U.S. SECURITIES & EXCHANGE COMMISSION
Litigation Release No. 17773/ October 7, 2002
Civil Action No. C-2-00 622, (S.D. Ohio 2000).
The Securities and Exchange Commission (SEC) announced that on
September 27, 2002, it filed with the U.S. District Court for the
Southern District of Ohio, a Motion for an Order to Show Cause why
Richard Mann should not be held in contempt for failing to comply with
the Court's Order of April 8, 2002. That order, among other things,
required Mann to make disgorgement and prejudgment interest payments
totaling $2,116,870.
In addition, the SEC announced that on September 30, 2002, it filed
with the U.S. District Court for the Southern District of Ohio, a
similar motion against Jamie P. Piromalli, Steven Brewer, and A.
Michael Jaillett for their failure to comply with the Court's Orders
of November 13, 2001 and January 22, 2002. Combined, the November 13,
2001 and January 22, 2002 Orders, among other things, required
Piromalli, Brewer, and Jaillett to make disgorgement and prejudgment
interest payments totaling $5,218,531.61, $651,933, and $346,689,
respectively.
The Honorable James L. Graham, U.S. District Court for the Southern
District of Ohio, ordered Mann, Piromalli, Brewer, and Jaillett
(collectively, "the Defendants") to make the described disgorgement
and prejudgment interest payments based on their roles in the World
Vision Entertainment, Inc. ("World Vision") Ponzi scheme. The SEC's
Complaint, filed June 1, 2000, alleged that the Defendants offered and
sold securities in the form of nine-month promissory notes without
registering them with the SEC. In furtherance of the scheme, the
Complaint alleged that the Defendants, directly and indirectly,
through a nationwide sales network, made numerous false and misleading
statements to investors about the World Vision notes. The Defendants
misrepresented that the notes were unconditionally guaranteed and
insured and that all of the proceeds of the offering would be used to
develop World Vision's products. In reality, the Defendants allegedly
used the proceeds of the note offering to pay for the personal and
business expenses of company officers and directors, to cover interest
and principal payments to investors and to pay large, undisclosed
commissions to the sales network. Through World Vision, the
Defendants, and others acting in concert with them, raised at least
$64 million from approximately 1,200 investors in 33 states from the
sale of World Vision promissory notes. As a result, when World Vision
filed for bankruptcy protection in September 1999, investors lost
approximately $52 million.
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U.S. SECURITIES & EXCHANGE COMMISSION
Ohio 2000).
The Securities and Exchange Commission announced that on September 27, 2002, it filed with
That order, among other things, required Mann to make disgorgement and prejudgment interest
Combined, the November 13, 2001 and January 22, 2002 Orders, among other things, required
The Honorable James L. Graham, U.S. District Court for the Southern District of Ohio, ordered
The SEC's Complaint, filed June 1, 2000, alleged that the Defendants offered and sold
In furtherance of the scheme, the Complaint alleged that the Defendants, directly and
The Defendants misrepresented that the notes were unconditionally guaranteed and insured and
In reality, the Defendants allegedly used the proceeds of the note offering to pay for the
Through World Vision, the Defendants, and others acting in concert with them, raised at least
As a result, when World Vision filed for bankruptcy protection in September 1999, investors
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