U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 17451 / April 2, 2002
U.S. v. Ernest Frank Cossey, Case No. 02-CR-0795J (S.D. Cal.); U.S. v.
Gary Williams, Case No. 02-CR-0285J (S.D. Cal.)
The U.S. Attorney for the Southern District of California announced
that the President and Chief Financial Officer of TLC Investments &
Trade Co. and related entities pleaded guilty to criminal charges
brought in connection with a multimillion dollar offering fraud
perpetrated nationwide.
Ernest F. Cossey, President, and Gary Williams, CFO of the TLC
entities pleaded guilty on March 22, 2002 and February 14, 2002,
respectively. Cossey pleaded guilty to one count of conspiracy to
commit mail fraud and one count of filing a false tax return. Williams
pleaded guilty to one count of preparing a false tax return for
Cossey. Cossey faces a possible sentence of 57 to 71 months in prison
and Williams faces a possible sentence of 18 to 24 months in prison.
Cossey and Williams are scheduled to be sentenced in July 2002.
In October 2000, the Securities and Exchange Commission filed an
emergency action against Cossey, Williams and several other
defendants, alleging that they violated the registration and antifraud
provisions of the securities laws. The Commission's complaint alleged
that since 1998, the defendants committed securities fraud by
perpetrating a real estate Ponzi scheme. The TLC entities raised over
$150 million from more than 1,800 investors, most of whom are senior
citizens. The TLC entities promised investors a safe, liquid
investment that would pay guaranteed returns of 8 to 15%. Instead,
Cossey and Williams misused at least $28.3 million of investor funds
to pay other investors, invest in a prime bank scheme, buy racehorses,
make charitable contributions and wire funds overseas.
Cossey and Williams settled the Commission's action by consenting to
the entry of permanent injunctions prohibiting future violations of
the antifraud provisions. Cossey also consented to the entry of an
injunction prohibiting future violations of the securities
registration provisions. The judgments require Cossey to pay
$10,690,697 in disgorgement, $271, 921.53 in prejudgment interest and
$110,000 in civil penalties and require Williams to pay $248,145 in
disgorgement.
Prior Litigation Releases dealing with this case , , , , and .
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Modified 04/02/2002
SNIPPETS:
U.S. v. Ernest Frank Cossey,
U.S. v. Gary Williams,
The U.S. Attorney for the Southern District of California announced that the President and
Cossey pleaded guilty to one count of conspiracy to commit mail fraud and one count of filing
Cossey faces a possible sentence of 57 to 71 months in prison and Williams faces a possible
In October 2000, the Securities and Exchange Commission filed an emergency action against
The Commission's complaint alleged that since 1998, the defendants committed securities fraud
The TLC entities raised over $150 million from more than 1,800 investors, most of whom are
The TLC entities promised investors a safe, liquid investment that would pay guaranteed
Instead, Cossey and Williams misused at least $28.3 million of investor funds to pay other
Cossey and Williams settled the Commission's action by consenting to the entry of permanent
The judgments require Cossey to pay $10,690,697 in disgorgement, $271, 921.53 in prejudgment
Prior Litigation Releases dealing with this case,,,, and.
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