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SEC LITIGATION RELEASE
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EXTRACTED KEY WORDS
COMMISSION WACO JUDGE SMITH FUNDS SEEKING UNITED STATES WHITE MARINE RECREATION DISTRICT ACCOUNTING STOCK COMPLAINT ALLEGES PERMANENT INJUNCTIVE RELIEF FRAUDULENT ACTIVITIES DIVIDEND PAYMENT PONZI SCHEME SMITH REPATRIATION FOREIGN ACCOUNTS DISGORGEMENT ILL-GOTTEN GAINS PREJUDGMENT CIVIL MONETARY PENALTIES MONIES KENNETH URSERY SON-IN-LAW LOURDES SMITH EX-WIFE |
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
LITIGATION RELEASE NO. 16364 / November 18, 1999
SEC v. Great White Marine & Recreation, Inc.
W-99-CA-230, USDC, WD/TX (Waco Division)
On November 16, 1999, Judge Walter R. Smith of the United States
District Court for the Western District of Texas in Waco ordered A.
Colin Smith, of Waco, jailed for contempt. Judge Smith ordered Mr.
Smith incarcerated until (1) he provides the accounting of funds that
Judge Smith had ordered previously and that is to detail, among other
things, all funds received from investors or sales of stock and
disbursed by Mr. Smith and the company, or (2) he posts a $100,000
bond.
In its Complaint, the Commission alleges that Great White Marine and
Recreation, Inc., a Waco-based corporation once controlled by Mr.
Smith, offered and sold unregistered shares of its stock through false
statements in press releases, in promotional brochures, in internet
website postings and in a Form 10-SB filed with the Commission. The
Complaint alleges that Great White and Mr. Smith raised at least
$10.8 million through their fraudulent activities, that Mr. Smith
diverted at least $3.5 million to his own uses and that Great White
made a $1 million "dividend payment as part of a "Ponzi" scheme.
The Commission is seeking permanent injunctive relief against Great
White, and preliminary and permanent injunctive relief against Mr.
Smith. Additionally, the Commission is seeking from Great White and
Mr. Smith repatriation of funds from foreign accounts, disgorgement of
ill-gotten gains (with prejudgment interest) and statutory civil
monetary penalties. The Commission is also seeking the return of
monies from Kenneth Ursery, Mr. Smith's son-in-law, and from Lourdes
Smith, his ex-wife.
_________________________________________________________________
Modified 11/19/1999
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