 UNITED
STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
LITIGATION RELEASE NO. 16897 / February 14, 2001
UNITED
STATES OF AMERICA v. EDWARD J. PARADIS, JR. AND
WALTER R. SNYDER, JR. (Criminal No. 4:01-CR-40006-NMG
(USDC., D.MA))
TWO
ARRESTED IN $600,000 PRIME BANK SCHEME
On
February 8, 2001, Edward J. Paradis, Jr., of Sturbridge,
Massachusetts, and Walter R. Snyder, Jr., of Southbridge,
Massachusetts, were arrested on charges of mail
fraud, wire fraud and conspiracy in connection
with a prime bank scheme conducted between January
1995 and March 1998 in which they raised more
than $600,000 from four individuals. The arrests
followed the unsealing of an indictment against
Paradis and Snyder that was returned by a federal
grand jury in the District Court for the District
of Massachusetts on February 1, 2001.
According
to the indictment, Paradis and Snyder falsely
told the individuals that they could obtain funding
for business projects by acquiring letters of
credit from international "prime banks."
Paradis and Snyder falsely represented that the
business funding could be obtained only if the
individuals made substantial up-front payments
to Snyder and Paradis. According to the indictment,
the individuals were told that these payments
-- which ranged as high as $200,000 -- were to
pay fees charged by the "prime banks"
issuing the letters of credit. The individuals
were assured that the payments would be maintained
in escrow accounts administered by Snyder, who
was a licensed attorney in Massachusetts, and
refunded if the promised financing did not materialize
within seven to thirty days. Contrary to these
assurances, the funds were withdrawn from the
escrow accounts shortly after being deposited.
Paradis and Snyder used the funds for their own
benefit and that of their relatives, and to pay
for items such as rent, clothing, gas and a hairdressing
salon.
In
an earlier, related proceeding, the Securities
and Exchange Commission filed a civil enforcement
action against Paradis and Snyder on April 13,
1998 alleging that they violated the antifraud
provisions of the federal securities laws in connection
with the scheme described above. On March 11,
1999 and June 22, 1999, the United States District
Court for the District of Massachusetts entered
final judgments against Snyder and Paradis permanently
enjoining them from violating Section 17(a) of
the Securities Act of 1933 and Section 10(b) of
the Securities and Exchange Act of 1934 and Rule
10b-5 thereunder, requiring them to disgorge their
ill-gotten gains and imposing monetary penalties.
In addition, Snyder was disbarred by the Massachusetts
Board of Bar Overseers of the Supreme Judicial
Court on March 25, 1999.
For
further information, please see Litigation Release
Numbers 16201 (June 30, 1999), 15732 (May 6, 1998)
and 15706 (April 14, 1998).
from:
http://www.sec.gov/litigation/litreleases/lr16897.htm
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