UNITED STATES SECURITIES AND EXCHANGE COMMISSION
LITIGATION RELEASE NO. 17533 / May 24, 2002
SECURITIES AND EXCHANGE COMMISSION v. INVERWORLD, INC., ET AL., Civil
Action No. SA 99 CA 0822-FB
UNITED STATES OF AMERICA v. JOSE ZOLLINO AND GEORGE FAHEY, Criminal
Action No. SA-01-CR-180
SAN ANTONIO MAN SENTENCED TO TWELVE YEARS FOR DEFRAUDING CLIENTS
The Securities and Exchange Commission announced that Jose Patricio
Zollino was sentenced to twelve years in federal prison for his role
in a scheme that victimized more than 1,200 investors out of at least
$325 million. Zollino, the former chairman of the board of InverWorld
Securities, Inc., a broker-dealer registered with the Commission, and
InverWorld, Inc., an investment adviser registered with the
Commission, entered formal pleas to conspiring to commit fraud and
conspiring to launder money.
On August 4, 1999, the SEC charged Zollino and others with losing as
much as $475 million of client funds in unauthorized, highly leveraged
securities investments and practically worthless securities issued by
foreign shell companies. The companies used by Zollino and others to
move client money offshore are in bankruptcy.
On March 22, 2001, Zollino was indicted by a San Antonio grand jury on
13 counts of conspiracy, fraud, and money laundering. Zollino's
indictment was based upon the same conduct alleged in the Commission's
complaint filed on August 4, 1999 that charged him with violating the
antifraud provisions of the Securities and Exchange Act of 1934 and
the Investment Advisers Act of 1940. The complaint sought preliminary
and permanent injunctions, disgorgement with prejudgment interest and
a civil money penalty against Zollino, as well as orders for an asset
freeze, an accounting, the prohibition of the movement, alteration and
destruction of books and records, the appointment of a receiver, and
expedited discovery. In the Commission's action, Judge Fred Biery,
United States District Court for the Western District of Texas, San
Antonio Division, issued Orders against Zollino Freezing Assets,
Requiring an Accounting, Directing the Repatriation of Funds,
Requiring Preservation of Documents and Authorizing Expedited
Discovery. The Court also appointed a receiver. The Commission's civil
enforcement action against the InverWorld entities was stayed pending
completion of the criminal case.
The criminal case was prosecuted by the U.S. Attorney's office for the
Western District of Texas (San Antonio Division). SEC attorneys
SNIPPETS:
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
The Securities and Exchange Commission announced that Jose Patricio Zollino was sentenced to
Zollino, the former chairman of the board of InverWorld Securities, Inc., a broker-dealer
On August 4, 1999, the SEC charged Zollino and others with losing as much as $475 million of
The companies used by Zollino and others to move client money offshore are in bankruptcy.
On March 22, 2001, Zollino was indicted by a San Antonio grand jury on 13 counts of
Zollino's indictment was based upon the same conduct alleged in the Commission's complaint
The complaint sought preliminary and permanent injunctions, disgorgement with prejudgment
Requiring Preservation of Documents and Authorizing Expedited
The Court also appointed a receiver.
The criminal case was prosecuted by the U.S. Attorney's office for the Western District of
SEC attorneys assisted the FBI, IRS, and U.S. Attorney's office in the investigation.
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