SACRAMENTO – The U.S. District Court for the Eastern District of California has granted the U.S government default judgment in a case involving alleged fraudulent property transfers and unpaid federal income tax assessments.
The defendants are David Edwards, his partner company Central Cinema LP, and Marcia Doerr, a trustee of LAP Trust. The state of California Franchise Tax Board was also named in the case.
According to the court order from Magistrate Judge Shelia K Oberto, the events of the case began Aug. 16, 2017. The U.S. government filed an action against the defendants requesting that all owed federal income tax assessments be reduced to a judgment as well as to provide tax liens on the properties owned by Edwards within Fresno County.
The property in question is at 451 Burl Ave. Clovis, California. Edwards conveyed the property to LAP Trust in 1995 for no monetary value. The property was then conveyed back to him and then back to LAP Trust in 2003 – both times for no consideration value.
An additional property at 330-364 South Clovis Ave. Fresno, also was conveyed for no monetary value to Take Five Trust in 1995 and then for no value to Central Cinema, in which Edwards is a partner.
The government alleged it had been defrauded by these property transfers, according to the court order. A complaint was served to Edwards and Central Cinema on Aug. 30, 2017, and when no response was heard, publication of the court filing appeared in the Fresno Bee on four occasions during January and February 2018.
Neither Edwards nor Central Cinema responded to the complaint. The government then requested that the case be ordered a default, based on the lack of response from the defendants. The default request was for $1,034,795.09 as well as interest incurred from May 31, 2018, until the sum has been paid in full.
Oberto granted the request for default judgment against the defendants for the amount requested by the government, including penalties and interest. She also declared Doerr and Central Cinema are “fraudulent transferees” to Edwards, according to the court order.
The government also was granted the ability to place liens on Edwards' Clovis and Fresno properties and foreclose upon the properties as necessary. A written objection by the defendants can be filed within 21 days of the court order.