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SEC LITIGATION RELEASE
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EXTRACTED KEY WORDS
DEFENDANTS BRINKER BENTZ INVESTORS WELLINGTON BANK COMPLAINT COMMISSION EXCHANGE RELIEF DEFENDANTS ALLEGES SECURITIES EXCHANGE ACT INDIANA PERMANENTLY ENJOINS VIOLATION CASTLEROCK ENGAGING FRAUD SALES ACTING UNREGISTERED BROKERS DISTRICT AMOUNT SCHEME GRENADA TRADING PRIME BANK INSTRUMENTS GOVERNMENT |
SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 16915 / February 28, 2001
, Civil Action No. IP01-0259 C-H/G.
The U.S. Securities and Exchange Commission ("Commission") announced
today that a federal court in Indianapolis has entered an order
permanently enjoining Wellington Bank and Trust, Ltd ("Wellington
Bank"), John E. Brinker, Jr. ("Brinker"), Gary J. Bentz ("Bentz"), and
entities they control or with which they are associated, from engaging
in fraud, unregistered sales of securities, and acting as unregistered
brokers, in violation of federal securities laws. The order also
freezes the assets of the defendants and relief defendants. Finally,
the order appoints an examiner to determine how funds of allegedly
defrauded investors were distributed and spent. The Court will
determine later the amount of ill-gotten gains, if any, defendants and
relief defendants must disgorge and the amount of civil penalties, if
any, to be paid by defendants.
In its complaint, the Commission alleges that the defendants operated
a "Ponzi" scheme that raised approximately $7.1 million from over 200
investors in eleven states. Most investors are Indiana residents and
several are elderly. Specifically, the complaint alleges that from the
Cincinnati, Ohio offices of Castlerock Consulting, LLC ("Castlerock"),
Brinker and Bentz sold unregistered securities in an investment
program offered by Wellington Bank, which is based in the nation of
Grenada. According to the complaint, Brinker and Bentz represented to
investors that the program would generate annual returns of 50% or
more through trading in "prime bank" instruments. 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 of the $7.1 million they raised, Brinker and Bentz
diverted at least $5.4 million to themselves, entities they control,
and others with no relation to a legitimate investment purpose.
Besides Brinker, Bentz, Castlerock, and Wellington Bank, the
defendants are several U.S., Grenadan, and Bahamian corporate entities
that helped facilitate the scheme. The complaint also names as relief
defendants three companies associated with Brinker and Bentz, Alpha
Advantage II, Inc., Eleven Eighty-Five, LP and Steadfast Ministries,
Inc., that received investor money.
The defendants and relief defendants consented to the court's order
without admitting or denying the allegations in the complaint.
Specifically, the order (1) permanently enjoins all defendants from
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