 UNITED
STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
Litigation Release No. 17121 / September 7, 2001
SECURITIES
AND EXCHANGE COMMISSION v. TRI-WEST INVESTMENT
CLUB, ALYN RICHARD WAAGE, AND HAARLEM UNIVERSAL
CORPORATION, United States District Court for
the Northern District of California, Civil Action
No. C-01-3386
S.E.C.
CHARGES TRI-WEST INVESTMENT CLUB WITH RUNNING
FRAUDULENT INTERNET-BASED PRIME BANK SCHEME
The
United States Securities and Exchange Commission
("Commission") announced today that
it has filed a securities fraud lawsuit in connection
with a scam that has raised at least $30 million
by offering phony "Prime Bank" investments
over the Internet. The Commission charges that
the scheme victimized hundreds (and possibly thousands)
of investors nationwide, including the San Francisco
Bay Area.
According
to documents filed by the Commission in the federal
court for the Northern District of California,
Tri-West Investment Club ("Tri-West")
and Alyn Waage, a Canadian citizen residing in
Puerta Vallarta, Mexico, may have raised more
than $30 million from investors in the U.S. and
abroad. The Commission's complaint alleges that
Tri-West, through its website, solicits a minimum
$1,000 investment in a "bank debenture trading
program" secured by "certain key International
`Prime Banks.'" Tri-West claims to guarantee
a 120% annual rate of return with no risk to investors.
In fact, according to the Commission, the securities
offered by Tri-West are entirely fictitious; "bank
debenture trading programs" and other purported
"Prime Bank" instruments do not exist.
Tri-West's
website further claims that the "bank debenture
trading program" is managed by Haarlem Universal
Corporation, purportedly "one of the largest
and most prestigious trading companies in the
world" with a thirty year history of generating
high returns for investors. According to the Commission,
however, Haarlem is not a registered investment
company, and has been in existence only since
the scheme began in 1999.
Documents
submitted to the court by the Commission show
that Mexican authorities recently arrested Waage
for entering Mexico with a suitcase containing
$4.5 million in undeclared cashiers checks made
payable to Haarlem.
The
Commission's complaint charges that Tri-West and
Waage violated the antifraud provisions of the
federal securities laws, Section 17(a) of the
Securities Act of 1933 ("Securities Act"),
Section 10(b) of the Securities Exchange Act of
1934 ("Exchange Act") and Rule 10b-5
thereunder, as well as the federal registration
provisions, Sections 5(a) and 5(c) of the Securities
Act. The Commission seeks emergency relief, including
a court order freezing Tri-West's assets; the
Commission's lawsuit ultimately seeks the return
of all investor funds as well as penalties and
other relief from Tri-West and Waage. The complaint
also names Haarlem as a relief defendant.
In
a separate matter, the Office of the United States
Attorney for the Eastern District of California
has filed criminal charges against certain persons
for their roles in the Tri-West investment scheme.
The
Commission acknowledges the assistance of various
state and federal authorities in its investigation,
including the North American Securities Administrators
Association and securities regulators in West
Virginia and Washington, as well as Canadian law
enforcement authorities.
For
more information about Internet fraud, visit
http://www.sec.gov/divisions/enforce/internetenforce.htm.
For more information about prime bank frauds,
visit the SEC's website at http://www.sec.gov/divisions/enforce/primebank.shtml.
To report suspicious activity involving possible
Internet fraud, visit
http://www.sec.gov/complaint.shtml.
from:
http://www.sec.gov/litigation/litreleases/lr17121.htm
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