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SEC LITIGATION RELEASE
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EXTRACTED KEY WORDS
ATMS SECURITIES DEFENDANTS COMMISSION CASH SYSTEMS EXCHANGE COMPLAINT ACT ROBERT STRUTH VIOLATIONS REGISTRATION PROVISIONS WEG ALLEGES MONTHLY LEASE PAYMENTS WESTERN EXECUTIVE GROUP RIETZ PARRISH STEPHEN EDGEL SALE CALIFORNIA OFFERING RENO NEVADA COURT DISTRICT PRIVATE OPERATING MONEY |
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U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 15106 / October 3, 1996
SECURITIES AND EXCHANGE COMMISSION v. WESTERN EXECUTIVE GROUP,
INC., CASH SYSTEMS USA, INC., CHARLES R. RIETZ, ROBERT R.
PARRISH, ROBERT J. STRUTH and R. STEPHEN EDGEL,
Civil Action No. 96-6938 GHK (JGx) (C.D. Cal.)
The Securities and Exchange Commission ("Commission")
announced that on October 2, 1996, it filed an emergency lawsuit
to halt the defendants' sale of investment contracts for the sale
and leaseback of automated teller machines ("ATMs"). The
defendants offer the ATM investment program over the Internet to
the public and have raised over $3.49 million from at least 132
investors nationwide. This is the first lawsuit involving ATMs
brought by the Commission.
The Commission has requested an order temporarily enjoining
the following entities and individuals from future violations of
the antifraud and registration provisions of the federal
securities laws: Western Executive Group, Inc. ("WEG")
headquartered in Reno, Nevada; Cash Systems USA, Inc. ("Cash
Systems") headquartered in Reno, Nevada; Charles R. Rietz
("Rietz") of Mesa, Arizona; Robert R. Parrish ("Parrish") of
Gilmer, Texas; Robert J. Struth ("Struth") of Southern
California; and R. Stephen Edgel ("Edgel") of Carmichael,
California. The Commission has also asked the Court to impose an
asset freeze against WEG and Cash Systems and appoint a temporary
receiver over WEG and Cash Systems. A hearing is scheduled for
Monday, October 7, 1996.
In its Complaint, filed in the United States District Court
for the Central District of California, the Commission alleges
that from at least September 1995, the defendants began offering
and selling investments involving the sale and leaseback of
privately owned ATMs (ATMs not affiliated with banks). Through
simultaneously executed agreements with both WEG and Cash
Systems, investors purchased ATMs from WEG for $23,950 and
immediately leased them back to Cash Systems. Investors were
guaranteed monthly lease payments for five years which payments
would allegedly return all of the investors' principal and a
yield of 17.4% per year. However, as of July 1996, only 42 ATMs
were operational even though the defendants had sold 195 ATMs,
and only 2 of the 42 ATMs made enough money to cover their
associated monthly lease payments and expenses. Consequently,
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