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UNITED STATES SECURITIES
AND EXCHANGE COMMISSION
LITIGATION RELEASE
NO. 15455/August 21, 1997
SECURITIES AND
EXCHANGE COMMISSION v. Richard Warren & Associates,
Inc., et. al., Civil Action No. C-97-3050MMC (USDC
ND CA/San Francisco Div.)
The Commission
announced today that on August 19, 1997, Judge
William A. Ingram granted a temporary restraining
order against Richard Warren & Associates,
Inc. (RWA) and Richard E. Warren (Warren), formerly
located in Fremont, California and now located
in London, United Kingdom. The Order also granted
a freeze of their assets, appointment of a receiver,
an accounting and repatriation of assets. The
Commission's complaint alleged that between February
and October 1996, RWA and Warren raised a total
of approximately $8 million from at least 48 investors
nationwide through two fraudulent offerings of
securities. In the first offering, RWA and Warren
represented that investor proceeds would be used
to trade "Prime Bank Debenture instruments"
and would generate a return of 15 percent within
30 days or 180 percent annually. In the second
offering, RWA and Warren represented that investor
proceeds would be deposited in an escrow account
for trading debentures, would generate a return
of approximately 1,600 percent within 66 days,
and would not be released from the escrow account
unless RWA provided a "Major World Bank Guarantee"
for the funds. The statements made to investors
were false. RWA and Warren misrepresented, among
other things, the existence of prime bank securities,
the use of the escrow account, rates of return
investors were to receive, the use of investor
proceeds and the risks associated with the investment.
Warren used in excess of $2 million for payments
to salesman and for personal use and used approximately
$1.2 million to make false "profit"
payments to investors. The remaining funds were
diverted to other entities and were apparently
not used to buy or sell debentures, as represented.
In the temporary
restraining order, Judge Ingram also ordered the
named relief defendant, Citadel Enterprises, Ltd.
(Citadel), to freeze and repatriate assets derived
from Warren's fraud. Citadel, an Isle of Man entity
headquartered in London, United Kingdom, received
more than $2 million of investor proceeds from
Warren. The Commission was informed that Citadel
planned to transfer $700,000 to Warren on or after
August 19, 1997. The Commission requested the
emergency action to prevent Warren, RWA and Citadel
from transferring or liquidating any funds.
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