Automated Summary
Key Facts
NHC LLC secured a $22 million judgment against Centaur Construction Co. and its principals, including Spiro Tsaparas. Despite a court-issued restraining order prohibiting asset transfers, Tsaparas made over $142,000 in personal cash withdrawals and more than $1.2 million in undisclosed transfers as a company principal. The court found him in civil contempt and ordered repayment of the transferred funds, monthly payments of $25,000, attorneys' fees, and froze his bank and Venmo accounts.
Tax Type
Federal tax liens
Issues
- The court determined whether Mr. Tsaparas's repeated, undisclosed asset transfers violated the restraining provision of the citation to discover assets, constituting civil contempt under Illinois law.
- The court evaluated whether NHC's use of a contempt motion was permissible instead of a follow-up citation examination, rejecting Mr. Tsaparas's claim that a hearing was required first.
- The court addressed whether Mr. Tsaparas's tax liens exempt him from making payments, ruling that priority documentation is needed to assess this.
Holdings
The Court grants NHC's motion and finds Mr. Tsaparas in civil contempt for repeated violations of the citation's restraining provision and failure to disclose cash transactions. The Court orders Mr. Tsaparas to pay undisclosed funds, submit monthly accountings with receipts, pay attorneys' fees, freeze bank and Venmo accounts, disclose all cash transactions since January 1, 2019, and turnover cash withdrawn in violation of the citation.
Remedies
- Mr. Tsaparas must pay NHC's reasonable attorneys' fees incurred in preparing and arguing this motion.
- Mr. Tsaparas must pay to NHC, within 14 days of this order, the additional amounts detailed in US Bank records that were transferred in violation of the citation.
- Mr. Tsaparas must disclose and account for, by no later than 14 days from entry of this order, all cash transactions for himself and/or Centaur from January 1, 2019 to the present.
- Mr. Tsaparas's bank account ending in 8753 and his Venmo account @Tsaparas are hereby frozen pending further order by the Court.
- Mr. Tsaparas must pay the balance of the judgment in monthly installments in the amount of at least $25,000.
- Any otherwise permitted cash transactions must be supported by contemporaneous receipts that must be provided with Mr. Tsaparas's monthly accounting.
- Mr. Tsaparas must turn over all cash withdrawn in violation of the citation since he was served with it, by no later than 14 days from entry of this order.
Tax Issue Category
Other
Monetary Damages
22000000.00
Legal Principles
- The court referenced Rule 69 of the Federal Rules of Civil Procedure, requiring judgment enforcement to follow Illinois state law (735 ILCS 5/2-1402 and Illinois Supreme Court Rule 277), which permits contempt sanctions for non-compliance with citations.
- The court applied the legal principle of civil contempt, finding Mr. Tsaparas in contempt for violating the restraining provision of a citation to discover assets and failing to comply with court-ordered financial disclosures.
Precedent Name
- FTC v. Trudeau
- SEC v. Hyatt
- Shales v. T. Manning Concrete, Inc.
Cited Statute
- 735 Illinois Compiled Statutes Annotated 5/2-1402
- Federal Rule of Civil Procedure 69
- Illinois Supreme Court Rule 277
Judge Name
Matthew F. Kennelly
Passage Text
- These undisclosed transfers are sufficient evidence that Mr. Tsaparas has been and is financially capable of paying additional sums of money. The Court is simply no longer able to credit Mr. Tsaparas's disclosures professing a lack of funds when those disclosures have omitted multiple large, unaccounted-for transfers of assets.
- The Court has given Mr. Tsaparas multiple opportunities to voluntarily disclose his own assets. Yet Mr. Tsaparas has continually delayed filing financial disclosures and has omitted important transfers from those disclosures. These violations amount to contempt.
- Mr. Tsaparas's repeated unaccounted-for transfers of assets blatantly disregarded this Court's unambiguous commands. The transfers violated the citation's restraining provision, which commands Mr. Tsaparas not to 'transfer' or 'dispose' of any non-exempt assets he maintains.