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LITIGATION
RELEASE NO. 17007 / May 16, 2001
SECURITIES
AND EXCHANGE COMMISSION V. PAUL SHINGLEDECKER
(United States District Court for the Western
District of Michigan, 5:01-CV-283)
The
Commission announced today the filing and simultaneous
settlement of a civil fraud action in the United
States District Court for the Western District
of Michigan against Paul Shingeldecker of Marcellus,
Michigan for his participation in a widespread
fraudulent "prime bank" scheme known
as The Gateway Association. The Commission's complaint
alleges that from approximately November 1997
and continuing through about December 1998, Shingeldecker
solicited investors to invest in an alleged overseas
bank debenture trading program involving medium-term
bank debentures. Shingledecker participated in
several meetings in the Michigan area, and at
least one meeting in the Minnesota area, where
he described to investors a 1,250% rate of return
on a ten-month investment. Shingledecker detailed
a payout schedule promising a ten percent compounded
monthly return on a $100,000 investment, with
a $759,768 balloon payment at the end of the ten
months. Shingledecker directed investors to either
send their checks to the Gateway office or to
wire their funds directly to one of several bank
accounts. Shingledecker offered and sold these
non-existent securities to at least eleven investors
and raised over $500,000 for Gateway. Shingledecker,
through his insurance company, received approximately
$140,000 in funds from Gateway.
Without
admitting or denying the allegations in the complaint,
Shingledecker consented to the entry of an Order
that: (1) enjoins him from violating Sections
5(a), 5(c) and 17(a) of the Securities Act of
1933, Section 10(b) of the Securities Exchange
Act of 1934 and Rule 10b-5 thereunder; (2) orders
him to pay disgorgement in the amount of $140,000
plus prejudgment interest of $25,148.86; and (3)
waives disgorgement in excess of $25,000 and does
not impose a civil penalty based upon Shingledecker's
sworn statements demonstrating his inability to
pay.
http://www.sec.gov/litigation/litreleases/lr17007.htm
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