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SECURITIES AND EXCHANGE
COMMISSION Washington, D.C.
Litigation Release
No. 15705 / April 14, 1998
Securities and
Exchange Commission v. George Wallace Stewart,
Patrick J. Madden, Allen B. Gottlieb, *
* *, Salim El
Hage, H.D. Inc., St. Barth Limited, Eastland
American Bank
Limited, Foreign Trade Bank International,
and Mecis Insurance and
Reinsurance Company, Civil Action No. 98
CIV 2636 (S.D.N.Y.)
The Securities
and Exchange Commission today filed a complaint
in federal court in Manhattan charging
five individuals and
five related entities with fraudulently
obtaining more than
$1.7 million, from at least three individuals,
through
offering and selling securities in the
form of participations
in investment programs purportedly to trade
"prime bank"
instruments. The complaint alleges that:
The defendants
claimed that they operated investment programs
that successfully
bought and traded financial instruments issued
by the
world's largest banks, described variously as
medium-term bank notes, stand-by letters of credit, and prime bank
guarantees. The trading was to result in
spectacular profits
for investorsÄreturns of ten to fifty times
their initial investments in two months to two yearsÄat no risk. The investment
programs were scams, the instruments themselves
bogus. Instead of using the money as promised,
the defendants
misappropriated the investors' funds for
their own benefit,
transferring portions of the money to at
least one individual
and three entities, who were named as relief
defendants.
Named as defendants
are:
George Wallace
Stewart, a 55 year old resident of Hollywood,
Florida.
Patrick J. Madden, a 48 year old resident
of Alberta, Canada.
Allen B. Gottlieb, a 54 year old New York
licensed attorney, who resides in
Fort Lauderdale, Florida.
* * *, who resides in Bohemia, New York.
Salim El Hage, whose last known residence
was Paris, France.
H.D. Inc., a New Jersey corporation.
St. Barth Limited, a Bahamian company.
Eastland American Bank Limited, a Bahamian company.
Foreign Trade Bank, a Lebanese company.
Mecis Insurance and Reinsurance Company,
a Lebanese company.
Named as relief
defendants are:
Cornel Plebani,
a New Jersey resident.
Law Offices of Allen B. Gottlieb and Associates,
P.C., a New York professional corporation.
Americredit Commercial Corporation.
Finanzurich LTD, a Bahamian company.
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The complaint
charges that the defendants, through their
respective roles in the investment schemes,
violated the
antifraud provisions of the federal securities
laws, Section
17(a) of the Securities Act of 1933 and
Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder.
As to
the defendants, the SEC seeks permanent prohibitory
injunctions, disgorgement of their ill-gotten
gains plus
prejudgment interest, and civil money penalties.
As to the
relief defendants, the SEC seeks return
of the investors'
funds that they received and prejudgment
interest thereon.
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