SECURITIES AND EXCHANGE COMMISSION

LITIGATION RELEASE NO. 18336 /September 10, 2003

SEC OBTAINS EMERGENCY RELIEF AGAINST OPERATOR OF INTERNET PONZI SCHEME

, Civil Action No. 303-CV-01524-MRK).

   The Commission announced today that, on September 8, 2003, it obtained
   a temporary restraining order, asset freeze and other ancillary relief
   against Blake A. Prater and his company, Wellspring Capital Group,
   Inc., in connection with a Ponzi scheme operated over the Internet and
   by other means. The Commission alleged in its complaint, filed on
   September 5, 2003, that Prater and Wellspring fraudulently promised
   investors returns as high as 1,000 percent per year in connection with
   the scheme. The Honorable Peter C. Dorsey, United States District
   Judge for the District of Connecticut, granted the TRO and asset
   freeze after an ex parte hearing in federal court in New Haven on
   Monday, September 8. The court's order was based on the Commission's
   prima facie showing that Prater and Wellspring had engaged in
   securities fraud and other violations of the federal securities laws.

   According to the Commission's complaint, Prater, of Guilford
   Connecticut, and Wellspring, also headquartered in Guilford,
   Connecticut, operated a sophisticated Internet Ponzi scheme that
   raised at least $3 million from thousands of investors. The
   Commission's complaint alleged that Prater's scheme used a series of
   interrelated Internet web sites and a network of agents operating
   throughout the United States to guarantee prospective investors
   exorbitant returns through a variety of programs. According to the
   Commission's complaint, under one set of programs, Prater, through
   Wellspring, promised that, in exchange for a small sum of money, it
   would pay investors returns as high as 1,000 percent per year in the
   form of payments for various living expenses of the investors, such as
   car loans, rent, or business expenses. The Commission's complaint
   alleged that Wellspring claimed it used the investor funds to invest
   in a portfolio of companies, and that the profits from the portfolio,
   in turn, paid for the exorbitant returns to investors. According to
   the Commission's complaint, Wellspring also offered investors the
   opportunity to invest directly in the portfolio of companies. In this
   aspect of the scheme as well, Prater guaranteed investors a profit and
   made misrepresentations about the companies in the portfolio and about
   his own qualifications. The Commission's complaint further alleged
   that Prater also failed to disclose his criminal history, which
   includes forgery and fraud convictions, to investors. According to the
   Commission's complaint, Wellspring also operated out of satellite
   offices in St. Albans, Vermont, and elsewhere.