SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 17118 / September 6, 2001
Accounting and Auditing Enforcement Release No. 1440 / September 6,
2001
SECURITIES AND EXCHANGE COMMISSION v. M & A WEST, INC.; SCOTT L.
KELLY; SALVATORE CENSOPRANO; ZAHRA R. GILAK; FRANK THOMAS ECK, III;
and STANLEY R. MEDLEY, United States District Court for the Northern
District of California, Civil Action No. C-01-3376 (CRB)
S.E.C. CHARGES BAY AREA "INTERNET INCUBATOR" WITH FRAUD AND
REGISTRATION VIOLATIONS
The United States Securities and Exchange Commission ("Commission")
announced today that it has sued M & A West, Inc. ("MAWI" or the
"Company"), a self-proclaimed "Internet incubator" engaged in
developing Internet-related technology companies. According to the
Commission, since 1999 MAWI and various persons affiliated with the
Company have reaped more than $20 million in illegal profits by
selling unregistered securities to investors, in violation of the
registration provisions of the federal securities laws. These persons
funneled millions of dollars through various secret accounts back to
MAWI, which fraudulently reported the funds as revenue from operations
which did not in fact exist. MAWI was based in San Bruno, California
throughout the course of the scheme, and has recently relocated to
Liberty, Texas.
Also named in the Commission's complaint, filed in the Northern
District of California, are
* Scott L. Kelly of Chandler, Arizona (until recently of
Hillsborough, California), MAWI's former President and Chief
Executive Officer;
* Zahra R. Gilak and Frank Thomas Eck III of Napa, California, who
served as MAWI's corporate secretary and outside counsel,
respectively;
* Salvatore Censoprano of Foster City, California, MAWI's former
Chief Financial Officer; and
* Stanley R. Medley of Los Angeles, California, an Eck associate who
assisted in the transactions.
According to the complaint, during 1999 and 2000 Kelly, Gilak, Eck and
Medley arranged a series of so-called reverse mergers between various
MAWI operating divisions or related companies and publicly-traded
shell companies with no operations. The mergers resulted in the
formation of four publicly-traded companies - MAWI, VirtualLender.com
(later renamed VLDC Technologies), Workfire.com, and Digital Bridge -
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SECURITIES AND EXCHANGE COMMISSION
Accounting and Auditing Enforcement Release No. 1440 / September 6,
and STANLEY R. MEDLEY, United States District Court for the Northern District of California,
The United States Securities and Exchange Commission announced today that it has sued M & A
According to the Commission, since 1999 MAWI and various persons affiliated with the Company
These persons funneled millions of dollars through various secret accounts back to MAWI,
MAWI was based in San Bruno, California throughout the course of the scheme, and has recently
Also named in the Commission's complaint, filed in the Northern District of California, are *
* Zahra R. Gilak and Frank Thomas Eck III of Napa, California, who served as MAWI's corporate
According to the complaint, during 1999 and 2000 Kelly, Gilak, Eck and Medley arranged a
The mergers resulted in the formation of four publicly-traded companies - MAWI,
Despite this, following each merger MAWI hyped the newly-formed public companies with a
The complaint further alleges that Kelly and Censoprano fabricated contracts and other
MAWI's fiscal 2000 financials described another $1 million in proceeds from unregistered
the complaint charges that Kelly and Censoprano fraudulently inflated the value of the
MAWI, Kelly and Censoprano violated, and Gilak and Eck aided and abetted violations of, the
MAWI violated, and Kelly, Censoprano, Gilak and Eck aided and abetted violations of, the
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