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A federal judge on Friday denied a request to pay legal fees for Curtis L. DeYoung from the remaining funds of clients of his American Pension Services where $24 million is missing.
"We are not going to further injure the APS clients," U.S. District Judge Robert Shelby said at the conclusion of a hearing Friday that was part of a lawsuit by federal regulators filed against DeYoung.
But Shelby left open the question of whether funds from DeYoung's personal 401(k) retirement account might be approved for use for legal fees, though a court-appointed receiver already is seeking the return of those monies, too.
In denying the legal fees, Shelby also approved a motion by DeYoung's attorney, Paul Moxley, to withdraw from the case.
Invited by Shelby to address Moxley's request to withdraw, DeYoung made an emotional statement that he was being harassed by the court-appointed receiver, Los Angeles attorney Diane Thompson.
In addition to seizing APS assets, Thompson recently filed a separate lawsuit against DeYoung and his wife, Michelle, seeking the return of salaries and retirement funds they paid themselves while operating American Pension Services.
"They took everything I had," DeYoung, 57, of Draper, told Shelby.
He pointed to a freeze put on his wife's credit card and a deposition the receiver conducted of his wife's new employer as "harassment."
"I look at all this as kind of a joke or farce," DeYoung said.
Shelby's ruling left DeYoung without an attorney and DeYoung indicated it was not likely he could afford one now, to which Shelby replied "it's a bad situation for everyone."
DeYoung also is facing a grand jury criminal investigation and an FBI agent was present in court on Friday to observe the proceedings.
The Securities and Exchange Commission sued Curtis DeYoung and the company in April alleging that he had misappropriated tens of millions of dollars from the accounts of clients who place their money with the company and then direct their own investments. The company earns fees from holding the accounts but is not allowed under law to use clients' retirement monies.
An investigation by the receiver showed that $24 million was missing from client accounts that went into ill-conceived investments and for other purposes, and that DeYoung allegedly covered up the loss with an accounting entry.
Michelle DeYoung has filed for divorce and is trying to intervene in the SEC case in order to protect any assets she claims she is due as a result of the marriage.
Curtis DeYoung has entered a settlement with the SEC but it still needs approval by the agency in Washington, D.C., and then by Shelby.