IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF GEORGIA
SECURITIES AND EXCHANGE COMMISSION,
Plaintiff,
:
v. :
: CIVIL ACTION FILE
WILLIAM P. SAUER :
: NO. _____________
JAMES M. JORDAN, and :
:
PHIL D. KERLEY,
Defendants.
COMPLAINT FOR INJUNCTIVE AND OTHER RELIEF
Plaintiff, Securities and Exchange Commission ("Commission"), files this complaint and
alleges that:
OVERVIEW
1. William P. Sauer ("Sauer"), James M. Jordan ("Jordan") and Phil D. Kerley ("Kerley"),
each fraudulently sold large amounts of the securities issued in connection with two
Ponzi schemes, ETS Payphones, Inc. ("ETS"), and Global Telelink Services, Inc.
("GTS"). Sauer and Kerley also fraudulently sold the securities of Global Contact
Corporation ("GCC"), a corporation controlled by GTS. The securities were sold
primarily to elderly investors.
2. Each investment program purported to sell a pay telephone or other piece of equipment
to the investor, and to lease the equipment back from the investor in exchange for a
periodic return to be paid to the investor. The ETS, GTS and GCC investment agreements
were substantially similar in structure, although each investment had a different purchase
price and promised investors a slightly different return varying from 14 percent to 15
percent. GTS and GCC promised investors a percentage of the revenue from their device
in addition to the fixed monthly payment.
3. From 1998 until September 2000, Jordan and his agents, including Sauer and Kerley,
sold more than $84 million of the ETS payphone investments at prices between $5,000
and $7,000 per unit.
SNIPPETS:
PHIL D. KERLEY,
Plaintiff, Securities and Exchange Commission, files this complaint and alleges that:
Sauer and Kerley also fraudulently sold the securities of Global Contact Corporation,
Each investment program purported to sell a pay telephone or other piece of equipment to the
The ETS, GTS and GCC investment agreements were substantially similar in structure, although
From 1998 until September 2000, Jordan and his agents, including Sauer and Kerley, sold more
Beginning in November 1999 until at least June 2000, Jordan and his agents, including Sauer
Jordan, Sauer and Kerley knew, or were severely reckless in failing to discover, that ETS,
Defendants Jordan, Sauer and Kerley, by virtue of their conduct, directly and indirectly,
The defendants, directly and indirectly, made use of the mails, the means and instruments of
Certain of the transactions, acts, practices and courses of business constituting violations
Defendants Jordan and Sauer reside in the Northern District of Georgia.
ETS was subsequently enjoined from committing violations of the registration and antifraud
Jordan paid BEE's sales agents, including Sauer and Kerley, between 12 percent and 18 percent
Jordan persisted in selling ETS investments until September 2000, despite the fact that the
Jordan, Sauer and Kerley provided investors with sales materials prepared by BEE and a "Basic
In fact, ETS was a Ponzi scheme, which is a scheme where returns are paid to investors from
Jordan received copies of ETS financial statements and discussed them with ETS management.
GTS prepared a promotional video to show to sales agents and prospective investors that
Jordan, Sauer and Kerley were severely reckless in providing the materials containing those
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