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SECURITIES AND EXCHANGE COMMISSION
LITIGATION RELEASE NO. 16886 / February 1, 2001
SECURITIES AND EXCHANGE COMMISSION v. E-BIZ VENTURES, et al. (U.S.D.C., Western District of Oklahoma, Civil Action No. Civ 001-233-W)
On January 31, 2001, Judge David L. Russell, United States District Court for the Western District of Oklahoma, issued an Ex Parte Order Freezing Assets, Order Requiring an Accounting, Repatriation Order and Order Requiring Preservation of Documents and Authorizing Expedited Discovery against all defendants and relief defendants, and issued an Ex Parte Temporary Restraining Order against, and appointed a receiver over the assets of, defendant Donald Allen English, individually and d/b/a E-Biz Ventures and EE-Biz Ventures ("English").
In its complaint, the Commission charged English with creating and organizing an Internet ponzi scheme through which at least 22,000 investor accounts have lost at least $8.8 million. To facilitate the scheme, English registered two Internet websites, www.ee-bizventures.com and www.donventures.com.au, which claimed that E-Biz was a "Christian-based humanitarian organization" which could provide "very large, long-term, monthly income with virtually NO effort." English and E-Biz promised returns of as much as 40 to 100 percent in as little as seven to ten days. The Commission also alleged that English and E-Biz fraudulently claimed to be in "total compliance with the laws and regulatory agencies" and to have hired special accounting, legal and computer expertise. In reality, English used investor funds to repay earlier investors and to purchase thousands of dollars of personal items, including electronic equipment, vehicles, appliances and furniture. Further, after English abruptly quit paying returns to investors, he began to lull them with false claims that the government halted E-Biz's operations, that refunds would be sent starting on Valentine's Day, 2001, and that, soon thereafter, E-Biz would resume business.
In its action, the Commission charged the following defendants and relief defendants:
- Defendant, Donald Allen English, Individually and doing business as E-Biz Ventures and/or EE-Biz Ventures. English resides in Midwest City, Oklahoma, and is one of the founders and the registered operator of the two E-Biz websites, which were soliciting funds from investors that he misappropriated at least $276,562 of E-Biz investor funds.
- Relief-Defendants:
- George M. Anderton, who resides in Blackfoot, Idaho and is one of the founders of E-Biz. He received at least $187,335 of investor funds for no apparent consideration.
- Ronald L. Warner, who resides in Orem, Utah, and is one of the founders of E-Biz. He received at least $148,874 of investor funds for no apparent consideration.
- Aaron Carr, who resides in Ocala, Florida, and is one of the founders of E-Biz. He received at least $70,014 of investor funds for no apparent consideration.
- Joan M. Eveleno, who resides in Naples, Florida and is one of the founders of E-Biz. She received at least $59,346 of investor funds for no apparent consideration.
- Steven Wayne McAllister, who resides in Agawam, Massachusetts and is one of the founders of E-Biz. He received at least $41,167 of investor funds for no apparent consideration.
The Commission's complaint charges English, individually and d/b/a E-Biz Ventures and EE-Biz Ventures with violating the antifraud provisions found in Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities and Exchange Act of 1934 and Rule 10b-5 thereunder, as well as the registration provisions of Sections 5(a) and 5(c) of the Securities Act. The complaint seeks a temporary restraining order, preliminary and permanent injunctions, disgorgement with prejudgment interest and a civil money penalty against English, as well as the appointment of a receiver over his assets. In addition, the complaint also seeks an asset freeze, accounting, an order prohibiting the movement, alteration and destruction of books and records, expedited discovery, and an order to repatriate assets located outside the United States against English and all relief defendants. Finally, the complaint also seeks disgorgement against the relief defendants.
The Commission would like to acknowledge the assistance of the Oklahoma Department of Securities and the United States Postal Inspection Service, Southwest Division.
http://www.sec.gov/litigation/litreleases/lr16886.htm
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