Countryland Wellness Resorts, Inc.

Securities Exchange Act of 1934
Release No. 43788 / January 3, 2001

Administrative Proceeding
File No. 3-10314

___________________________________ In the Matter of Countryland Wellness Resorts, Inc.,      Respondent. ___________________________________

: : : : : : :

ORDER MAKING FINDINGS AND REVOKING REGISTRATION OF SECURITIES PURSUANT TO SECTION 12(j) OF THE SECURITIES EXCHANGE ACT OF 1934

I.

On September 27, 2000, the Securities and Exchange Commission ("Commission") instituted this administrative proceeding pursuant to Section 12(j) of the Securities Exchange Act of 1934 ("Exchange Act") against Countryland Wellness Resorts, Inc. ("Countryland" or "Respondent") to determine whether to revoke the registration of Countryland's securities.

II.

Countryland has submitted an Offer of Settlement ("Offer"), which the Commission has determined to accept. Solely for the purpose of this proceeding and any other proceedings brought by or on behalf of the Commission or in which the Commission is a party, and without admitting or denying the findings contained herein, except that Countryland admits the jurisdiction of the Commission over it and over the subject matter of this proceeding, Countryland consents to the entry of this Order Making Findings and Revoking Registration of Securities Pursuant to Section 12(j) of the Securities Exchange Act of 1934 ("Order") as set forth below.

III.

The Commission makes the following findings:

A. Countryland is a Delaware corporation most recently incorporated in 1999. Countryland's common stock has been registered pursuant to Section 12(g) of the Exchange Act since July 13, 1992, when its Form 20-F went effective (SEC File No. 0-20217).

B. From 1996 to the present, Countryland, in the offer and sale and in connection with the purchase and sale of Countryland common stock, directly or indirectly, employed devices, schemes and artifices to defraud; made untrue statements of material fact or omitted to state material facts necessary to make the statements made, in light of the circumstances under which they were made, not misleading; and engaged in acts, transactions, practices or courses of business which operated or would have operated as a fraud or deceit upon purchasers of Countryland common stock, as follows:

1. In periodic reports filed with the Commission in 1996 through 1999, Countryland falsely reported as an asset gold stored in a warehouse or exchanged for a negotiable warehouse receipt valued from $19.5 to $27.3 million. The purported "gold" was, in fact, dirt that contained no more than trace amounts (0.151 ounce per ton) of gold. Because the material stored at the warehouse was not gold, Countryland's reporting of it as an asset at any time and at any value was improper under Generally Accepted Accounting Principles ("GAAP").

2. a. In periodic reports filed with the Commission from 1997 to 2000, Countryland fraudulently reported as an asset "proven gold and silver reserves" from mining claims. Countryland reported on its balance sheet that these purported reserves were an asset at values ranging from $1.2 to $2.1 billion. While Countryland does hold title to several mining claims, it lacked sufficient information to support their valuation at over $1 billion. Specifically, Countryland's only basis for its valuation of the "proven" reserves asset was a geologist's report prepared in 1985 that stated that insufficient analysis had been performed for full evaluation of the property and that extensive work needed to be done to determine the amount and value of the minerals that were recoverable. Countryland did not report the proven reserves asset in accordance with GAAP because under GAAP, costs incurred to acquire property must be capitalized when incurred and Countryland possessed no supporting documents justifying costs incurred to acquire the property. As a result, Countryland should have reported these assets at a negligible amount or zero.

b. Countryland's proven reserves asset also does not meet the definition of a reserve under Regulation S-K. Regulation S-K defines reserve as that part of a mineral deposit that could be economically and legally extracted at the time of the determination. 17 C.F.R. § 229.801. Given the lack of information evidencing the proven reserves, Countryland had no basis to determine whether any minerals could be economically recovered. Nevertheless, Countryland baselessly reported these reserves at $1.2 to $2.1 billion.

c. In its quarterly reports for the first and second quarters of 2000, Countryland reported assets of $2.7 billion consisting of $300 million in cash and $2.4 billion in "cash equivalents." In the footnotes to its financial statements, Countryland falsely represented that it sold its mining interests (the proven reserves) to the "Dominion of Melchizedek" ("DOM") for $2.418 billion in Treasury Bills issued by the DOM in addition to $300 million DOM dollars which Countryland used to acquire a five year certificate of deposit issued by the DOM state owned bank. In fact, the Dominion of Melchizedek does not exist.

3. In its periodic reports filed in 1998 and 1999, and in a registration statement, Countryland improperly reported as an asset $1.1 billion of Indonesian bank guarantees. Similarly, Countryland reported in its third quarter 1999 Form 10-Q and its 1999 amended Form S-1 registration statement that the bank guarantees were an asset valued at $400 million. The bank guarantees in fact never existed.

4. The amended registration statement includes an unqualified audit report dated April 23, 1999 from Countryland's outside auditor and a consent from the outside auditor to the use of the audit report regarding the company's financial statements dated as of and for the year ended December 31, 1998. In fact, the outside auditor never issued an unqualified audit report for the December 31, 1998 period, but rather, he issued a qualified report for this period. Moreover, on May 3, 1999, the outside auditor withdrew his authorization to Countryland to use the April 23, 1999, qualified audit report.

C. Countryland also lacks adequate internal controls, because it maintains no accounting system whatsoever to record company transactions.

D. Countryland has failed to comply with Section 17(a) of the Securities Act and Sections 10(b), 13(a), 13(b)(2)(A) and 13(b)(2)(B) of the Exchange Act and Rules 10b-5, 12b-20, 13a-1, 13a-13, and 13b2-1 thereunder while its common stock was registered with the Commission because Countryland materially misrepresented its financial condition, and lacks required internal controls, as set forth above.

IV.

In view of the foregoing, the Commission deems it necessary and appropriate for the protection of investors to impose the remedial sanction consented to by Countryland in its Offer.

Accordingly, IT IS ORDERED that the Form 20-F registration of Countryland's securities is revoked, effective immediately.

By the Commission.

Jonathan G. Katz
Secretary