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Alfaro loses bid to get back all of his seized property

November 21, 2018

San Antonio oil and gas businessman Brian Alfaro failed Tuesday in his bid to get back all of the property that was seized from his home earlier this month to satisfy an $8 million court judgment.

U.S. Bankruptcy Judge Craig Gargotta Tuesday declined to order the return of a Ferrari, a Mercedes-Benz, two Vespas, 24 wristwatches, jewelry and other assets that were seized from Alfaro’s Shavano Park home.

Instead, Alfaro and the nine plaintiffs who won the judgment agreed to the appointment of a receiver who will oversee the seized property.

Twenty-eight investors had sued Alfaro and three of his companies in 2015 alleging he had operated a Ponzi scheme that used their money to fund his “rather lavish lifestyle complete with multimillion-dollar estates and exotic sports cars.” The investors believed they were buying working interests in oil and gas wells.

RELATED: Ferrari, Mercedes, jewelry seized from Alfaro’s home in Shavano Park

Gargotta agreed with nine of the investors and awarded them $8 million last December. Alfaro is appealing the judgment.

The judge has scheduled a Dec. 18 hearing to decide whether any of the property taken by U.S. marshals under a writ of execution was exempt from seizure and should be returned to Alfaro.

“It’s not perfect,” Gargotta said of his solution. “I’m trying to balance the equities here.”

Gargotta came up with a King Solomon-like resolution in regards to Alfaro’s request for the return of his and wife’s clothes. Among the seized assets were 106 shoes and nearly 50 suits, sport coats and pants.

“What I’ll do is half,” Gargotta ruled. “You keep half; they get half back. You all figure out how to divide it up.

“Whatever it is, if there’s 50 pairs of shoes, 25 (each),” the judge added. “If there’s 10 sport coats, five each.”

Patrick Schurr, Alfaro’s attorney, argued the property seizure was wrong because the writ of execution — issued in April — had expired. Personal property belonging to Alfaro’s wife and four children also were taken and “done purely for harassment and intimidation,” Schurr said in a court filing.

“They did not follow the rules,” Schurr told the judge. “The remedy here is, give us our stuff back.”

Schurr also sought sanctions against the lawyers for the investors, but Gargotta didn’t take up the matter Tuesday.

The property seizure is part of an effort to get the investors’ judgment paid. If the judge rules property was properly seized, then the receiver could sell it.

If that happens and Alfaro then wins his appeal, Schurr indicated there will be litigation to get the property back.

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Gargotta has given each side until Nov. 28 to present the names of three individuals who could serve as the receiver.

Lawrence Morales II, a lawyer for the investors, expressed concerns that Alfaro is squandering assets that could go to pay investors.

“We believe that some of the evidence is going to demonstrate that Mr. Alfaro has taken no steps to satisfy the judgment,” Morales told the judge. “Some of the evidence will be that after the court’s judgment, Ferraris were purchased.”

In a court filing Tuesday, Morales said an oil and gas company headed by Alfaro’s wife, Kristi Alfaro, purchased two condominium units in August. Brian Alfaro disclaimed interest in the condo units, the document said.

“There are significant payments being made to assets that were acquired after the judgment that could have been used to satisfy this judgment,” Morales said in court.

Patrick Danner is a San Antonio-based staff writer covering banking and civil courts. Read him on our free site, mySA.com, and on our subscriber site, ExpressNews.com. | pdanner@express-news.net | Twitter: @AlamoPD

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