Securities and Exchange Commission
Washington, D.C.

Litigation Release No. 17766 / October 3, 2002

Securities and Exchange Commission v. Dominique S. Alvieri and Diversified
Financial Corporation, 02 Civ.7893 (DAB) (S.D.N.Y.)

   The Securities and Exchange Commission announced today that it filed a
   Complaint in the United States District Court for the Southern
   District of New York charging Dominique S. Alvieri, a former New
   Jersey investment adviser, and Diversified Financial Corporation, a
   corporation that Alvieri controlled, with perpetrating an affinity
   fraud targeted at members of the ethnic Croatian community residing in
   northern New Jersey. The Complaint alleges that, between December 1996
   and March 1999, Alvieri fraudulently induced at least three of his
   advisory clients to purchase at least $555,800 worth of shares of
   either the Diversified Financial Fund or the Diversified Equity Fund,
   both of which Alvieri knew did not exist. To induce additional
   investments in the Funds and conceal the fraud, Alvieri and
   Diversified engaged in further wrongdoing, including providing the
   clients with falsified monthly account statements that baselessly
   reported that the Funds were generating steady returns and telling at
   least one client that his investment was on deposit in a Financial
   Fund account at a broker-dealer that did not exist. The Complaint
   further alleges that Alvieri misrepresented to his clients that he was
   the adviser to the Funds and that, through the Funds, he would invest
   his clients' assets in publicly traded securities. In fact, Alvieri
   misappropriated his clients' monies and, after March 1999, fled the
   United States.

   Named in the Complaint are

   Dominique S. Alvieri, a 34 year-old former resident of Little Ferry,
   New Jersey.

   Diversified Financial Corporation, an entity incorporated by Alvieri
   in the Cayman Islands, and used by Alvieri to conduct his investment
   advisory business.

   The Commission alleges that Alvieri and Diversified (i) engaged in
   securities fraud in violation of Section 17(a) of the Securities Act
   of 1933, 15 U.S.C. § 77q(a), Section 10(b) of the Securities Exchange
   Act of 1934, 15 U.S.C. § 78j(b), and Rule 10b-5 thereunder, 17 C.F.R.
   § 240.10b-5; and (ii) committed securities fraud in violation of
   Sections 206(1) and 206(2) of the Investment Advisers Act of 1940, 15
   U.S.C. §§ 80b-6(1) and 80b-6(2). The Commission seeks permanent
   injunctive relief, disgorgement of ill-gotten gains, prejudgment