Opinion ID: 200195
Heading Depth: 2
Heading Rank: 2

Heading: Fife's Involvement

Text: 4 Fife agreed to manage and invest Brite Business funds, in return for which he would receive a commission. In the SEC investigation, Fife testified that his duties were to administer the bank accounts that [he] had signatory power over and to develop a balance sheet enhancement program with leverage[d] funds sent in to be used for financial projects. 1 Fife's balance sheet enhancement program involved pooling investors' money and then leveraging the money by purchasing treasury bills in order to qualify for third world development projects. The profits from the investment in the third world development projects would then be distributed to the investors. Fife claimed that investors would make returns of between 30 and 100 percent per year. These returns, however, were not guaranteed because of risks involved. 5 In October 1999, Fife established a brokerage account at the Rhode Island branch office of Raymond James Financial Services, Inc. (Raymond James), a securities broker-dealer, in the name of Brite Corp. Fife was the signatory on the account, and Fife's acquaintance, Dennis S. Herula (Herula), was the designated registered representative. Approximately $44.5 million of the $51.75 million raised for Brite Corp. was deposited into this account. 2 6 Mary Lee Capalbo (Capalbo), an attorney and the wife of Herula, established a separate brokerage account at Raymond James entitled the Mary Lee Capalbo Esq. Special Client Account (Capalbo Account). Capalbo was the signatory on this account. Fife transferred $15.5 million from the Brite account at Raymond James into the Capalbo Account at Raymond James. These transfers occurred through five transactions between April 2000 and September 2000. 3 After these transfers, $29 million remained in the Brite Account at Raymond James under Fife's supervision. 7 Of the $29 million remaining in the Brite account at Raymond James, $27.3 million was returned to investors. 4 Approximately $20.5 million in principal plus promised return allegedly has been lost. Al Bloushi has received only $200,000 of his $5 million investment, and Rheaume has received only $4,500 from its $12.5 million investment. 5 As of September 18, 2000, all of the investment money under Fife's control in the Brite Account at Raymond James had been transferred out. The money deposited in the Capalbo Account was used to purchase shares in a money market mutual fund. An additional investor, Monlezun, invested $1 million raising the total amount of investor funds in the Capalbo Account at Raymond James to $16.5 million. 6 Monlezun received only $125,000 from his $1 million investment. 8 From June 2000 to November 2000, $8 million of Brite investor funds was paid to various entities including Seaview, 7 Tamini, 8 Sullivan, 9 Puffin, 10 Brite, Commonwealth, Four Star, 11 and Al Bloushi. Additional transfers in the amount of $8.6 million were made to the Mary Lee Capalbo Special Client Account at Citizens Bank.