 UNITED
STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
LITIGATION RELEASE NO. 16902 / February 16, 2001
SECURITIES
AND EXCHANGE COMMISSION v. Advance Local Development
Corp., et. al., CV01-0897 (E.D. N.Y.)
The
Commission yesterday filed an action in federal
court and obtained an emergency asset freeze against
Advance Local Development (Advance) and three
of its officers for operating a prime bank fraud.
The complaint alleges that from February 1999
through April 2000 Advance raised $16.5 million
from investors by promising annualized rates of
return as high as 2,600 percent per year, with
no risk to capital. According to the complaint,
Advance represented that investor funds would
be placed into a federally approved "bank
to bank" trading program with Advance's share
of the profits used to promote humanitarian efforts.
The complaint alleged that investor funds were
never placed into a trading program, as no such
program exists. Instead, investor funds were used
to make undisclosed payments to the proposed defendants,
placed in a brokerage account where they financed
unsuccessful day trading activities, and for Ponzi
payments to investors.
Judge
John Gleeson in the United States District Court
for the Eastern District of New York ordered that
Advance's assets be frozen to protect funds for
the benefit of investors pending determination
of the matter on the merits. The complaint named
as defendants Advance and its officers, Edmund
Burton of Brooklyn, New York, and Thomas Wescott,
and Ralph Odom both of Las Vegas, Nevada. The
Commission alleged that Advance, Burton, Wescott,
and Odom violated Section 10(b) and Rule 10b-5
of the Securities Exchange Act of 1934 and Section
5(a), 5(c), and 17(a) of the Securities Act of
1933. In addition to the emergency relief granted
by the Court, the action seeks preliminary and
permanent injunctions, disgorgement plus prejudgment
interest, and civil penalties. The complaint also
seeks an accounting of investor funds and the
appointment of a special officer to preserve assets
and repay investors.
from:
http://www.sec.gov/litigation/litreleases/lr16902.htm
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