UNITED STATES SECURITIES AND EXCHANGE COMMISSION

LITIGATION RELEASE NO 17194 / October 16, 2001

Securities and Exchange Commission v. Great White Marine and Recreation, Inc., et al., Civil Action No. W-99-CV-0230, USDC, WDTX (Waco Division)

On October 12, 2001, Judge Walter S. Smith, Jr., of the United States District Court for the Western District of Texas in Waco, found Alvis Colin Smith, Jr., of Waco, Texas, to be in contempt of court and ordered Mr. Smith jailed.

This contempt proceeding arose from the Commission's civil lawsuit filed against Mr. Smith and his related corporation, Great White Marine and Recreation, Inc., in 1999. The Commission alleged that Great White and Mr. Smith had offered and sold unregistered shares of Great White's stock through false statements in press releases, in promotional brochures, in internet website postings and in a Form 10-SB filed with the Commission. The Commission also alleged that Great White and Mr. Smith had raised at least $10.8 million through their fraudulent activities, that Smith diverted approximately $3 million for Great White's and his own uses and that Great White made a $1 million "dividend" payment as part of a "Ponzi" scheme.

On June 19, 2001, Judge Smith entered a final judgment against Mr. Smith. In the judgment, Judge Smith found that Mr. Smith had engaged in fraud and had violated Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities and Exchange Act of 1934 and Commission Rule 10b-5. The final judgment enjoined Mr. Smith from future violations of those provisions of the antifraud provisions of the federal securities laws and required Mr. Smith to disgorge $3 million, $100,000 posted as an appearance bond, three lots on Lake Richland Chambers, assets in accounts with financial institutions, several vehicles and certain other assets. Although Mr. Smith did disgorge the $100,000 bond, the lake lots, the contents of accounts with financial institutions and some (but not all of the vehicles), he failed or refused to deliver the other assets.

After a contempt hearing on October 11, 2001, Judge Smith determined that Mr. Smith had not complied with the final judgment and had "made no good faith effort to comply" as to disgorging $3 million and certain vehicles. Judge Smith ordered Mr. Smith incarcerated until he disgorges the vehicles and a residence.

Judge Smith scheduled an October 24, 2001 hearing to determine what if any additional relief should be ordered.