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U.S. Securities and Exchange Commission

UNITED STATES OF AMERICA
before the
SECURITIES AND EXCHANGE COMMISSION

Securities Exchange Act of 1934
Release No. 46173 / July 9, 2002

Administrative Proceeding
File No. 3-10822


In the Matter of

Raphael "Ray" Levy,

Respondent.


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ORDER INSTITUTING ADMINISTRATIVE PROCEEDINGS PURSUANT TO SECTION 15(b) OF THE SECURITIES EXCHANGE ACT OF 1934, MAKING FINDINGS AND IMPOSING REMEDIAL SANCTIONS

I.

The Securities and Exchange Commission ("Commission") deems it appropriate and in the public interest that public administrative proceedings be instituted pursuant to Section 15(b) of the Securities Exchange Act of 1934 ("Exchange Act") against Respondent Raphael "Ray" Levy ("Respondent Levy").

II.

In anticipation of the institution of these proceedings, Respondent Levy has submitted an Offer of Settlement ("Offer") for the purpose of resolving these proceedings, which Offer the Commission has determined to accept. Solely for the purpose of these proceedings and any other proceedings brought by or on behalf of the Commission or to which the Commission is a party, Respondent Levy, by his Offer, consents to the entry of this Order Instituting Administrative Proceedings Pursuant to Section 15(b) of the Securities Exchange Act of 1934, Making Findings and Imposing Remedial Sanctions ("Order"), admits the jurisdiction of the Commission over him and, without admitting or denying the findings set forth herein, except with respect to paragraphs III.A. and III.D., below, which are admitted, consents to the entry of the findings and remedial sanctions set forth below.

Accordingly, it is ordered that proceedings pursuant to Section 15(b) of the Exchange Act be, and hereby are, instituted.

III.

On the basis of Respondent Levy's Offer, the Commission finds that:

  1. At all relevant times, Respondent Levy was associated as president and sole shareholder of American Benefits Services, Inc. ("ABS"), an unregistered broker-dealer.

  2. From approximately 1996 through July 1999, ABS engaged in the unregistered distribution of investment contracts in the death benefits of life insurance policies known as "viatical settlements," raising up to $130 million from approximately 5000 investors nationwide.

  3. On May 8, 2000, the Commission filed a Complaint in the United States District Court for the Southern District of Florida captioned, S.E.C. v. Frederick C. Brandau, et al., Civil Action No. 00-06618 (S.D. Fla.) alleging, among other things, that Levy, while operating ABS, an unregistered broker-dealer, defrauded investors by misrepresenting material facts concerning the nature and safety of the investment contracts offered by ABS. Specifically, the Complaint alleged that ABS operated a Ponzi scheme using new investor funds to make payments to existing investors and failed to purchase the underlying life insurance policies that purportedly backed the investment contracts.

  4. On July 1, 2002, a final judgment of permanent injunction was entered against Respondent Levy. The final judgment permanently enjoined Levy from violating Sections 5(a), 5(c) and 17(a) and of the Securities Act of 1933 and Sections 10(b) and 15(a) of the Exchange Act and Rule 10b-5 thereunder. Levy consented to the entry of the Final Judgment without admitting or denying the allegations contained in the Commission's Complaint.

IV.

In view of the foregoing, the Commission deems it appropriate and in the public interest to impose the sanctions specified in Respondent's Offer.

ACCORDINGLY, IT IS ORDERED that Respondent Levy is hereby barred from association with any registered broker or dealer.

For the Commission, by its Secretary, pursuant to delegated authority.

Jonathan G. Katz
Secretary

http://www.sec.gov/litigation/admin/34-46173.htm


Modified: 07/10/2002