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SEC LITIGATION RELEASE
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EXTRACTED KEY WORDS
COMMISSION EXCHANGE COMMISSION INVESTMENT DEFENDANTS SIMS ROB NITE THOMAS DAVID SCHEME AGE VICTIMS ACT PHILIP CIVIL BANKS COMPLAINT PROMISES ALLEGES FUNDS FRAUD LAWSUIT RESIDES HILLS PROHIBITING FUTURE VIOLATIONS PROMULGATED THEREUNDER DISGORGEMENT GOTTEN GAINS PLUS PREJUDGMENT CIVIL PENALTIES |
U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 15472 / September 4, 1997
SECURITIES AND EXCHANGE COMMISSION v. ROB NITE; PHILIP L. THOMAS; and
DAVID
V. SIMS, Civil Action No. 97-6546 DDP(RZx) (C.D. Cal)
On September 3, 1997, the Securities and Exchange Commission
sued
three Southern California businessmen alleging that they conducted a
multi-
million dollar fraudulent investment scheme involving the fictional
trading
of securities purportedly issued by major international banks.
According
to the Commission's complaint filed in federal district court in Los
Angeles, from July 1994 through October 1994, the defendants, Rob Nite,
age
46, Philip L. Thomas, age 43, and David V. Sims, age 47, offered and
sold
to the public interests in a bogus program to trade these purported
securities, amassing approximately $3.7 million. For their investment,
the
victims were promised astronomical returns on relatively small
investments.
Specifically, the complaint alleges that the defendants guaranteed
the
victims that for an initial investment of either $50,000 or $150,000,
they
would receive returns of $1 million per week for 40 weeks, or $40
million.
Contrary to their promises, the defendants did not invest the
victims'
funds, but instead misappropriated most, if not all, of the funds for
their
own personal benefit, including donations to religious organizations,
purchases of luxury automobiles and gifts to family members.
The scheme allegedly perpetrated by the defendants is commonly
referred to as a "prime bank" scheme, and has been the subject of
official
warnings issued to investors by several federal agencies including
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