Judge.” For the Court - By Direction /s/ Patricia S. Connor Clerk -- 1 of 17 --… v. Tracy Calvin Dunlap, Jr.

Filed: May 30, 2001
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
Nos. 01-1382(L)
(CA-00-742)
Securities and Exchange Commission,
Plaintiff - Appellee,
versus
Tracy Calvin Dunlap, Jr.,
Defendant - Appellant.
O R D E R
The court amends its opinion filed April 23, 2001, as follows:
On the cover sheet, section 1 -- “UNPUBLISHED” is changed to
read “PUBLISHED.”
On page 2, section 5 -- the status is changed to read
“Affirmed in part, modified and vacated in part, and remanded by
published opinion. Judge King wrote the opinion, in which Judge
Widener and Judge Williams joined.”
On page 3, opening of opinion -- “PER CURIAM” is changed to
read “KING, Circuit Judge.”
For the Court - By Direction
/s/ Patricia S. Connor
Clerk

-- 1 of 17 --

PUBLISHED PUBLISHED PUBLISHED PUBLISHED
UNITED STATES COURT OF APPEALS UNITED STATES COURT OF APPEALS UNITED STATES COURT OF APPEALS UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT FOR THE FOURTH CIRCUIT FOR THE FOURTH CIRCUIT FOR THE FOURTH CIRCUIT
SECURITIES AND EXCHANGE
COMMISSION,
Plaintiff-Appellee,
v.
TRACY CALVIN DUNLAP, JR.,
Defendant-Appellant,
and
No. 01-1382
ELFINDEPAN, S.A.; SOUTHERN
FINANCIAL GROUP; BARRY LOWE;
JAMES L. MCCALL; STRATEGIC ASSET
FUNDS, S.A.; EDMUND MENDEN;
MICHAEL MENDEN; MICHAEL
ZIEGLMEIER; C.R.C.C., LLC; PATRICK
WILSON,
Defendants.

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SECURITIES AND EXCHANGE
COMMISSION,
Plaintiff-Appellee,
v.
TRACY CALVIN DUNLAP, JR.,
Defendant-Appellant,
and
No. 01-1391
ELFINDEPAN, S.A.; SOUTHERN
FINANCIAL GROUP; BARRY LOWE;
JAMES L. MCCALL; STRATEGIC ASSET
FUNDS, S.A.; EDMUND MENDEN;
MICHAEL MENDEN; MICHAEL
ZIEGLMEIER; C.R.C.C., LLC; PATRICK
WILSON,
Defendants.
Appeals from the United States District Court
for the Middle District of North Carolina, at Durham.
William L. Osteen, District Judge.
(CA-00-742)
Argued: April 2, 2001
Decided: April 23, 2001
Before WIDENER, WILLIAMS, and KING, Circuit Judges.
_________________________________________________________________
Affirmed in part, modified and vacated in part, and remanded by
published opinion. Judge King wrote the opinion, in which
Judge Widener and Judge Williams joined.
_________________________________________________________________
COUNSEL COUNSEL COUNSEL COUNSEL
ARGUED: ARGUED: ARGUED: ARGUED: K.E. Krispen Culbertson, CULBERTSON & ASSO-
CIATES, Greensboro, North Carolina; John Joseph Korzen, ANDER-
2

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SON, KORZEN & ASSOCIATES, P.C., Kernersville, North
Carolina, for Appellant. John Wallace Avery, Special Counsel, Eric
N. Miller, Kurt G. Gresenz, SECURITIES AND EXCHANGE COM-
MISSION, Washington, D.C., for Appellee. E. Clarke Dummit,
Winston-Salem, North Carolina, for prospective Intervenor. ON ON ON ON
BRIEF: BRIEF: BRIEF: BRIEF: Jacob H. Stillman, Solicitor, Katharine B. Gresham, Assis-
tant General Counsel, SECURITIES AND EXCHANGE COMMIS-
SION, Washington, D.C., for Appellee.
_________________________________________________________________
OPINION OPINION OPINION OPINION
KING, Circuit Judge:
Tracy Calvin Dunlap, Jr. ("Dunlap") appeals his civil contempt
citation and incarceration in the Middle District of North Carolina.
The contempt proceedings against Dunlap resulted from his failure
and refusal to comply, on Fifth Amendment grounds, with a prelimi-
nary injunction order (the "Injunction Order") entered by the district
court on August 17, 2000. We possess jurisdiction pursuant to the
provisions of 28 U.S.C. § 1292(a)(1). For the reasons explained
below, we sustain the assertion of Dunlap's privilege on a limited por-
tion of the Injunction Order, but find it to be otherwise unavailing.1111
We accordingly affirm in part, modify and vacate in part, and remand
for further proceedings.
I.
A.
According to the Securities and Exchange Commission ("SEC"),
_________________________________________________________________
1111 For reasons explained supra , in Part III, we also deny the motions of
Elfindepan, S.A. to intervene in these appeals and to be awarded a stay.
3

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Dunlap is the agent and control person of defendants Elfindepan, S.A.
("Elfindepan") and Southern Financial Group ("Southern Financial").
On August 10, 2000, the SEC filed its complaint in the district court
and obtained a temporary restraining order against Dunlap, Elfinde-
pan, Southern Financial (collectively, "Defendants"), and others, to
halt, and secure information concerning, an allegedly fraudulent
investment scheme.2222
On August 17, 2000, the district court entered the Injunction Order
requiring the defendants to, inter alia, produce records and account-
ings and to repatriate investor funds deposited overseas. Any funds
_________________________________________________________________
2222 In its complaint, the SEC alleges that Elfindepan, Southern Financial,
Dunlap, and Barry Lowe ("Lowe") defrauded investors nationwide in
connection with the unregistered offer and sale of securities of Elfinde-
pan, "a supposed Costa Rican financial company." Appellant's App., at
19-20. Dunlap testified before the SEC on August 3, 2000, that he is the
President, Chief Operating Officer, Chief Financial Officer, Controller,
and Accountant of Elfindepan. Appellee's App., at 196-97. He is also
listed as the Chairman of the Board in Elfindepan's corporate charter. Id.
at 224. According to his August 3 testimony, Dunlap exercised full con-
trol of Elfindepan's funds. Id. at 202-03. Dunlap occupies a similar posi-
tion with respect to Southern Financial, which is organized as a business
trust. Dunlap is a trustee of Southern Financial, the custodian of its trust
documents, and a signatory to its bank account. Id. at 200, 201, 204, 291.
The SEC alleges that the Defendants have raised at least $13.5 million
from the public in at least nine states, and that the Defendants violated
various securities laws by knowingly and recklessly making, and causing
others to make, numerous materially false statements to investors.
Among other things, the Defendants promised highly favorable returns
on investments (as much as 40-50% per month), without any reasonable
basis for such claims, and misrepresented that the investments were
secure (as by falsely claiming that Elfindepan was associated with the
International Monetary Fund and the World Bank). Additionally, inves-
tors were falsely advised that Elfindepan had been in business for
twenty-three years, when in fact the company is less than two years old.
Of significance, the SEC alleges that funds from later investors were
used to pay earlier investors, in the classic operation of a "Ponzi"
scheme. Furthermore, the SEC alleges that Dunlap did not inform inves-
tors that a substantial amount of investor money was paid to his own
family members and to support his own living expenses.
4

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not returned within five days -- by August 22, 2000 -- were to be
specifically accounted for.
After receiving an extension until August 28, 2000, Dunlap and
Elfindepan nevertheless failed to comply with the Injunction Order;
instead, they filed motions for relief therefrom, 3333 and then sought a
protective order.4444 As a result of the failure of Dunlap and Elfindepan
to comply with the Injunction Order, the SEC, on September 14,
2000, served discovery requests on them, seeking essentially the same
information called for in the accounting. Dunlap and Elfindepan filed
responses to the discovery requests on or about December 29, 2000,
six weeks after they were due. In their responses, Dunlap and Elfinde-
pan stonewalled discovery and asserted that, in light of the pending
motions they had filed, it would be "premature" to answer the inter-
rogatories or produce the documents requested.
The district court, at a hearing conducted on January 24, 2001,
denied the Defendants' motions for relief from the Injunction Order
and also denied their motions for a protective order. The court ordered
the Defendants to complete the accounting and repatriation of inves-
tor funds by February 1, 2001. The court also overruled Dunlap's and
Elfindepan's objection to answering the SEC's discovery requests,
and it ordered them to respond to the outstanding discovery requests
by February 6, 2001.
On January 25, 2001, Dunlap filed a motion requesting relief from
the district court's previous orders and asserting for the first time his
Fifth Amendment privilege against self-incrimination. The SEC
opposed Dunlap's motion and, on March 2, 2001, filed a motion for
a contempt citation against the Defendants. On March 13, 2001, the
district court conducted a hearing on the contempt request, and orally
granted the SEC's motion. By corresponding order dated March 15,
2001 (the "Contempt Order"), the court held the Defendants in civil
_________________________________________________________________
3333 Dunlap and Elfindepan filed their motion for relief from the Injunc-
tion Order on September 7, 2000, and Southern Financial filed its motion
on October 10, 2000.
4444 The motion for a protective order, which did not stay ongoing discov-
ery proceedings, was filed on October 10, 2000.
5

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contempt. The district court then gave the Defendants until noon on
March 20, 2001, to purge themselves of contempt.
In denying his Fifth Amendment claim, the district court concluded
that Dunlap could not validly assert the privilege in an effort to pre-
vent Elfindepan's and Southern Financial's compliance with the vari-
ous court orders. The court, however, did not directly address
Dunlap's personal Fifth Amendment claim of privilege.5555 The Defen-
dants failed to comply with the Contempt Order by March 20, 2001,
and, in an order entered on March 23, 2001 (the "Incarceration
Order"), the district court ordered Dunlap incarcerated for civil con-
tempt "until such time as he shall purge himself of the civil contempt
or until further orders of th[e] court." Incarceration Order, at 2.
Contemporaneous to these developments, defendant Lowe pre-
vailed upon the district court to establish receiverships for both
Elfindepan and Southern Financial. By order dated March 23, 2001
(the "Receivership Order"), the district court, exercising its inherent
equitable authority, found that "[e]xceptional circumstances exist that
warrant the appointment of a receiver[.]" Receivership Order, at 1.
Accordingly, it appointed Christy Myatt as receiver, 6666 in order to, inter
alia, "establish a receivership trust account" and to "take and maintain
custody, control and possession of all assets and properties" belong-
ing to or in the possession of Elfindepan or Southern Financial. Id. at
2. The Receivership Order also requires Myatt to file an accounting
"containing an itemized and detailed list of all property" owned by
Elfindepan and Southern Financial, along with any other reports or
accountings ordered by the court. Id. at 4. In addition to delineating
the authority and duties associated with the receiverships, the Receiv-
ership Order enjoins Dunlap from entry onto the premises of Elfinde-
_________________________________________________________________
5555 Although the SEC insists that Dunlap has waived his Fifth Amend-
ment privilege, the district court declined to make findings on that issue.
In its Contempt Order, the court stated, "To the extent Dunlap has not
waived his personal Fifth Amendment privilege . . ., defendant Dunlap
may not assert his personal Fifth Amendment privilege to prevent full
compliance with existing court Orders by defendants Elfindepan and
Southern Financial." Contempt Order, at 4.
6666 Christine L. Myatt is a partner in the Greensboro, North Carolina law
firm of Adams, Kleemeier, Hagan, Hannah & Fouts PLLC.
6

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pan and Southern Financial. It further directs the Defendants to
immediately turn over and make available to the receiver all of the
assets, books, and records of Elfindepan and Southern Financial, and
to provide an accounting to the receiver of any assets of those entities
"which have been transferred, conveyed, or disposed of since April 1,
2000." Id. at 5.
B.
From an appellate standpoint, Dunlap initially invoked our jurisdic-
tion on March 14, 2001. He joined with Elfindepan and Southern
Financial in a petition for permission to appeal the district court's
March 13, 2001 decision denying his motion to assert his Fifth
Amendment privilege and denying his request for relief from the
Injunction Order.7777 In an Order entered on March 16, 2001, in No. 01-
674, we denied without prejudice the petition for permission to
appeal, observing, however, that an appeal of right might have been
pursued under 28 U.S.C. § 1292(a)(1), inasmuch as a continuing
injunctive order was being challenged.8888 Recognizing that Dunlap and
his co-appellants had not filed a notice of appeal, we admonished
them to comply with jurisdictional requirements and also to specify
which order or orders of the district court they sought to have
reviewed.
On March 22, 2001, Dunlap filed a notice of appeal from the Con-
tempt Order. It was followed on March 23, 2001, by another notice
of appeal challenging not only the Contempt Order, but also the Incar-
ceration Order. Pursuant to these appeals,9999 Dunlap sought a stay of his
_________________________________________________________________
7777 The substance of the district court's oral ruling of March 13, 2001,
finding that Dunlap had not yet satisfied the terms of the Injunction
Order and setting forth a schedule for future compliance, was memorial-
ized in the March 15 Contempt Order.
8888 Attendant to the petition for permission to appeal, Elfindepan and
Southern Financial sought to be excused from making corporate disclo-
sures required by Rule 26.1 of the Federal Rules of Appellate Procedure,
and also sought stay pending appeal. We denied both of these requests
without prejudice.
9999 Dunlap's appeals of March 22 and March 23, 2001 have now been
consolidated in this Court. Neither Elfindepan nor Southern Financial
joined in either of these notices of appeal.
7

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incarceration and release pending appeal, both of which the SEC
opposed. By our Memorandum Order of March 27, 2001 (the "Mem-
orandum Order"), we denied the SEC's effort to dismiss these
appeals, and we granted Dunlap's motions insofar as the appeals
related to certain potentially valid Fifth Amendment claims. More
particularly, we concluded, "[T]o the extent that these appeals impli-
cate Dunlap's Fifth Amendment privilege against producing his own
personal records, or being compelled to create and produce new and
potentially incriminating documents, he possesses a potentially meri-
torious claim of Fifth Amendment privilege." Memorandum Order, at
4-5. We noted, however, that Dunlap enjoys no Fifth Amendment
privilege that would excuse his obligation to produce the existing
business records of Elfindepan and Southern Financial; we therefore
denied his motions to the extent they related to such claims. Having
granted Dunlap some relief, we also ordered that his appeals be expe-
dited, and we directed that supplemental briefs as well as appendices
be promptly filed and that oral argument be heard on April 2, 2001.
Elfindepan, whose interests had been represented in the district
court proceedings by Dunlap's attorney, filed motions in these
appeals on March 29, 2001. Although it had not noticed an appeal of
the Injunction Order or the Contempt Order, Elfindepan sought to
intervene in these appeals through new counsel. It also requested that
we grant it a stay of any further proceedings in the district court pend-
ing a Costa Rican court's ruling on certain disclosure issues.10 10 10 10
On April 2, 2001, we heard oral argument from the parties, and
also from the prospective Intervenor. Based in part on information
first presented at oral argument concerning the receiverships, we
requested and were provided with the Receivership Order, along with
materials submitted to the district court in connection therewith.
Accordingly, by order of April 4, 2001, we asked that the receiver,
_________________________________________________________________
10 10 10 10 In its motion to intervene, Elfindepan asserts that its attorney, Man-
ual Carrillo Pacheco, has "properly filed a petition with Fifth Civil Court
of San Jose requesting permission to allow Elfindepan, S.A. to release
the information requested by the SEC." Motion to Intervene, at 2.
Elfindepan further represents that Dunlap and Pacheco would be subject
to criminal prosecution if they were to disclose information demanded by
the SEC without prior clearance by the Costa Rican court.
8

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its counsel, the parties, and the prospective Intervenor make supple-
mental submissions regarding the impact of the receiverships upon
these appeals. These submissions were received on April 10, 2001,
and have been considered by the court.
II.
In these interlocutory appeals, Dunlap seeks to challenge the dis-
trict court's Contempt Order and also its Incarceration Order, both of
which constitute orders "continuing" and "refusing to dissolve or
modify" an injunction, i.e., the Injunction Order. See 28 U.S.C.
§ 1292(a)(1). As such, we possess jurisdiction over Dunlap's appeals.
III.
ELFINDEPAN'S MOTIONS
We first address the motions of Elfindepan to intervene and to be
awarded a stay. Although Elfindepan was a named defendant in the
proceedings below -- and is indeed subject to the contempt citation
entered by the district court -- it has failed to notice an appeal chal-
lenging either the Injunction Order or the Contempt Order. Of impor-
tance, in the Contempt Order the district court made an explicit
finding that Dunlap is "an agent and control person of Elfindepan[.]"
Contempt Order, at 2. This is a finding of fact that Dunlap and
Elfindepan now contest.
Rather than appeal the district court's Injunction Order or its Con-
tempt Order, as it was entitled to do under § 1292(a)(1), Elfindepan
has instead elected to wait and attempt to "intervene" on appeal.
Alternatively, Elfindepan has requested that we grant it a stay of any
further proceedings in the district court. However, Elfindepan has not
pursued relief in the district court by means of a stay pending appeal.
This constitutes an omission we cannot properly ignore. Under Rule
8 of the Federal Rules of Appellate Procedure, Elfindepan must either
"move first in the district court" for stay relief or "show that moving
first in the district court would be impracticable[.]" Fed. R. App. P.
8(a). See, e.g., Hirschfeld v. Bd. of Elections, 984 F.2d 35, 38 (2nd
Cir. 1993) (denying motion to stay judgment because there was "no
9

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explanation why the instant motion for a stay pending appeal was
made in the first instance to [the appellate court.]"). Elfindepan has
plainly failed to satisfy the requirements of Rule 8, and we therefore
deny its motions without prejudice.11 11 11 11
IV.
THE CHALLENGED ORDERS
A. Dunlap Personally
To the extent that the Injunction Order and the Contempt Order
require Dunlap to produce his personal records, or to create and pro-
duce a sworn accounting regarding his personal financial transactions
and assets, those orders implicate his Fifth Amendment protections.
They should be modified as necessary to ensure that they do not con-
flict with Dunlap's Fifth Amendment privilege against self-
incrimination. See Bellis v. United States, 417 U.S. 85, 87 (1974) ("It
has been long established, of course, that the Fifth Amendment privi-
lege against compulsory self-incrimination protects an individual
from compelled production of his personal papers and effects as well
as compelled oral testimony.").
The SEC asserts that the Contempt Order does not reach Dunlap
personally, and that it was never so intended. Instead, according to the
SEC, it is confined to his representative capacity as an agent and con-
trol person of Elfindepan and Southern Financial. Upon examination
of the orders, however, we conclude that the limitation asserted by the
SEC is arguably ambiguous. The Contempt Order specifies that Dun-
lap, in such representative capacity, shall purge his contempt by "fully
_________________________________________________________________
11 11 11 11 We note additionally that Elfindepan appears to be ineligible to inter-
vene on appeal, since it is an original party to the suit in the district court.
See Black's Law Dictionary 820 (6th ed. 1990) (defining "Intervention"
as "[t]he procedure by which a third party not originally a party to the
suit, but claiming an interest in the subject matter, comes into the
case[.]") (emphasis added). See also Dues v. Allstate Ins. Co., 15 F.3d
506, 525 (5th Cir. 1994) ("The purpose of intervention is to admit, by
leave of court, a person who is not an original party into a proceeding.")
(emphasis added).
10

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comply[ing] with all existing Court orders, including the preliminary
injunction[.]" Contempt Order, at 5. The Injunction Order, however,
clearly contemplates that Dunlap testify and produce documents in his
personal capacity -- as well as on behalf of Elfindepan and Southern
Financial. Because, as even the SEC recognizes, Dunlap possesses a
valid Fifth Amendment privilege against production and testimony in
his personal capacity, the Contempt Order must be modified and
vacated to the extent, if any, it encompasses such obligations.
B. Southern Financial
1. Business Records
As we have noted, the district court found Dunlap to be the "con-
trol person" of Southern Financial. Significantly, Dunlap does not dis-
pute this finding on appeal. Under the Injunction Order, Southern
Financial must provide the SEC with a sworn accounting of the fol-
lowing: (a) "all securities, funds, real estate, and other assets" held in
its name or in which it has any direct or indirect beneficial interest;
(b) "each account with any financial institution or brokerage firm" in
which it has or had any direct or indirect beneficial interest; and (c)
"every transaction in which any funds or other assets of any kind were
transferred" from Southern Financial to any other defendant in this
action, or to any other person or entity in which Southern Financial
had an ownership interest. Injunction Order, at 9. The Injunction
Order further requires Southern Financial to take such steps as are
necessary to repatriate certain funds and assets described in the SEC's
complaint, and also requires it to provide the SEC and the district
court with a written description of the funds repatriated. Id. at 10.
Although the Injunction Order does not recognize a distinction
between the production of existing business records and the creation
of new documents, that distinction is a factor in our Fifth Amendment
analysis. See, e.g., United States v. Doe, 465 U.S. 605, 610-12 (1984)
(observing that the contents of voluntarily prepared business records
are not privileged). Insofar as the Injunction Order's accounting
requirement can be satisfied by the production of business records
created by Southern Financial in the ordinary course of its business,
Dunlap cannot avail himself of the Fifth Amendment privilege to
evade compliance. See Braswell v. United States, 487 U.S. 99, 100
11

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(1988). As the control person of Southern Financial, Dunlap bears
responsibility for ensuring that the existing business records are pro-
duced. The SEC acknowledges that Dunlap's obligation in this regard
has been partially fulfilled.
On appeal, Dunlap concedes that not all of Southern Financial's
records have been produced. Significantly, he also acknowledges that
he has not complied with the mandate to repatriate investor funds. He
requests that we direct his release from custody under proper condi-
tions, so that he may see Southern Financial's production through to
completion. We decline to so direct, however, because Dunlap admit-
tedly remains in defiance of both the Injunction Order and the Con-
tempt Order, at least vis-a-vis Southern Financial's business records.
We are unable to view the sanctions imposed upon Dunlap -- incar-
ceration pending his compliance with valid court orders -- as an
abuse of discretion by the district court.
Moreover, contrary to Dunlap's contention on appeal, we are not
convinced that appointment of the receiver for Southern Financial so
undermines Dunlap's obligations under the Injunction Order as to
mandate his immediate release from custody. The Receivership Order
contemplates that the receiver shall "take and maintain custody, con-
trol and possession of all assets and properties . . . belonging to . . .
Southern Financial[.]" Receivership Order, at 2. However, it further
directs the defendants, including Dunlap, to immediately turn over to
the receiver all books and records of Southern Financial. Id. at 5.
While creation of the receivership imposes an additional duty upon
Dunlap, i.e., to produce Southern Financial's business records to the
receiver, it does not explicitly excuse his pre-existing obligations
under the Injunction Order. Dunlap plainly remains in contempt of the
district court's orders, notwithstanding the appointment of the
receiver for Southern Financial. We therefore deny his request that
this Court order his release from custody.12 12 12 12
_________________________________________________________________
12 12 12 12 Our denial of Dunlap's request is without prejudice, in that it does
not preclude him from renewing the request before the district court on
remand. To the extent that Dunlap regards the Receivership Order as
conflicting with the district court's prior orders, or rendering compliance
impossible -- by, for example, barring Dunlap's entry onto the premises
of Southern Financial, see Receivership Order, at 5 -- those concerns
should be presented first to the district court.
12

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2. Accounting and Repatriation
To the extent the Injunction Order requires Southern Financial to
prepare a new accounting -- not contained in its existing business
records -- Dunlap's Fifth Amendment claim fails to provide protec-
tion to him. While it is true that the Court's decision in Braswell
secures Dunlap's immunity from prosecution for acts done in comply-
ing with his obligations to produce records as Southern Financial's
control person, Dunlap's privilege against self-incrimination does not
excuse him from causing such an accounting to be created. Given his
established status as control person, it is incumbent upon Dunlap to
take the appropriate actions within his authority to ensure Southern
Financial's compliance with the Injunction Order and the Contempt
Order. See Wilson v. United States, 221 U.S. 361, 376 (1911) ("A
command to the corporation is in effect a command to those who are
official responsible for the conduct of its affairs. If they, apprised of
the writ directed to the corporation, prevent compliance or fail to take
appropriate action within their power for the performance of the cor-
porate duty, they, no less than the corporation itself, are guilty of dis-
obedience, and may be punished for contempt.") (quoted in Colonial
Williamsburg Found. v. Kittenger Co., 38 F.3d 133, 137 (4th Cir.
1994)). We must therefore reject Dunlap's assertion that he may not
properly be adjudged in contempt for his failure and refusal to cause
Southern Financial to produce the required accounting.13 13 13 13
C. Elfindepan
Although the parties have quarreled in district court and on appeal
as to Elfindepan's precise status under Costa Rican law, the district
court found it to be "an artificial entity within the meaning of [Bras-
well], doing business in the form of a corporation." Contempt Order,
at 1 (citations omitted). The court also made an explicit finding that
Dunlap is "an agent of and control person of Elfindepan[.]" Contempt
_________________________________________________________________
13 13 13 13 As to Dunlap's persisting obligation to see to the repatriation of
funds and assets on behalf of Southern Financial, the district court may
well decide to facilitate such compliance by releasing Dunlap on an
appropriate bond. Any such bond would undoubtedly be substantial --
in an amount adequate to protect the allegedly injured investors -- and
would of course have to be adequately secured.
13

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Order, at 2. Elfindepan, in its motion to intervene, and Dunlap, in the
district court, have asserted that Costa Rican law precludes Dunlap
from complying with the Injunction Order insofar as it requires Dun-
lap to produce records of Elfindepan's shareholders and business
transactions. The SEC has consistently rejected these arguments,
insisting that Costa Rican law poses no such barrier to compliance.
Dunlap, in turn, now asserts that he was fired this past January from
his position as President of Elfindepan and no longer serves as the
entity's control person. Given his purported lack of authority, Dunlap
argues that it is impossible for him to comply with the Injunction
Order and the Contempt Order, particularly insofar as those orders
require him to produce records and implement funds repatriation
efforts on behalf of Elfindepan.
1. Business Records
With respect to the Injunction Order's requirement that Dunlap
produce Elfindepan's existing business records -- records implicating
neither Dunlap's Fifth Amendment privilege nor his right to use
immunity under Braswell, see supra Part IV.B.1 -- Dunlap asserts
that such disclosures would violate Costa Rican law and subject him
personally to criminal sanctions. This issue was raised to a limited
extent before the district court. To establish his position, Dunlap pres-
ented the Affidavit of Marco Antonio Mata-Coto, a Costa Rican attor-
ney. See Appellee's App., at 306-09. The SEC countered this point
with experts of its own, contending that Costa Rican law imposes no
such barriers to Dunlap making the disclosures required of Elfinde-
pan. See id. at 16-19.
Although the district court ordered Dunlap to produce the Elfinde-
pan records to the SEC, it is unclear what significance, if any, it gave
to Dunlap's assertion that Costa Rican law prevented his disclosure
of these records in an American courtroom. The district court should
fully evaluate and make findings in this respect, specifically determin-
ing the nature and significance, if any, of Costa Rican law to this mat-
ter. The determinations of a district court on foreign law are treated
as rulings on questions of law, see Fed. R. Civ. P. Rule 44.1, and, as
such, are subject to de novo review on appeal.14 14 14 14 At this juncture, how-
_________________________________________________________________
14 14 14 14 Rule 44.1 provides, in pertinent part, that "[t]he court, in determining
foreign law, may consider any relevant material or source, including tes-
timony, whether or not submitted by a party or admissible under the Fed-
eral Rules of Evidence."
14

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ever, we cannot review the district court's determination of Costa
Rican law, because the district court did not explicitly decide the
issue. Thus, on remand the district court should determine, under the
guidelines of Rule 44.1, what Costa Rican law actually provides, and
its significance, if any, in this matter.
2. Accounting and Repatriation
The SEC contends, in this court as well as the district court, that
Dunlap's assertions regarding Costa Rican law do not reach the
Injunction Order's directions to provide an accounting to the SEC and
to repatriate investor funds. We are constrained to agree with the SEC
on this point. Dunlap, however, also claims that he is no longer in a
position to provide an accounting or repatriate Elfindepan's investor
funds, given that he allegedly has been relieved of his duties as Presi-
dent. The problem with Dunlap's claim in this regard, however, is that
the district court made an explicit factual finding to the contrary.
Despite Dunlap's efforts to persuade the district court -- and now this
court -- that he is no longer the control person of Elfindepan, and
thus incapable of securing compliance with the Injunction Order,
there is insufficient evidence for us to conclude that the district
court's finding was clearly erroneous. Thus, to the extent the district
court found Dunlap in contempt for Elfindepan's failure to provide
the SEC with an accounting and its failure to repatriate investor funds,
we must affirm.15 15 15 15
V.
For the reasons set forth above, we deny Elfindepan's motions to
intervene and for issuance of a stay of the district court proceedings;
we affirm the Contempt Order and the Incarceration Order in large
part; we modify and vacate the Contempt Order to a limited extent;
_________________________________________________________________
15 15 15 15 As we concluded supra, in Part IV.B.2, Dunlap's securing of an
accounting by and on behalf of a business entity that he controls does not
implicate his Fifth Amendment rights. Furthermore, whether the Receiv-
ership Order affects the district court's previous determination that Dun-
lap is the control person of Elfindepan is an issue to be first determined
by the district court. See supra Part IV.B.1 & note 12.
15

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and we remand to the district court for such further proceedings as
may be appropriate.
AFFIRMED IN PART, MODIFIED AND
VACATED IN PART, AND REMANDED
16

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