one count of theft or embezzlement from an employee benefit

plan. The criminal indictment charged that beginning in 2009, and continuing for at least five

years, the couple orchestrated a Ponzi scheme in which hundreds of investors lost more than $20

million collectively.

11.

In February 2017, Apostelos pled guilty to conspiracy to commit mail and wire

fraud and theft or embezzlement from an employee benefit plan. On June 30, 2017, the court

sentenced Apostelos to 180 months of imprisonment and ordered him to pay restitution of

$32,767,578.72. 6 The court also entered orders of forfeiture as to specific assets. 7

Exchange Act Rel. No. 81154 (July 17, 2017).

Connie pled guilty to one count of mail fraud on April 4, 2017. On August 2, 2017, she was sentenced to 30

months of imprisonment. Connie was ordered to pay restitution of $224,797.98 jointly and severally with the

restitution ordered against her husband.

7

After the sentencing in the Criminal Action, the USAO engaged in collection efforts. Apostelos and his wife have

been making small regular payments, and the USAO has liquidated two of their assets. Thus far, the USAO has

collected more than $1.2 million in the restitution fund. The USAO will continue to pursue collection efforts to

increase the amount of funds available for victims.

5

6

4

III.

JOINT DISTRIBUTION OF THE FAIR FUND AND CRIMINAL RESTITUTION

FUND

12.

If the Commission approves the Proposed Plan, the Commission staff will take

necessary steps to transfer the Fair Fund, plus any accrued interest, less any taxes and fees, to the

CRIS Account established in the Criminal Action for distribution through the restitution process

in the Criminal Action.

IV.

NOTICE AND COMMENT PERIOD

13.

The Notice of the Proposed Plan of Distribution and Opportunity for Comment

(“Notice”) will be published on the Commission’s website at

http://www.sec.gov/litigation/fairfundlist.htm. Any person wishing to comment on the

Distribution Plan must do so in writing by submitting their comments to the Commission within

thirty (30) days of the date of the Notice: (a) to the Office of the Secretary, United States

Securities and Exchange Commission, 100 F Street, NE, Washington, DC 20549-1090; (b) by

using the Commission’s Internet comment form (http://www.sec.gov/litigation/admin.shtml); or

(c) by sending an email to rule-comments@sec.gov. Comments submitted by email or via the

Commission’s website should include “Administrative Proceeding File Number 3-16941” in the

subject line. Comments received will be publicly available. Persons should only submit

comments that they wish to make publicly available.

5