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SEC LITIGATION RELEASE
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EXTRACTED KEY WORDS
MID-AMERICA INVESTORS SECURITIES FUNDS EXCHANGE COMMISSION DISTRICT CGA PAY DISGORGEMENT UNITED STATES ARIZONA CIVIL JUDGE DEFENDANTS ACT PLUS PREJUDGMENT EXPENSES AIRCRAFT CHARTERS GAMBLING DEBTS PERSONAL RESIDENCES RANCH CHILD SUPPORT ORDER PERMANENTLY ENJOINS FUTURE VIOLATIONS THEREUNDER DIRECTS DILLIE CIVIL PENALTY MAFG AMOUNTS COURT |
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
LITIGATION RELEASE NO. 17556 / June 11, 2002
(U.S.D.C., District of Arizona, Phoenix Division, Civil Action No.
CV-01-2493-PHX-JAT)
The Securities and Exchange Commission announced that on June 7, 2002,
Judge James A. Teilborg, United States District Judge for the District
of Arizona, granted the Commission's request for a judgment by default
against defendants Robert R. Dillie ("Dillie") and Mid-America
Foundation, Inc. (Mid-America) and relief defendant Mid- America
Financial Group ("MAFG"). The Commission's Complaint accused Dillie
and Mid-America of fleecing hundreds of mostly elderly investors out
of an estimated $54 million, since 1997, from the sale of Charitable
Gift Annuities (CGA). Dillie and Mid-America claimed, among other
things that the CGA investment scheme offered a safe, steady income,
tax benefits, and a means to effect charitable donations; and that a
CGA was fully backed by funds invested in stocks, bonds, money market
funds, and federal obligations. Rather than investing the funds as
promised, Dillie misappropriated the investors' funds and used the
proceeds to pay personal, and often extravagant, expenses, including
aircraft charters, gambling debts, personal residences, a ranch and
child support.
The Court's order permanently enjoins Dillie and Mid-America from
future violations of 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, and directs Dillie and Mid-America to pay disgorgement,
plus prejudgment interest, and a civil penalty and MAFG to pay
disgorgement, plus prejudgment interest, in amounts to be determined
at a later date upon the Commission's application to the Court.
_________________________________________________________________
Modified 06/11/2002
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