SEC Halts Fraudulent Global Pyramid Scheme Preying on Hispanic Community

FOR IMMEDIATE RELEASE
2007-258

Washington, D.C., Dec. 11, 2007 - The Securities and Exchange Commission has won an asset freeze and other emergency relief to halt a massive pyramid scheme with as many as 70,000 victims in 64 countries. The scheme involving the purported sale of English and Spanish language tutorials particularly preyed on Hispanic communities in Orlando, Fla., and Puerto Rico.

The case was unsealed yesterday by the court, which issued the emergency order and asset freeze on Dec. 6, 2007. The SEC charged Robert Lane, Wealth Pools International, Inc., and Recruit For Wealth, Inc. with the fraudulent offer and sale of unregistered securities in the form of "Associate" memberships in an enterprise called Wealth Pools. The fraudulent offering began in 2005 and the defendants claim to have raised more than $132 million in 2007 alone, according to the SEC's complaint.

Linda Chatman Thomsen, Director of the SEC's Division of Enforcement, said, "This action reaffirms the Commission's commitment to protecting investors from fraudulent securities offerings, and particularly affinity frauds that seek to exploit an ethnic group."

David Nelson, Director of the SEC's Miami Regional Office, added, "This scheme was targeted at Hispanic communities both in the United States and overseas. Our action is designed to preserve and recover as many assets as possible for the benefit of harmed investors."

Wealth Pools purports to be a multi-level marketing company primarily selling an English and Spanish language tutorial DVD called Talk-N-Tutor through a network of sales Associates around the world, the SEC alleges in its complaint. The DVD is, in reality, a front for Wealth Pools's true product - an investment in one or more "pools" that offer investors an opportunity to receive passive income through the efforts of others to recruit new investors, according to the complaint.

The SEC alleges that investors do not profit from the sale of DVDs to consumers, but from the recruitment of new investors termed "Associates."

The SEC's complaint further charges the defendants with luring investors through "Opportunity Meetings" held in Puerto Rico, at the Wealth Pools Orlando headquarters, and live on the Internet. The defendants enticed investors to purchase thousands of DVDs by falsely promising them that they would earn income for life with no further effort, according to the SEC's complaint. The SEC also charged the defendants with failing to disclose, among other things, that Wealth Pools is a pyramid scheme utterly dependent on an ever increasing number of new investors to pay existing ones, and is destined to collapse, leaving investors with substantial losses. Furthermore, the SEC alleges that the defendants do not disclose the dilutive effect of new investors on all investors' returns, which renders baseless the defendants representations that 97 percent of Associates make money and receive a lifetime of passive income. Finally, the complaint alleges that the defendants do not disclose that Lane was president of another company that used similar methods that failed, resulting in it declaring bankruptcy and being enjoined by the State of Florida.

The SEC filed its action in the U.S. District Court for the Middle District of Florida on Dec. 5, 2007, seeking a temporary restraining order, preliminary and permanent injunctions, disgorgement of ill-gotten gains plus prejudgment interest, and civil penalties. The complaint alleges that the defendants violated the antifraud provisions of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and the securities registration provisions of Sections 5(a) and 5(c) of the Securities Act of 1933. The SEC also named as relief defendants members of Robert Lane's family and other related entities who received investor proceeds raised in the fraudulent and unregistered offering.

On Dec. 6, 2007, the Honorable John Antoon II, U.S. District Judge, entered, ex parte, an emergency order temporarily restraining the defendants and freezing the assets of Wealth Pools International, Inc., Recruit For Wealth, Inc., Robert Lane, and relief defendants Julia Lane, Richard Lane, Renee Becker, T-N-T Education, Inc., Mundo Trade, Inc., and First Fiduciary Business Trust. The order also provides for expedited discovery, a sworn accounting and the preservation of records. The Court also appointed Denise Dell-Powell, an attorney in the law firm of Akerman Senterfitt of Orlando, as a receiver over Wealth Pools International, Inc. and Recruit For Wealth, Inc. Among other things, the receiver is responsible for marshaling and safeguarding assets held by these entities. A show cause hearing has been set for Dec. 13, 2007, in Orlando to determine whether the emergency asset freeze and other relief should remain in effect.

Investors are encouraged to read the SEC's "Affinity Fraud" Investor Alert, which provides tips on how to avoid being a victim in an affinity fraud. This and other investor alerts can be found on the SEC's Web site, at www.sec.gov/investor/pubs.shtml.

The Commission acknowledges the assistance of the Office of the Commission of Financial Institutions for the Republic of Puerto Rico and the Florida Office of Financial Regulation.

For more information, contact:

David Nelson
Regional Director, SEC's Miami Regional Office
(305) 982-6332

Glenn S. Gordon
Associate Regional Director (Enforcement), SEC's Miami Regional Office
(305) 982-6360

Eric Busto
Assistant Regional Director (Enforcement), SEC's Miami Regional Office
(305) 982-6362

  Additional materials: Litigation Release No. LR-20393