UNITED STATES OF AMERICA
COMMODITY FUTURES TRADING COMMISSION
|In the Matter of:||)||CFTC Docket No: 00-25|
|William G. Billings||)|
|)||ORDER INSTITUTING PROCEEDINGS|
|Bartlesville, Oklahoma 74006||)||PURSUANT TO SECTIONS 6(c)|
|)||AND 6(d) OF THE COMMODITY|
|and||)||EXCHANGE ACT, AS AMENDED,|
|)||MAKING FINDINGS AND|
|Billfund, Inc.||)||IMPOSING REMEDIAL SANCTIONS|
|Bartlesville, Oklahoma 74006||)|
The Commodity Futures Trading Commission ("Commission") has reason to believe that William G. Billings ("Billings") and Billfund, Inc. (collectively, the "Respondents") have violated Sections 4b(a)(i), 4b(a)(ii), 4b(a)(iii), 4o(1) and 4n(4) of the Commodity Exchange Act, as amended ("Act"), 7 U.S.C. §§ 6b(a)(i), 6b(a)(ii), 6b(a)(iii), 6o(1) and 6n(4) (1994), and Commission Regulations 4.20, 4.21 and 4.22, 17 C.F.R. §§ 4.20, 4.21 and 4.22 (1999). Therefore, the Commission deems it appropriate and in the public interest that a public administrative proceeding be, and hereby is, instituted to determine whether Billings and Billfund, Inc. engaged in the violations as set forth herein and to determine whether any order should be issued imposing remedial sanctions.
In anticipation of the institution of this administrative proceeding, Billings and Billfund, Inc. have submitted a Joint Offer of Settlement ("Offer") that the Commission has determined to accept. Respondents Billings and Billfund, Inc. acknowledge service of this Order Instituting Proceedings Pursuant to Sections 6(c) and 6(d) of the Commodity Exchange Act, As Amended, Making Findings and Imposing Remedial Sanctions ("Order"). Respondents each admit the findings herein and consent to the use of the findings herein in this proceeding and in any other proceeding brought by the Commission or to which the Commission is a party.
The Commission finds that:
At various times between 1988 and 1997 (the "relevant time"), Billings operated three commodity pools, BilCom, the 20% Fund and Billfund, LP, which collectively took in approximately $1,644,700 from more than forty pool participants ("investors"), distributed $731,495 back to investors and lost approximately $504,400 trading investors' funds. The remaining $409,000 was misappropriated by Billings for personal use. Billings fraudulently guaranteed profits to investors in the 20% Fund of 20% per year. Billings concealed trading losses from the BilCom, 20% Fund and Billfund, LP investors and sent out account statements to the investors falsely reporting gains in their accounts. Billings misappropriated Billfund, LP assets and used them as collateral for his personal bank loans and for other personal uses, commingled pool property with the property of others and failed to provide disclosure documents to pool participants.
Respondent William Billings, 61 years old, whose address is 1493 Oakdale, Bartlesville, Oklahoma 74006, is the president of Billfund, Inc. Billings was registered as an associated person ("AP") of Billfund, Inc., a registered commodity pool operator ("CPO") and commodity trading advisor ("CTA"), from December 21, 1988 until January 21, 1999, when his registration was terminated as a result of an action brought by the National Futures Association ("NFA").
Respondent Billfund, Inc., a Delaware corporation, located at 1493 Oakdale, Bartlesville, Oklahoma 74006, was registered with the Commission as a CPO and CTA in December 1988. Billfund, Inc. operated one commodity pool, Billfund, LP. Billings was the only officer and principal of Billfund, Inc. Billfund, Inc.'s registrations as a CPO and CTA were terminated on January 21, 1999 as a result of an action brought by the NFA.
1. BilCom and the 20% Fund
In about 1986, Billings began an investment fund, which he called BilCom and operated as a commodity pool. BilCom had only a few investors.
At about the same time that he formed BilCom, in 1986, Billings began what he called the 20% Fund. Billings solicited potential investors by telling them variously that he generally achieved returns of more than 20 percent per year and that his returns in good times made up for any losses incurred in bad times. Billings characterized investments in the 20% Fund as "personal loans" to Billings, which were made purportedly in return for his promise to pay investors 20% interest compounded annually on those "loans." Investors understood that, for the most part, Billings would use the money to trade in the commodity futures markets. Billings told investors that his success or failure in trading supposedly would not affect his promise to pay investors 20% compounded interest. While a few investors requested and received interest payments on a regular basis, many others allowed the interest to roll over year after year in order to compound the interest Billings owed them.
Billings commingled funds he received from 20% Fund and BilCom investors with his own personal funds in trading accounts he opened in his own name at two futures commission merchants ("FCMs"). Billings incurred consistent trading losses, but generally did not disclose the losses to 20% Fund and BilCom investors. Instead, he sent account statements to those investors reporting gains in their accounts. In the case of the 20% Fund investors, the statements were issued only annually and reported simply a 20% gain in the account. Because many investors allowed the compounded interest to accrue, the annual statements reported sizeable purported gains from year to year. In the case of the BilCom investors, Billings sent them monthly statements that reported false gains.
2. Billfund, LP
Although he knew that almost all of their investments had actually been lost trading, Billings told the BilCom and 20% Fund investors that they could transfer some or all of their investments into the Billfund, LP pool, which Billings started in 1992.1 Some investors withdrew their money, but several agreed to transfer their purported BilCom or 20% Fund investments into Billfund, LP. Because Billings did not have the investment dollars that the investors believed he was managing for them, the transfer of funds occurred on paper only and falsely inflated the amount actually invested in Billfund, LP. Billings took in new capital for the Billfund, LP pool of approximately $555,000. From 1993 through 1998, Billings distributed approximately $295,000 to Billfund, LP investors.
To make up the difference between the amount of investment capital that Billfund, LP actually had and the amount Billings was reporting that the pool had, Billings took out a personal bank loan in 1994 for $300,000 to purchase a $300,000 certificate of deposit in Billfund, LP's name. He posted the certificate of deposit as collateral for the loan. He did not advise investors that the Billfund, LP certificate of deposit, purportedly an asset of the pool, was encumbered.
Billings knowingly signed and issued account statements to the Billfund, LP investors that contained false and misleading representations of the pool's net asset value ("NAV"). The monthly statements thus reported an artificially high NAV and did not disclose that the NAV was based, in part, on encumbered assets. Billings eventually posted a total of three Billfund, LP certificates of deposit totaling $425,000 as collateral for his personal loans. The certificates of deposit were recorded as unencumbered assets on Billfund, LP's annual financial statements.2
3. Disclosure Documents
Billings did not provide disclosure documents to BilCom or 20% Fund investors. Although Billings prepared disclosure documents for Billfund, LP, he did not provide them to all investors and those that he did provide were given to investors after their investments were made. Further, he never obtained signed acknowledgements of receipt of the disclosure documents from most of the investors. He also failed to submit copies of any disclosure documents to the Commission. The disclosure documents that Billings provided to Billfund, LP investors did not fully or accurately disclose the results of Billings' personal trading, which was generally unprofitable.
Billings commingled pool funds with his personal assets and the assets of other pools. Billings placed investor funds for BilCom and the 20% Fund in his personal bank and trading accounts. He used the money in his personal accounts for futures trading, personal expenses, and payments to investors.
D. VIOLATIONS OF THE ACT AND COMMISSION REGULATIONS
1. Billings and Billfund, Inc. Cheated and Defrauded Pool Participants
Sections 4b(a)(i) and 4b(a)(iii) of the Act prohibit cheating or defrauding or attempting to cheat or defraud or willfully deceiving or attempting to deceive other persons in connection with futures trading. Billings and Billfund, Inc. violated Sections 4b(a)(i) and 4b(a)(iii) by purposefully failing to notify BilCom, 20% Fund and Billfund, LP pool investors about losses from trading futures, by mailing statements to BilCom, 20% Fund and Billfund, LP pool investors in which they knowingly reported nonexistent profits, omitted actual trading losses and falsely represented the financial condition of each pool, by intentionally misrepresenting to investors the true value of pool assets, by misrepresenting Billings' personal trading record in disclosure documents provided to Billfund, LP investors and by misappropriating Billfund, LP investor funds when he used such funds to collateralize personal bank loans and for other personal use. See In re R&W Technical Services, Ltd., [1998-1999 Transfer Binder] Comm. Fut. L. Rep. (CCH) ¶ 27,582 (CFTC March 16, 1999), aff'd in relevant part, 205 F.3d 165 (5th Cir. 2000) (respondents violated Section 4b(a)(i) and 4b(a)(iii) by making material misrepresentations); In re Clancy, [1980-1982 Transfer Binder] Comm. Fut. L. Rep. (CCH) ¶ 21,126 at 24,561 (CFTC 1980) (converting customer money to own use violates Section 4b).
Section 4b(a)(ii) of the Act prohibits willfully making or causing to be made false reports or statements. Billings and Billfund, Inc. violated Section 4b(a)(ii) of the Act by mailing statements to BilCom, 20% Fund and Billfund, LP pool investors in which they knowingly reported nonexistent profits, omitted actual trading losses and falsely represented the true financial condition of each pool. See, e.g., CFTC v. McLaurin, [1994-1996 Transfer Binder] Comm. Fut. L. Rep. (CCH) ¶ 26,786 at 44,180 (N.D. Ill. July 3, 1996) (reporting nonexistent profits and overstating the balances in accounts violates Section 4b(a)(ii) of the Act).
2. As CPOs, Billings and Billfund, Inc. Cheated and Defrauded Pool Participants By Use Of The Mails To Engage In Activities Which Operated As A Fraud Upon Them
A CPO is "any person engaged in a business that is of the nature of an investment trust, syndicate, or similar form of enterprise, and who, in connection therewith, solicits, accepts, or receives from others, funds, securities, or property, either directly or through capital contributions, the sale of stock or other forms of securities, or otherwise, for the purpose of trading in any commodity for future delivery on or subject to the rules of any contract market." Section 1a(4) of the Act, 7 U.S.C. § 1a(4) (1994). "The term `person'. . . includes individuals, associations, partnerships, corporations and trusts." Section 1a(4) of the Act, 7 U.S.C. § 1a(15) (1994). Billings and Billfund, Inc. acted, and were registered as, CPOs throughout the relevant time in that they solicited, accepted and pooled funds from investors for futures trading.
Section 4o(1)(A) of the Act makes it unlawful for a CPO to employ any device, scheme or artifice to defraud any pool participant or prospective pool participant by use of the mails or any means or instrumentality of interstate commerce. Similarly, Section 4o(1)(B) of the Act prohibits a CPO from directly or indirectly engaging in any practice or course of business which operates as a fraud or deceit upon any client or participant by the use of the mails or any means or instrumentality of interstate commerce.
The same conduct that constitutes violations of Section 4b can constitute violations of Section 4o(1). CFTC v. Skorupskas, 605 F. Supp. 923, 932-33 (E.D. Mich. 1985) See also Hirk v. Agri-Research Council, Inc., 561 F.2d 96, 103-04 (7th Cir. 1977) (fraudulent inducement is covered by both Sections 4b and 4o of the Act). During the relevant time, Billings and Billfund, Inc. violated Section 4o(1) of the Act by virtue of the same fraudulent acts, misrepresentations and omissions discussed above that violated Section 4b.
3. Billings and Billfund, Inc. Failed to Furnish Statements to Pool Participants
Section 4n(4) of the Act and Regulation 4.22 require CPOs to regularly furnish statements of account to each pool participant. Such statements must include accurate and complete information as to the current status of all trading accounts in which the participant has an interest. During the relevant time, Billings and Billfund, Inc. violated Section 4n(4) of the Act and Regulation 4.22 by (1) failing to regularly furnish account statements to each participant in the 20% Fund, and (2) failing to prepare and provide accurate account statements, to the extent they did provided account statements, to BilCom, 20% Fund and Billfund, LP investors.
4. Billings and Billfund, Inc. Commingled Pool Assets
Pursuant to Regulation 4.20, a CPO must operate its pool as an entity cognizable as a legal entity separate from that of the pool operator and may not commingle the property of any pool it operates with the property of any other person. Billings and Billfund, Inc. violated Regulation 4.20 by failing to operate the 20% Fund and BilCom pools as separate entities, commingling pool property with Billings' own funds and with the funds of other pools and posting Billfund, LP assets as collateral for personal loans.
5. Billings and Billfund, Inc. Failed To Provide Disclosure Documents To Pool Participants
Regulation 4.21 provides that a CPO who is registered or required to be registered under the Act may not, directly or indirectly, solicit, accept or receive funds, securities or other property from a prospective participant in a pool that it operates or that it intends to operate unless, on or before the date it engages in that activity, the CPO delivers or causes to be delivered to the prospective participant a Disclosure Document for the pool. The CPO may not accept or receive funds, securities or other property from a prospective participant unless the pool operator first receives from the prospective participant an acknowledgement signed and dated by the prospective participant stating that the prospective participant received a Disclosure Document for the pool.
Billings and Billfund, Inc. violated Regulation 4.21 by failing to provide disclosure documents to, and obtain signed acknowledgements of receipt of such disclosure documents from, 20% Fund and BilCom investors, by providing inaccurate disclosure documents to Billfund, LP investors and by failing to provide disclosure documents and obtain signed acknowledgements from Billfund, LP investors prior to accepting and trading their money.
OFFER OF SETTLEMENT
Billings and Billfund, Inc. have submitted an Offer of Settlement in which they, subject to the foregoing: acknowledge service of this Order and admit the jurisdiction of the Commission with respect to the matters set forth in this Order; waive: (1) the service and filing of a complaint and notice of hearing; (2) a hearing and all post-hearing procedures; (3) judicial review by any court; (4) any objection to the staff's participation in the Commission's consideration of the Offer; (5) all claims which they may possess under the Equal Access to Justice Act, 5 U.S.C. § 504 (1994) and 28 U.S.C. § 2412 (1994), as amended by Pub. L. No. 104-121, §§ 231-232, 110 Stat. 862-63, and part 148 of the Commission's Regulations, 17 C.F.R. §§ 148.1, et seq. (1999), relating to, or arising from this action; and (6) any claim of double jeopardy based upon the institution of this proceeding or the entry in this proceeding of any order imposing a civil monetary penalty or any other relief;
The Respondents stipulate that the record basis on which the Order is entered consists of the Order and the findings to which Respondents consented to in the Offer, which are incorporated in this Order. The Respondents consent to the Commission's issuance of this Order, which makes findings as set forth herein and orders that; (1) the Respondents cease and desist from violating the provisions of the Act and the Commission Regulations they are found to have violated; (2) the Respondents be permanently prohibited from trading on or subject to the rules of any contract market; (3) all contract markets refuse Respondents trading privileges, beginning the third Monday after the date of this Order; (4) the Respondents. liquidate all futures and options on futures positions held by them or on their behalf, or in which they have any beneficial interest, before commencement of the denial of their trading privileges; (5) Billings pay a contingent civil monetary penalty of up to $400,000 pursuant to a ten year payment plan; and (6) the Respondents comply with their undertakings as set forth in the Offer and incorporated in this Order.
FINDING OF VIOLATIONS
Solely on the basis of Billings' and Billfund, Inc.'s consent, as evidenced by the Offer, and prior to any adjudication on the merits, the Commission finds that Billings and Billfund, Inc. violated Sections 4b(a)(i), 4b(a)(ii), 4b(a)(iii), 4n(4) and 4o(1) of the Act, 7 U.S.C §§ 6b(a)(i), 6b(a)(ii), 6b(a)(iii), 6n(4) and 6o(1)(1994), and Commission Regulations 4.20, 4.21 and 4.22, 17 C.F.R. §§ 4.20, 4.21 and 4.22 (1999).
Accordingly, IT IS HEREBY ORDERED THAT:
1. Billings and Billfund, Inc. shall cease and desist from violating Sections 4b(a)(i), 4b(a)(ii), 4b(a)(iii), 4o(1) and 4n(4) of the Act and Commission Regulations 4.20, 4.21 and 4.22;
2. Billings and Billfund, Inc. shall be permanently prohibited from trading on or subject to the rules of any contract market, and all contract markets shall refuse Billings and Billfund, Inc. trading privileges, beginning on the third Monday after the date of this Order;
3. Billings and Billfund, Inc. shall liquidate all futures and options held by them or on their behalf, or in which they have any beneficial interest, before commencement of the denial of their trading privileges;
4. Billings pay a contingent civil monetary penalty in the amount of up to $400,000, pursuant to a payment plan. Billings shall make an annual civil monetary penalty payment ("Annual CMP Payment") as directed by a monitor designated by the Commission (the "Monitor") on or before July 31 of each calendar year, starting in calendar year 2001 and continuing for ten years (or until the civil monetary penalty is paid in full, if that happens first).3 Billings shall make each such Annual CMP Payment by electronic funds transfer, or by U.S. postal money order, certified check, bank cashier's check, or bank money order, made payable to the Commodity Futures Trading Commission, and sent to Dennese Posey, Division of Trading and Markets, Commodity Futures Trading Commission, Three Lafayette Centre, 1155 21st Street, N.W., Washington, D.C. 20581, under cover of a letter that identifies Billings and the name and docket number of the proceeding; Billings shall simultaneously transmit a copy of the cover letter and the form of payment to the Monitor and to the Director, Division of Enforcement, Commodity Futures Trading Commission, 1155 21st Street, N.W., Washington, D.C. 20581. In accordance with Section 6(e)(2) of the Act, 7 U.S.C. § 9a(2) (1994), if Billings fails to pay the full amount of his Annual CMP Payment within fifteen (15) days of the due date, he shall be automatically prohibited from trading on all contract markets and, if he is registered with the Commission, such registration shall be automatically suspended until he shows to the satisfaction of the Commission that payment of the full amount of the Annual CMP Payment with interest thereon to the date of payment has been made.
The amount of Billings' Annual CMP Payment shall consist of a portion of (1) the adjusted gross income (as defined by the Internal Revenue Code) earned or received by Billings during the course of the preceding calendar year, plus (2) all other net cash receipts, net cash entitlements or net proceeds of non-cash assets received by Billings during the course of the preceding calendar year. The Annual CMP Payment will be determined as follows:
|Where Adjusted Gross Income Plus Net Cash Receipts Total:||Percent of Total to be Paid by Billings is:|
|Up to $50,000||0%|
|$50,000 - $100,000||30% of the amount above $50,000|
|Above $100,000||$15,000 (30% of the amount between $50,000 and $100,000) plus 40% of the amount above $100,000|
5. In the event that Billings does not make payments as directed in paragraph 4, supra, the Commission may bring a proceeding or an action to enforce compliance with this Order and at its option may seek payment of the unpaid Annual CMP payment(s) or immediate payment of the entire amount of the civil monetary penalty required by paragraph 4, supra. The only issue Billings may raise in defense of such enforcement action is whether Billings has made the Annual CMP Payment(s) as directed by the Monitor. Any action or proceeding brought by the Commission compelling payment of the Annual CMP Payments, due and owing pursuant to paragraph 4, above, or any portion thereof, or any acceptance by the Commission of partial payment of the Annual CMP Payments made by Billings, shall not be deemed a waiver of Billings' obligation to make further payments pursuant to the payment plan, or a waiver of the Commission's right to seek to compel payments of the remaining balance of the civil monetary penalty assessed against Billings.
6. The Commission notes that an order requiring immediate payment of the civil monetary penalty against Billings would be appropriate in this case, but does not impose it based upon Billings' financial condition. Billings acknowledges that the Commission's acceptance of the Offer is conditioned upon the accuracy and completeness of the sworn Financial Statement and other evidence Billings has provided regarding his financial condition. Billings consents that if at any time following the entry of this Order, the Division of Enforcement ("Division") of the Commission obtains information indicating that Billings' representations concerning his financial condition were fraudulent, misleading, inaccurate or incomplete in any material respect at the time they were made, the Division of Enforcement may, at any time following the entry of this Order, petition the Commission to: (1) reopen this matter to consider whether Billings provided accurate and complete financial information at the time such representations were made; (2) require immediate payment of the full amount of the civil monetary penalty required by paragraph 4 above; and (3) seek any additional remedies that the Commission would be authorized to impose in this proceeding if Billings' Offer had not been accepted. No other issues shall be considered in connection with this petition other than whether the financial information provided by Billings was fraudulent, misleading, inaccurate or incomplete in any material respect, and whether any additional remedies should be imposed. Billings may not, by way of defense to any such petition, contest the validity of, or the findings in, this Order, assert that payment of a civil monetary penalty should not be ordered, or contest the amount of the civil monetary penalty to be paid. If in such proceeding, the Division petitions for, and the Commission orders, payment of less than the full amount of the civil monetary penalty, such petition shall not be deemed a waiver of Billings' obligation to pay the remaining balance of the civil monetary penalty assessed against him, pursuant to the payment plan; and
6. Billings and Billfund, Inc. shall comply with the following undertakings, as set forth in the Offer:
A. Billings shall provide his sworn financial statement to the Monitor 4 on June 30 and December 31 of each calendar year, starting December 31, 2000, and continuing through and including June 30, 2010. The financial statement shall provide:
i. a true and complete itemization of all of Billings' rights, title and interest in (or claimed in) any asset, wherever, however and by whomever held;
ii. an itemization, description and explanation of all transfers of assets with a value of $1,000 or more made by or on behalf of Billings over the preceding six-month interval; and
iii. a detailed description of the source and amount of all of Billings' income or earnings, however generated.
Billings shall also provide the Monitor with complete copies of his signed federal income tax return, including all schedules and attachments thereto (e.g., IRS Forms W-2) and Forms 1099, as well as any filings he is required to submit to any state tax or revenue authority, on or before June 30 of each calendar year, or as soon thereafter, beginning in 2001 and ending in 2010. If Billings moves his residence at any time, he shall provide written notice of his new address to the Monitor and the Commission within ten (10) days thereof.
B. Billings shall cooperate fully and expeditiously with the Monitor and the Commission in carrying out all aspects of his Annual CMP Payment. He shall cooperate fully with the Monitor and the Commission in explaining his financial income and earnings, status of assets, financial statements, asset transfers, tax returns, and shall provide any information concerning himself as may be required by the Commission. Furthermore, Billings shall provide such additional information and documents with respect thereto as may be requested by the Monitor or the Commission.
C. Billings and Billfund, Inc. shall not transfer or cause others to transfer funds or other property to the custody, possession, or control of any member of Billings' family or any other person for the purpose of concealing such funds or property from the Monitor or the Commission.
D. Billings and Billfund, Inc. shall never apply for registration or seek exemption from registration with the Commission in any capacity, and shall never engage in any activity requiring such registration or exemption from registration, or act as a principal, agent, officer or employee of any person registered, exempted from registration or required to be registered with the Commission, beginning on the date of the Order; this includes, but is not limited to, soliciting, accepting or receiving any funds, revenue, or other property from any person, giving advice for compensation, or soliciting prospective customers, related to the purchase or sale of any commodity futures or options on commodity futures contracts;
E. Billings and Billfund, Inc. shall not, beginning on the date of the Order:
1. directly or indirectly act as a principal, partner, officer, or branch office manager of any entity registered or required to be registered with the Commission; and
2. directly or indirectly act in any supervisory capacity over anyone registered or required to be registered with the Commission; and
F. Neither Billings or Billfund, Inc., nor any of their agents or employees under their authority or control, shall take any action or make any public statements denying, directly or indirectly, any finding in this Order, or creating, or tending to create, the impression that this Order is without a factual basis; provided, however, that nothing in this provision shall affect Billings and Billfund Inc.'s (i) testimonial obligations; or (ii) right to take legal positions in other proceedings to which the Commission is not a party.
The provisions of this Order shall be effective on this date.
|By the Commission.|
|Dated: July 17, 2000||______________________|
|Jean A. Webb|
|Secretary to the Commission|
Commodity Futures Trading Commission
1 In 1988, Billings formed Billfund, Inc. to be a CPO for Billfund, LP.
2 Billings failed to repay these personal loans and the certificates of deposit were all seized as collateral by the banks. Neither Billings nor the pools he operated had the money to repay investors.
3 Billings ten year cmp period shall run from January 1, 2000 through December 31, 2009. Annual CMP payments for a calendar year shall take place by July 31 of the following year. Therefore, the final Annual CMP payment for the year 2009 will occur on or before July 31, 2010.
4 Billings agrees that the National Futures Association is hereby designated as the Monitor for a period of eleven years commencing from January 1, 2000. Notice to the Monitor shall be made to Daniel A. Driscoll, Esq., Executive Vice President, Compliance, or his successor, at the following address: National Futures Association, 200 West Madison Street, Chicago, IL 60606. For ten years, based on the information contained in Billings' sworn financial statements, tax returns and the other financial statements and records provided to the Monitor, the Monitor shall calculate the total amount of the civil monetary penalty to be paid by Billings for the year. On or before June 30 of each year and starting in calendar year 2001, the Monitor shall also send written notice to Billings with instructions to pay by no later than July 31 of that year the amount of the civil monetary penalty pursuant to the payment instructions provided in paragraph four.