Source: http://www.jdsupra.com/post/documentViewer.aspx?fid=d9d7c592-adb2-453b-b855-46beedeb21d4
Timestamp: 2017-06-24 00:21:22
Document Index: 292425753

Matched Legal Cases: ['§ 77', '§ 78', '§ 240', '§ 77', '§ 78', '§ 1391', '§ 77', '§ 78', '§ 77', '§ 77', '§ 77', '§ 77', '§ 77', '§ 240', '§78', '§78', '§ 240', '§ 77', '§ 78', '§ 240', '§ 77', '§ 78']

SEC Complaint Against CRE Capital Corporation and James G. Ossie | SEC v CRE Capital Corporation and James G. Ossie | Doug Cornelius - JDSupra
SEC v CRE Capital Corporation and James G. OssieSEC Complaint Against CRE Capital Corporation and James G. Ossie
The Complaint alleges that CRE and Ossie have raised at least $25 million from over 120 investors offering "30 Day Currency Trading Contracts," which promise a guaranteed 10% return in thirty days. The Complaint also alleges that CRE and Ossie claim that they generate profits sufficient to pay these guaranteed returns by trading United States and Japanese currency contracts as the exchange rate fluctuates. The Complaint alleges that CRE and Ossie told investors that the program involves very little risk because CRE has established a large, defensive reserve fund from which to pay back the 10% ROI, plus redeemed principal. As alleged in the Complaint, CRE does not generate sufficient returns from currency trading to pay the promised returns. The Complaint alleges that the defendants claim CRE and its program were audited by an outside accounting firm which concluded that the investment program was not a Ponzi scheme. According to the complaint, CRE operated as a Ponzi scheme by paying all returns to investors from funds contributed by new investors.
Download PDF FILED IN CLERKS OFFICE U,S.U.C. -Atlanta IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF GEORGIA ATLANTA DIVISION SECURITIES AND EXCHANGE COMMISSION, Plaintiff, Civil Action File No. CRE CAPITAL CORPORATION and JAMES G. OSSIE Defendants. COMPLAINT FOR INJUNCTIVE AND OTHER RELIEF Plaintiff Securities and Exchange Commission (the "Commission") files this complaint and alleges the following: SUMMARY 1. Since at least as early as April 2008, CRE Capital Corporation ("CRE) and its President and chief operating Officer, James G. Ossie ("Ossie"), have been operating a fraudulent Ponzi scheme that has raised more than $25 million from over 120 investors. s r? />~-\> t I L "^) V//-^ /*t _£ anta JAN 1 5 2009 JAMES N, BATTEN, IN THE UNITED STATES DISTRICT COURT Clerk lei* FOR THE NORTHERN DISTRICT OF GEORGIA ATLANTA DIVISION AND EXCHANGE Plaintiff, Civil Action File No. v. COO CAPITAL CORPORATION and G. OSSIE Defendants COMPLAINT FOR INJUNCTIVE AND OTHER RELIEF Secuities and Exchange Commission (the "Commission") iles this and alleges the following: SUMMARY at least as early as April 2008, CRE Capital Corporation CRE") and its President and Chief Operating Officer, James G. Ossie ("Ossie"), been operating a raudulent Ponzi scheme that has raised more than $25 rom over 120 investors. Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=d9d7c592-adb2-453b-b855-46beedeb21d42. CRE, located in Alpharetta, Georgia, has been offering "30 Day Currency Trading Contracts," which promise a guaranteed ten percent (1 0%) return (the "ROI") in thirty days, the equivalent of over a 120% annual percentage rate. In some case, investors have been promised up to 20% every thirty days. Investors have been permitted to pool their funds with other investors to reach a minimum $100,000 investment level. CRE and Ossie have been claiming that they generate profits sufficient to pay these guaranteed returns by trading United States and Japanese currency contracts as the exchange rate fluctuates. Investors have been told that the program involves very little risk because CRE has established a large reserve fund. The "reserve" funds are purportedly not traded or exposed to any risk and are available to pay the 10% ROI, plus redeemed principal, if CRE's trading activities are less profitable than expected in any particular month. 3. In fact, CRE's currency trading has generated cumulative losses of over $12 million. The investment program is a Ponzi scheme and returns to investors are paid from principal, or from finds contributed by new investors. 4. The investments offered by CRE are securities, as that term is defined in the federal securities laws. in Alpharetta, Georgia, has been offering "30 Day Trading Contracts," which promise a guaranteed ten percent (10%) (the "ROI") in thirty days, the equivalent of over a 120% annual percentage In some case, investors have been promised up to 20% every thirty days. have been permitted to pool their funds with other investors to reach a $100,000 investment level. CRE and Ossie have been claiming that they proits suficient to pay these guaranteed retuns by trading United States as the exchange rate luctuates. Investors have that the program involves very little risk because CRE has established a fund. The "reserve" funds are purportedly not traded or exposed to and are available to pay the 10% ROI, plus redeemed principal, if CRE's activities are less profitable than expected in any particular month. fact, CRE's currency trading has generated cumulative losses of $12 million. The investment program is a Ponzi scheme and retuns to are paid rom principal, or rom funds contributed by new investors. offered by CRE are securities, as that term is defined federal securities laws. 2 Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=d9d7c592-adb2-453b-b855-46beedeb21d4their conduct, CRE and Ossie have violated and, unless will continue to violate Section 17(a) of the Securities Act of 1933 (the "Securities Act") [15 U.S.C. 5 77q(a)] and Section 10(b) of the Securities Act of 1934 (the "Exchange Act") [15 U.S.C. $5 78j(b)] and Rule lob-5 F.R. $8 240.10b-51 promulgated thereunder. AND VENUE has jurisdiction over this action pursuant to Sections 20(b) a) of the Securities Act [15 U.S.C. $5 77t(b) and 77v] and Sections 21(d), 2 1(of the Exchange Act [15 U.S.C. $5 78u(d), 78u(e) and 78aal. in this district pursuant to 28 U.S.C. 5 1391(b)(l) and Section 22(a) of the Securities Act [15 U.S.C. 5 77v(a)]; and Section 27 of the [15 U.S.C. $ 78aal. Some of the sales of the investments occurred district. CRE maintains its offices in this district. Ossie lives in this district. use of the mails, the means and of transportation and communication in interstate commerce, and the of interstate commerce, in connection with the acts, and courses of business alleged in this Complaint. 5. Though their conduct, CRE and Ossie have violated and, unless enjoined, will continue to violate Section 17(a) of the Securities Act of 1933 (the uSecurities Act") [15 U.S.C. § 77q(a)] and Section 10(b) of the Secuities s Exchange Act of 1934 (the "Exchange Act") [15 U.S.C. §§ 78j(b)] and Rule 10b-5 [17 C.F.R. §§ 240.10b-5] promulgated thereunder. JURISDICTION AND VENUE 6. This Court has jurisdiction over this action pursuant to Sections 20(b) and 22(a) of the Securities Act [15 U.S.C. §§ 77t(b) and 77v] and Sections 21(d), 21 (e), and 27 of the Exchange Act [15 U.S.C. §§ 78u(d), 78u(e) and 78aa]. 7. Venue is proper in this district pursuant to 28 U.S.C. § 1391(b)(1) and (2); Section 22(a) of the Securities Act [15 U.S.C. § 77v(a)]; and Section 27 of the Exchange Act [15 U.S.C. § 78aa]. Some of the sales of the investments occurred in this district. CRE maintains its offices in this district. Ossie lives in this district. 8. CRE and Ossie have made use of the mails, the means and instruments of transportation and communication in interstate commerce, and the means and instrumentalities of interstate commerce, in connection with the transactions, acts, practices and courses of business alleged in this Complaint. 3 Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=d9d7c592-adb2-453b-b855-46beedeb21d49. CRE Capital Corporation is a Georgia corporation with offices in Alpharetta, Georgia. CRE was organized on March 26,2007. 10. James G. Ossie, 48 years of age, is the president and chief executive officer of CRE. Ossie resides in Atlanta, Georgia. FACTS 1 1. Since at least as early as April 2008, CRE and Ossie have been offering to investors "30 Day Currency Trading Contracts," with CRE which promise a ten percent (1 0%) return in thirty days. 12. CRE requires its customers to be business entities, rather than individuals. Accordingly, to open a 30 Day Currency Trading Contract with CRE, an individual must first form a limited liability company or other business entity. 13. CRE has allowed investors to enter into contracts of $100,000, $300,000, $500,000, $1 million, $5 million, and $10 million. However, CRE does permit investors with less than $1 00,000 to pool their funds with those of other investors to reach the minimum $100,000 investment level. 14. The investment program is managed by Ossie, on behalf of CRE. CRE, through Ossie, has been claiming that it generates profits sufficient to pay the DEFENDANTS 9. CRE Capital Corporation is a Georgia corporation with offices in Alpharetta, Georgia. CRE was organized on March 26, 2007. 10. James G. Ossie, 48 years of age, is the president and chief executive officer of CRE. Ossie resides in Atlanta, Georgia FACTS 11. Since at least as early as April 2008, CRE and Ossie have been offeing to investors "30 Day Currency Trading Contracts," with CRE which promise a ten percent (10%) return in thirty days. 12. CRE requires its customers to be business entities, rather than individuals. Accordingly, to open a 30 Day Currency Trading Contract with CRE, an individual must first form a limited liability company or other business entity 13. CRE has allowed investors to enter into contracts of $100,000, $300,000, $500,000, $1 million, $5 million, and $10 million. However, CRE does permit investors with less than $100,000 to pool their funds with those of other investors to reach the minimum $100,000 investment level. 14. The investment program is managed by Ossie, on behalf of CRE. CRE, through Ossie, has been claiming that it generates profits sufficient to pay the 4 Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=d9d7c592-adb2-453b-b855-46beedeb21d4promised ten percent in thirty days by trading United States and Japanese currency contracts as the exchange rate fluctuates. 15. CRE and Ossie have been telling investors that the program involves little risk because CRE has established a large, defensive reserve fund. Ossie has represented to investors that these "reserve" funds would not be traded or exposed to any risk and would be available to pay the 10% ROI, plus redeemed principal, if CRE's trading activities are less profitable than expected in any particular month. 16. CRE and Ossie promise investors, and in at least some instances have guaranteed investors, that at the end of each 30 day period, all investors would receive their 10% ROI by wire transfer, as well as the option to receive a full refund of their principal. Investors have been permitted to roll over their principal into a new 30 Day Currency Trading Contract, or to invest additional funds to open a new 30 Day Currency Trading Contract in a higher amount. 17. CRE and Ossie have raised more than $25 million from over 120 investors. 1 8. CRE recruits most, and possibly all, of its investors through its "correspondents," which are salespeople located throughout the United States. Each "correspondent" has its own internet website, requiring a password and user identification to access. promised ten percent in thirty days by trading United States and Japanese currency contracts as the exchange rate fluctuates. 15. CRE and Ossie have been telling investors that the program involves little risk because CRE has established a large, defensive reserve fund. Ossie has represented to investors that these "reserve" funds would not be traded or exposed to any risk and would be available to pay the 10% ROI, plus redeemed principal, if CRE's trading activities are less profitable than expected in any particular month. 16. CRE and Ossie promise investors, and in at least some instances have guaranteed investors, that at the end of each 30 day period, all investors would receive their 10% ROI by wire transfer, as well as the option to receive a full refund of their principal. Investors have been permitted to roll over their principal into a new 30 Day Currency Trading Contract, or to invest additional funds to open a new 30 Day Currency Trading Contract in a higher amount. 17. CRE and Ossie have raised more than $25 million rom over 120 investors. 18. CRE recruits most, and possibly all, of its investors through its "correspondents," which are salespeople located throughout the United States. Each "correspondent" has its own intenet website, requiring a password and user identification to access. 5 Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=d9d7c592-adb2-453b-b855-46beedeb21d419. CRE pays its correspondents commissions on the 30 Day Trading Contracts. These commissions are paid not only for the first time an investor contributed funds to CRE7s 30 Day Currency Trading Program, but also upon the ensuing renewals of that contract every 30 days. The percentage commission paid by CRE to its correspondents every 30 days varied among investors, but has ranged as high as 16%. Thus, in some cases, the commission payment made to the correspondent every 30 days has been even higher than the ROI paid to the investor. 20. Many, if not all, of CRE7s correspondents have also been investors in its 30 Day Currency Trading Contracts. CRE has provided extra compensation to its correspondents by allowing many, if not all of them, for at least some 30 day periods, to receive guaranteed ROI of 20%, twice the 10% ROI promised to most of CRE7s clients. 2 1 .-Ossie holds periodic conference calls with the correspondents and potential investors in which he describes the program to them. On these conference calls, CRE, through Ossie, has been making various misrepresentations, as described below. 19. CRE pays its correspondents commissions on the 30 Day Trading Contracts. These commissions are paid not only for the first time an investor contributed funds to CRE's 30 Day Currency Trading Program, but also upon the ensuing renewals of that contract every 30 days. The percentage commission paid by CRE to its correspondents every 30 days varied among investors, but has ranged as high as 16%. Thus, in some cases, the commission payment made to the correspondent every 30 days has been even higher than the ROI paid to the investor. 20. Many, if not all, of CRE's correspondents have also been investors in its 30 Day Currency Trading Contracts. CRE has provided extra compensation to its correspondents by allowing many, if not all of them, for at least some 30 day periods, to receive guaranteed ROI of 20%, twice the 10% ROI promised to most of CRE's clients. 21. Ossie holds periodic conference calls with the correspondents and potential investors in which he describes the program to them. On these conference calls, CRE, through Ossie, has been making various misrepresentations, as described below. 6 Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=d9d7c592-adb2-453b-b855-46beedeb21d422. CRE and Ossie did use a portion of the funds invested in the 30 Day Currency Trading Program for currency trading. They did this through two separate trading accounts. 23. In April 2008, CRE and Ossie opened a trading account in the name of CRE at Forex.com, a division of Gain Capital Group, LLC ("Gain Capital"). CRE and Ossie deposited over $5 million into the Forex.com trading account. Since June 1 8,2008, CRE and Ossie traded foreign currency futures in the Forex.com account and incurred losses totaling over $4 million, including commissions and fees. 24. On or about December 2,2008, CRE and Ossie represented to Forex.com, in response to inquiries fiom that firm, that all of the funds they had deposited into CRE's trading account were their own knds, and not those of customers or investors. These statements were false. 25. In approximately June 2008, CRE and Ossie opened a second trading account in the name of CRE in London, at Deutsche Bank. From June through December 2008, CRE and Ossie transferred $1 2 million of investor funds to the Deutsche Bank trading account in London. From June 2008 through January 8, 2009, CRE and Ossie's currency trading in the account generated losses totaling $8,067,032.40. and Ossie did use a portion of the funds invested in the 30 Day Trading Program for currency trading. They did this through two accounts. 2008, CRE and Ossie opened a trading account in the name CRE at Forex.com, a division of Gain Capital Group, LLC ("Gain Capital") and Ossie deposited over $5 million into the Forex.com trading account. 18, 2008, CRE and Ossie traded foreign currency futures in the com account and incurred losses totaling over $4 million, including and fees. about December 2, 2008, CRE and Ossie represented to com, in response to inquiries rom that firm, that all of the funds they had into CRE's trading account were their own funds, and not those of or investors. These statements were false. approximately June 2008, CRE and Ossie opened a second trading in the name of CRE in London, at Deutsche Bank. From June through 2008, CRE and Ossie transferred $12 million of investor funds to the Bank trading account in London. From June 2008 through January 8, CRE and Ossie's currency trading in the account generated losses totaling 8,067,032.40 7 Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=d9d7c592-adb2-453b-b855-46beedeb21d4Misrepresentations and Omissions 26. CRE and Ossie have been representing to investors, directly and through correspondents, that the ten percent ROI per month return which is paid to them is produced by profits from CRE7s currency trading. This representation is false. In fact, CRE has lost over $12 million through its currency trading. CRE's program functions as a Ponzi scheme, with "profits" of investors paid from principal or fi-om money invested by subsequent investors. 27. CRE and Ossie also represented to investors that the 30 Day Currency Trading program was audited by the Robert Half firm. That statement was false. 28. CRE and Ossie have told investors repeatedly that if all investors requested a return of their principal and ROI, that CRE had sufficient funds on hand to make all of these payments within a thirty day period of time as the contracts matured. In fact, CRE would not be able to repay all of its investors if they requested their principal and ROI back. 29. CRE and Ossie have also represented to potential investors that CRE is planning on making a $100 million stock offering in early 2009, .and that the offering will not be registered with the SEC. In connection with the stock offering, CRE and Ossie have told investors in conference calls that CRE business operations have been analyzed by an independent firm for estimation of stock Misrepresentations and Omissions 26. CRE and Ossie have been representing to investors, directly and through correspondents, that the ten percent ROI per month retun which is paid to them is produced by profits rom CRE's currency trading. This representation is false. In fact, CRE has lost over $12 million through its currency trading. CRE's program functions as a Ponzi scheme, with "profits" of investors paid rom principal or rom money invested by subsequent investors. 27. CRE and Ossie also represented to investors that the 30 Day Currency Trading program was audited by the Robert Half firm. That statement was false. 28. CRE and Ossie have told investors repeatedly that if all investors requested a return of their principal and ROI, that CRE had sufficient funds on hand to make all of these payments within a thirty day period of time as the contracts matured. In fact, CRE would not be able to repay all of its investors if they requested their principal and ROI back. 29. CRE and Ossie have also represented to potential investors that CRE is planning on making a $100 million stock offering in early 2009, and that the offering will not be registered with the SEC. In connection with the stock offeing, CRE and Ossie have told investors in conference calls that CRE business operations have been analyzed by an independent firm for estimation of stock 8 Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=d9d7c592-adb2-453b-b855-46beedeb21d4and that the firm opined that CRE stock should be worth $40 to $45 per Given that CRE is insolvent, there is no reasonable basis for this statement. and belief, on Friday, January 9,2009, CRE and Ossie on a conference call that CRE could no longer make ROI investors because the SEC had allegedly frozen its accounts. This ONE-FRAUD of Section 17(a)(l) of the Securities Act 115 U.S.C. 6 77q(a)(1)1 3 1. Paragraphs 30 are hereby realleged and are incorporated herein 32. At various times between April 2008 and the present, CRE and Ossie, in with the offer or sale of securities described herein, by the use of the means and instruments interstate commerce and by use of the mails, directly and indirectly: value, and that the firm opined that CRE stock should be worth $40 to $45 per share. Given that CRE is insolvent, there is no reasonable basis for this statement 30. On information and belief, on Fiday, January 9, 2009, CRE and Ossie represented to investors on a conference call that CRE could no longer make ROI payments to investors because the SEC had allegedly rozen its accounts. This statement was false. COUNT ONE-FRAUD Violations of Section 17(a)(1) of the Securities Act [15 U.S.C. § 77q(a)(l)l 31. Paragraphs 1 through 30 are hereby realleged and are incorporated herein by reference. 32. At vaious times between Apil 2008 and the present, CRE and Ossie, in connection with the offer or sale of securities descibed herein, by the use of the means and instruments of interstate commerce and by use of the mails, directly and indirectly: 9 Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=d9d7c592-adb2-453b-b855-46beedeb21d4(a) employed devices, schemes, or artifices to defraud; (b) obtained money or property by means of untrue statements of material facts or omissions of material facts necessary in order to make the light of the circumstances under which they were made, not misleading; or (c) practices, or courses of business which operated or would operate as a fraud or deceit upon the purchasers of securities, all as more particularly described in the paragraphs above. 33. By reason of the foregoing, CRE and Ossie directly and indirectly, and unless restrained and enjoined, will continue to violate Section 17(a)(l) of the Securities Act [15 U.S.C. 5 77q(a)(l)]. TWO-FRAUD Violations of Sections 17(a)(2) and 17(a)(3) Securities Act [15 U.S.C. 6 77q(a)(2) and (a)(3)1 30 are hereby realleged and are incorporated reference. various times between April 2008 and the present, CRE and Ossie, or sale of securities, directly or indirectly, obtained money or property by statements of material facts or omissions of material facts (a) employed devices, schemes, or artifices to deraud; (b) obtained money or property by means of untrue statements of mateial facts or omissions of mateial facts necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading; or (c) engaged in transactions, practices, or courses of business which operated or would operate as a raud or deceit upon the purchasers of secuities, all as more particularly descibed in the paragraphs above. 33. By reason of the foregoing, CRE and Ossie directly and indirectly, violated and unless restrained and enjoined, will continue to violate Section 17(a)(1) of the Securities Act [15 U.S.C. § 77q(a)(l)]. COUNT TWO-FRAUD Violations of Sections 17(a)(2) and 17(a)(3) of the Securities Act [15 U.S.C. § 77q(a)(2) and (a)(3)! 34. Paragraphs 1 through 30 are hereby realleged and are incorporated herein by reference. 35. At vaious times between Apil 2008 and the present, CRE and Ossie, in the offer or sale of secuities, directly or indirectly, obtained money or property by means of untrue statements of material facts or omissions of mateial facts 10 Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=d9d7c592-adb2-453b-b855-46beedeb21d4necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading and/or engaged in transactions, practices, or courses of business which operated as a fraud or deceit upon the purchasers of securities, all as more particularly described above. 36. While engaging in the courses of conduct described above, Defendants CRE and Ossie, directly or indirectly, made use of the mails, or means or instruments of transportation or communication in interstate commerce, or means or instrumentalities of interstate commerce. 37. By reason of the foregoing, Defendants CRE and Ossie violated and, unless restrained and enjoined, will continue to violate Sections 17(a)(2) and 17(a)(3) of the Securities Act [15 U.S.C. §§ 77q(a)(2) and (3)]. COUNT THREE-FRAUD Violations of Section lo@) of the Exchange Act 115 U.S.C. 78i(b)l and Rule lob-5 thereunder I17 C.F.R. 6 240.10b-51 38. The Commission realleges and incorporates by reference the allegations contained in Paragraphs 1 through 30 above. 39. At various times between Apri1'2008 and the present, CRE and Ossie, in connection with the purchase and sale of securities described herein, by the use necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading and/or engaged in transactions, practices, or courses of business which operated as a raud or deceit upon the purchasers of secuities, all as more particularly descibed above. While engaging in the courses of conduct descibed above, Defendants CRE and Ossie, directly or indirectly, made use of the mails, or means or instruments of transportation or communication in interstate commerce, or means or instrumentalities of interstate commerce. By reason of the foregoing, Defendants CRE and Ossie violated and, unless restrained and enjoined, will continue to violate Sections 17(a)(2) and 17(a)(3) of the Secuities Act [15 U.S.C. §§ 77q(a)(2) and (3)]. COUNT THREE-FRAUD Violations of Section 10(b) of the Exchange Act 115 U.S.C. 78i(b)l and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-51 38. The Commission realleges and incorporates by reference the allegations contained in Paragraphs 1 through 30 above. 39. vaious times between Apil 2008 and the present, CRE and Ossie in connection with the purchase and sale of secuities descibed herein, by the use 11 Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=d9d7c592-adb2-453b-b855-46beedeb21d4of the means or instrumentalities of interstate commerce or by use of the mails, or of any facility of any national securities exchange, directly and indirectly: employed devices, schemes, and artifices to defraud; made untrue statements of material facts and omitted to state material facts necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading; and engaged in acts, practices, and courses of business which would and\did operate as a fraud and deceit upon other persons, as more particularly described above. 40. Defendants CRE and Ossie knowingly, intentionally, and/or recklessly engaged in the aforementioned devices, schemes and artifices to defraud, made untrue statements of material facts and omitted to state material facts, and engaged in fraudulent acts, practices and courses of business. In engaging in such conduct, CRE and Ossie acted with scienter, that is, with an intent to deceive, manipulate or defraud or with a severe reckless disregard for the truth. of the means or instrumentalities of interstate commerce or by use of the mails, or of any facility of any national securities exchange, directly and indirectly: (a) devices, schemes, and artifices to deraud; (b) made untrue statements of mateial facts and omitted to state mateial facts necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading; and (c) and courses of business which would and did operate as a raud and deceit upon other persons, as more particularly descibed above. 40. CRE and Ossie knowingly, intentionally, and/or recklessly engaged in the aforementioned devices, schemes and artifices to deraud, made untrue statements of mateial facts and omitted to state mateial facts, and engaged in raudulent acts, practices and courses of business. In engaging in such conduct, CRE and Ossie acted with scienter, that is, with an intent to deceive, manipulate or deraud or with a severe reckless disregard for the truth. 12 Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=d9d7c592-adb2-453b-b855-46beedeb21d441. By reason of the foregoing, defendants CRE and Ossie directly and indirectly violated and, unless restrained and enjoined, will continue to violate Section 10(b) of the Exchange Act [15 U.S.C. §78j(b)] and Rule lob-5 [17 C.F.R. 5 240.1 0b-51 thereunder. PRAYER FOR RELIEF WHEREFORE, the Commission, respectfully prays that the Court: I. Make findings of fact and conclusions of law in accordance with Rule 52 of the Federal Rules of Civil Procedure, finding that Defendants CRE and Ossie committed the violations alleged herein. Issue a temporary restraining order, preliminary and permanent injunctions enjoining defendants, their officers, agents, servants, employees, attorneys, and all persons in active concert or participation with him who receive actual notice of the order by personal service or otherwise, and each of them, from violating Section 17(a) of the Securities Act [15 U.S.C. 5 77q(a)] and Section 10(b) of the Exchange Act [15 U.S.C. 5 78j(b)] and Rule 1 Ob-5 thereunder [ 1 7 C.F.R. 5 240.10b-51. of the foregoing, defendants CRE and Ossie directly and violated and •, and enjoined, will continue to violate 10(b) of the Exchange Act [15 U.S.C. §78j(b)] and Rule 10b-5 [17 C.F.R § 240.10b-5] thereunder. PRAYER FOR RELIEF the Commission, respectfully prays that the Court of fact and conclusions of law in accordance with Rule 52 of Procedure, finding that Defendants CRE and Ossie the violations alleged herein. II. restraining order, preliminary and permanent injunctions defendants, their officers, agents, servants, employees, attoneys, and all concert or participation with him who receive actual notice of the personal service or otherwise, and each of them, rom violating Section 17(a) of the Secuities Act [15 U.S.C. § 77q(a)] and Section 10(b) of the Exchange [15 U.S.C. § 78j(b)] and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5]. 13 Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=d9d7c592-adb2-453b-b855-46beedeb21d4111. requiring an accounting by CRE and Ossie of the proceeds they the scheme alleged in the complaint and ordering the disgorgement ill-gotten gains fi-om the illegal conduct with prejudgment interest. an order pursuant d) of the Securities Act [15 U.S.C. 5 2 1 (d)(3) of the Exchange Act [ 1 5 U.S.C. 5 78u(d)(3)] imposing penalties against the defendants. v. Appoint a for CRE. VI. Grant as this Court may deem just, equitable, and appropriate in connection with the enforcement of the federal securities laws and for the protection Further, the Securities and Exchange Commission respectfblly prays that the Court retain jurisdiction over this action in order to implement the terms of all orders and decrees that are entered or to entertain any or motion by the Commission for additional relief w i t h jurisdiction of ths Cow. III. Issue an order requiing an accounting by CRE and Ossie of the proceeds they collected through the scheme alleged in the complaint and ordeing the disgorgement of all ill-gotten gains rom the illegal conduct with prejudgment interest. IV. Issue an order pursuant to Section 20(d) of the Securities Act [15 U.S.C. § 77t(d)] and Section 21(d)(3) of the Exchange Act [15 U.S.C. § 78u(d)(3)] imposing civil penalties against the defendants. V Appoint a Receiver for CRE. VI Grant such other and further relief as this Court may deem just, equitable, and appropiate in connecion with the enforcement of the federal secuities laws and for the protection of investors. Further, the Secuities and Exchange Commission respectfully pr^ys that the Court retain juisdiction over this action in order to implement and carry out the terms of all orders and decrees that are entered or to entertain any suitable application or motion by the Commission for additional relief within the juisdiction of this Court. 14 Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=d9d7c592-adb2-453b-b855-46beedeb21d4DATED: January 15,2009 RESPECTFULLY SUBMITTED, Georgia Bar No. 35 1649 REGIONAL TRIAL COUNSEL Alana R. Black Georgia Bar No. 785045 SENIOR TRIAL COUNSEL C d a qI b hawn Mumahan L3 Georgia Bar No. 529940 STAFF ATTORNEY COUNSEL FOR PLAINTIFF U. S. SECURITIES AND EXCHANGE COMMISSION 3475 Lenox Road, N.E., Suite 1000 Atlanta, Georgia 30326-1234 (404) 842-7600 Fax: (404) 842-7666 DATED: January 15,2009 RESPECTFULLY SUBMITTED, William P. Hicks Georgia Bar No. 351649 REGIONAL TRIAL COUNSEL Alana R. Black Georgia Bar No. 785045 SENIOR TRIAL COUNSEL \KAJU6oO (^J^c/Shawn Murnal han Georgia Bar No. 529940 STAFF ATTORNEY COUNSEL FOR PLAINTIFF U. S. SECURITIES AND EXCHANGE COMMISSION 3475 Lenox Road, N.E., Suite 1000 Atlanta, Georgia 30326-1234 (404) 842-7600 Fax: (404) 842-7666 15 Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=d9d7c592-adb2-453b-b855-46beedeb21d4