SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 16950 / April 3, 2001
SEC V. STEVEN E. THORN, CRAIG A. MORGAN, KAREN A. ESTRADA, GLOBAL
INVESTORS GROUP, LLC, FIRST FINANCIAL VENTURES, LLC, SECOND FINANCIAL
VENTURES, LLC, THIRD FINANCIAL VENTURES, LLC, FUND GLOBAL, LLC, AND
GLOBAL EQUITY GROUP, LLC, U.S. District Court for the Southern
District of Ohio, Civil Action No. C2-01-290 (S.D. Ohio)
The Commission announced today that on April 2, 2001, Judge Algenon L.
Marbley of the United States District Court for the Southern District
of Ohio entered a temporary restraining order against Steven E. Thorn
(Thorn), a resident of Cleveland, Ohio, Karen A. Estrada (Estrada), a
resident of Atascadero, California, and their related entities for
raising approximately $64.5 million in a fraudulent prime bank scheme.
The judge also ordered that their assets be frozen and that defendants
account for the funds raised.
The Commission's Complaint alleges that since February 1998, Thorn and
Estrada have raised at least $10.5 million by selling investments in
purported European bank trading programs through three entities they
controlled, Global Investors Group, LLC, Fund Global, LLC and Global
Equity Group, LLC (the Global Trading Programs). The Complaint further
alleges that since November 1999, Thorn, Estrada, Craig A. Morgan
("Morgan") and others raised at least $54 million through three
different entities, First Financial Ventures, LLC, Second Financial
Ventures, LLC, and Third Financial Ventures, LLC (Financial Ventures
Programs) and had investors deposit funds for the scheme at Bank One
in Columbus, Ohio.
In both programs, Thorn and Estrada allegedly made false claims that
the money they raised would be used as collateral for the purchase of
prime bank instruments issued by European financial institutions.
Numerous government agencies, including the Commission, the Federal
Deposit Insurance Corporation and the Board of Governors of the
Federal Reserve System, however, have warned the public that trading
programs in prime bank instruments do not exist and are fraudulent.
The Complaint further alleges that Thorn and Estrada misrepresented to
investors in the Global Trading Programs that their principal was
never at risk and promised rates of return ranging from 7% to 100% per
month. The Complaint alleges that of the total amount raised in the
Global Trading Programs, at most only $3.8 million could have been
used for any legitimate investment purposes, and $1.5 million was used
to pay for Thorn's personal expenses.
The Commission also alleges that the Financial Ventures Programs
differed from the early schemes only in that Thorn and Estrada told
SNIPPETS:
SECURITIES AND EXCHANGE COMMISSION
GLOBAL EQUITY GROUP, LLC, U.S. District Court for the Southern District of Ohio, Civil Action
The Commission announced today that on April 2, 2001, Judge Algenon L. Marbley of the United
The judge also ordered that their assets be frozen and that defendants account for the funds
The Commission's Complaint alleges that since February 1998, Thorn and Estrada have raised at
The Complaint further alleges that since November 1999, Thorn, Estrada, Craig A. Morgan and
Thorn and Estrada allegedly made false claims that the money they raised would be used as
Numerous government agencies, including the Commission, the Federal Deposit Insurance
The Complaint further alleges that Thorn and Estrada misrepresented to investors in the
The Commission also alleges that the Financial Ventures Programs differed from the early
The Court granted the Commission's emergency motion and temporarily enjoined Thorn, Estrada
thereunder; froze the assets of Thorn, Estrada and the defendant entities; and ordered other
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