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SEC LITIGATION RELEASE
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EXTRACTED KEY WORDS
CAPITAL CONSULTANTS JEFFREY GRAYSON COMMISSION CLIENTS CIVIL PENALTY SCHEME FRAUD CHARGES INVESTMENT PERMANENT INJUNCTION AMENDED JUDGMENT PORTLAND LLC EXCHANGE COMMISSION SECURITIES CRIMINAL SENTENCING PRISON BENEFIT PLANS UNION PENSION DEFRAUD CAPITAL CONSULTANTS CONNECTION FALSE TAX PREPARATION ASSISTING MAIL FRAUD GRAYSON PLEADED GUILTY RECEIVERSHIP COURT ENTERED PERMANENT WILSHIRE CREDIT |
U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 17973 / February 6, 2003
SEC v. Capital Consultants, LLC, et al., Civil Action No. CV 1290 KI
(D. Ore.)
COMMISSION CONCLUDES CASE AGAINST JEFFREY L. GRAYSON
The Securities and Exchange Commission ("Commission") announced that
on December 5, 2002, a federal judge in Portland, Oregon, entered an
amended judgment of permanent injunction against Jeffrey L. Grayson, a
former principal of Capital Consultants, LLC, an investment adviser
located in Portland. The remaining issue in the case was the
assessment of a civil penalty against Grayson. The amended judgment
does not assess a civil penalty against Grayson based upon sworn
statements of financial condition that he submitted to the Commission
staff.
The Commission charged Capital Consultants, Jeffrey Grayson and his
son, Barclay L. Grayson with fraud and obtained emergency relief
against them in September 2000. The complaint alleged that the
defendants were operating an undisclosed Ponzi-like scheme in which
they used client funds to make interest payments to other clients who
were invested in a $160 million loan that Capital Consultants made to
Wilshire Credit Corp. On April 30, 2001, the Court entered permanent
injunctions against Capital Consultants and the Graysons. Capital
Consultants is currently in receivership.
On April 23, 2002, Grayson pleaded guilty to one count of mail fraud
and one count of assisting in the preparation of a false tax return in
connection with his role as the former principal of Capital
Consultants. Jeffrey Grayson admitted that between 1994 and 2000, he
engaged in a scheme to defraud Capital Consultants' clients, mostly
union pension and benefit plans. The criminal charges against Jeffrey
Grayson carry a maximum penalty of 8 years in prison and maximum fine
of $500,000. Grayson's criminal sentencing is scheduled for January
2003.
_________________________________________________________________
Modified 02/12/2003
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