SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
Litigation Release No. 15787 / June 19, 1998
SEC v. Albert E. Carter, Kelly Polatis and Eunice Polatis, Civil Action
No. 2:98CV 0440B, (USDC D.Ut.)(June 18, 1998)
On June 18, 1998, a civil complaint was filed against Albert E.
Carter,
Kelly Polatis and Eunice Polatis alleging the defendants have, since
at
least March 1997, been perpetrating a securities fraud by selling over
$3.5
million of nineteenth century state and railroad bonds, which have
only
nominal value as collectibles, to investors as investment vehicles
capable
of generating extraordinary returns to those investors. The bonds
being
sold by the defendants were issued by the Chicago, Saginaw & Canada
Railway
Co. in 1873, the East Alabama & Cincinnati Railway Co.in 1870 and by
the
State of Mississippi in 1838. The defendants have represented among
other
things that the bonds are redeemable in gold and are guaranteed by the
United States government; Carter has also represented that the East
Alabama
bonds are guaranteed by the State of Alabama. It is also alleged that
Carter has sold interests in an offshore investment program into which
he
claims the nineteenth century bonds can be placed, generating annual
returns of 100% to 500%.
The complaint alleges that the defendants violated 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 part of the complaint, the
Commission
seeks, among other relief: a preliminary injunction; a freeze of the
defendants assets; a freeze of the assets of Valice Ltd. LLC, Duro
SNIPPETS:
SECURITIES AND EXCHANGE COMMISSION
SEC v. Albert E. Carter, Kelly Polatis and Eunice Polatis, Civil Action
On June 18, 1998, a civil complaint was filed against Albert E. Carter, Kelly Polatis and
million of nineteenth century state and railroad bonds, which have only nominal value as
The bonds being sold by the defendants were issued by the Chicago,
the East Alabama & Cincinnati Railway Co.in 1870 and by the State of Mississippi in 1838.
The defendants have represented among other things that the bonds are redeemable in gold and
It is also alleged that Carter has sold interests in an offshore investment program into
The complaint alleges that the defendants violated Section 17of the Securities Act of 1933
As part of the complaint, the Commission seeks, among other relief: a preliminary injunction;
L.C. and Iron Horse One, Inc., three relief defendants who received proceeds of sales by the
Also on June 18, 1998, the Honorable Dee V. Benson, United States District
Judge, issued an order freezing the assets of Carter, Kelly Polatis, Eunice
Polatis and the three relief defendants.
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