SECURITIES COMMISSIONER S ANSWER TO THE COUNTERCLAIM OF RELIEF DEFENDANT RIZARRI FILED MARCH

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1 DISTRICT COURT, CITY AND COUNTY OF DENVER, COLORADO 1437 Bannock Street GERALD ROME, Securities Commissioner for the State of Colorado, Plaintiff, v. JOSEPH DAVID RYAN, et al. Defendants, GABRIELLE DEMEO, and AMANDA ROSE RIZARRI, a.k.a. AMANDA ROSE RIZARI, Relief Defendants. COURT USE ONLY CYNTHIA COFFMAN, Attorney General Case No. 2017CV34027 ROBERT W. FINKE, 40756* First Assistant Attorney General CATHERN H. SMITH, 39715* Ctrm.: 215 Assistant Attorney General Ralph L. Carr Colorado Judicial Center 1300 Broadway, 8th Floor Denver, CO Finke Tel: (720) Smith Tel: (720) Fax: (720) *Counsel of Record SECURITIES COMMISSIONER S ANSWER TO THE COUNTERCLAIM OF RELIEF DEFENDANT RIZARRI FILED MARCH 1, 2018

2 Plaintiff, Gerald Rome, Securities Commissioner for the State of Colorado, by and through his counsel, the Colorado Attorney General, hereby files this Answer to Relief Defendant Amanda Rose Rizarri s Counterclaim for Declaratory Relief filed March 1, The Commissioner states as follows: Counterclaim 1. The Commissioner objects to the allegations in paragraph 1 of the Counterclaim to the extent that it reaches the ultimate question before the Court (i.e., whether, notwithstanding any rights of ownership asserted by Relief Defendant Rizarri, a constructive trust or equitable lien should be imposed on 782 Vortex Avenue, Henderson, Nevada) and because owner is not defined. Without waiving these objections, the Commissioner admits that Relief Defendant Amanda Rose Rizarri acquired title to 782 Vortex Avenue through payments made directly and indirectly from investor monies which resulted in the unjust enrichment of Rizarri who failed to provide reasonably equivalent value for the benefits bestowed upon her. The Commissioner further admits that records of the Clark County Recorder state that Rizarri received an undivided 50% interest in 782 Vortex Avenue on August 15, 2017 and that Madyson Capital Management, LLC, a Colorado limited liability company, conveyed the remaining 50% interest to her on October 17,

3 2. As to the allegations of Paragraph 2, if lawful owner means notwithstanding any rights of ownership asserted by Relief Defendant Rizarri, that the lawful owner includes a person who acquired ownership through a constructive trust or equitable lien, then the Commissioner admits that a dispute has arisen regarding who is the lawful owner of 782 Vortex Avenue. The Commissioner denies the remainder of Paragraph 2 to the extent that it fails to accurately summarize the Commissioner s Complaint which seeks equitable remedies, including an equitable lien and a constructive trust, on behalf of investors, not Ryan, the Madyson Entity Defendants, and third parties other than investors. 3. As to the allegations of Paragraph 3, the Commissioner denies that Rizarri is the lawful owner of 782 Vortex. The Commissioner admits that Relief Defendant Amanda Rose Rizarri acquired title to 782 Vortex Avenue through payments made directly and indirectly from investor monies which resulted in the unjust enrichment of Rizarri who failed to provide reasonably equivalent value for the benefits bestowed upon her. The Commissioner further admits that records of the Clark County Recorder state that Rizarri received an undivided 50% interest in 782 Vortex Avenue on August 15, 2017 and that Madyson Capital Management, LLC, a Colorado limited liability company, conveyed the remaining 50% interest to her on October 17, With regard 3

4 to the remaining allegations of Paragraph 3, the Commissioner is without sufficient knowledge or information to admit or deny the remaining allegations and averments, and, therefore, denies the same. 4. The Commissioner denies that Rizarri is entitled to a declaration confirming that she is the lawful owner of 782 Vortex. The commissioner is without sufficient knowledge or information to admit or deny the remaining allegations and averments, and, therefore, denies the same. 5. The Commissioner reserves the right to list additional defenses after having the ability to conduct discovery. Dated this 5 th day of March, CYNTHIA H. COFFMAN Attorney General /s Cathern H. Smith ROBERT FINKE, 40756* First Assistant Attorney General CATHERN H. SMITH, 39718* Assistant Attorney General Financial and Health Services Unit Attorney for Plaintiff Gerald Rome, Securities Commissioner *Counsel of Record 4

5 CERTIFICATE OF SERVICE This is to certify that I duly served the foregoing SECURITIES COMMISSIONER S ANSWER TO THE COUNTERCLAIM OF RELIEF DEFENDANT RIZARRI FILED MARCH 1, 2018 upon all parties herein via the Colorado Courts E-Filing system, and by depositing copies of same in the United States mail, first-class postage prepaid, at Denver, Colorado, this 5 th day of March, 2018, addressed as follows: Martin M. Berliner Berliner McDonald P.C S. Syracuse Way, Suite 100 Greenwood Village, CO Attorney for Joseph David Ryan and the Madyson Entities John C. Smiley Sender & Smiley, LLC th Street Suite 2800 Receiver Tobin D. Kern Volant Law LLC 333 W. Hampden Ave., Suite 1000 Englewood, CO Attorney for Amanda Rose Rizarri Michael T. Gilbert Gilbert Law Office, LLC th Street, Suite 240 Attorney for John C. Smiley, Receiver John F. Young Markus Williams Young & Zimmerman LLC 1700 Lincoln Street, Suite 4550 Denver, CO Counsel to Pacific Premier Bank /s/ William Russell 5