UNITED STATES OF AMERICA before the SECURITIES AND EXCHANGE COMMISSION Securities Exchange Act of 1934 Release No. 39161 / September 30, 1997 Administrative Proceeding File No. 3-9463 ______________________________ : In the Matter of : ORDER INSTITUTING PUBLIC : ADMINISTRATIVE PROCEEDINGS DIVERSIFIED CAPITAL : PURSUANT TO SECTION 15(b) OF RESOURCES, INC. AND : THE SECURITIES EXCHANGE ACT ANGEL LORIE : OF 1934, MAKING FINDINGS AND Respondents. : IMPOSING REMEDIAL SANCTIONS : ______________________________: I. The Securities and Exchange Commission deems it appropriate and in the public interest that administrative proceedings be instituted against Diversified Capital Resources, Inc. ("Diversified) and Angel Lorie ( Lorie ) (collectively "Respondents"), pursuant to Section 15(b) of the Securities Exchange Act of 1934 ("Exchange Act"). In anticipation of the institution of these proceedings, Respondents have submitted an Offer of Settlement ("Offer) which the Commission has determined to accept. Solely for the purpose of these proceedings and any other proceeding brought by or on behalf of the Commission or in which the Commission is a party, and without admitting or denying any of the findings contained herein, except as to the jurisdiction of the Commission over them and over the subject matter of these proceedings, and as to the findings contained in Section II., paragraphs A. and G., which are admitted, Respondents consent to the entry by the Commission of this Order Instituting Public Administrative Proceedings Pursuant to Section 15(b) of the Exchange Act of 1934, Making Findings and Imposing Remedial Sanctions. ("Order"). Accordingly, IT IS HEREBY ORDERED that proceedings against Respondents hereby are instituted. ======END OF PAGE 1====== II. On the basis of this Order and the Offer, the Commission finds<(1)> that: A. Diversified has never been registered with the Commission as a broker-dealer or in any other capacity. B. Lorie was at all relevant times the president and sole owner of Diversified. During the relevant time period, Lorie possessed, directly or indirectly, the power to direct or control, or cause the direction or control of, and directed or controlled, the management and policies of Diversified. C. VDS Enterprises, Inc. ("VDS") was at all relevant times a reporting company registered with the Commission pursuant to Section 12 of the Exchange Act. In June 1994, prior to VDS becoming a reporting company, All American Environmental Funding Corporation ("All American"), a privately held corporation, engaged in a reverse merger with VDS. Before the reverse merger, VDS had been a shell corporation that had conducted no business and that had assets of under $1,000. <(2)> D. VDS/All American s common stock was a penny stock as defined by the Exchange Act and rules promulgated thereunder at all times that it was being sold by Diversified and Lorie. E. On September 29, 1997, the Commission filed a complaint in the United States District Court for the Southern District of Florida, SEC v. VDS Enterprises, Inc., Civil Action No. 97-3111-CIV-MOORE (S. D. Fla. September 29, 1997), against, among others, Diversified and Lorie (the Complaint ). The Complaint charged Defendants Diversified and Lorie with violations of certain <(1)> The findings herein are made pursuant to Respondents Offer and are not binding on any other person or entity in these or any other proceedings. <(2)> By the terms of the reverse merger, All American should have ceased to exist and been succeeded by VDS. However, Diversified continued to refer to All American in communications with prospective investors and investors. Thus, the factual description herein will refer to the corporate issuer as VDS/All American. ======END OF PAGE 2====== provisions of the antifraud and broker-dealer registration provisions of the federal securities laws. F. The Commission's Complaint alleged, among other things, as follows: a. Between July and November 1994, VDS/All American, with the active participation of Diversified and Lorie, solicited investments in VDS/All American from citizens of Spain. During that period of time, Defendants VDS, All American, Diversified and Lorie fraudulently offered and sold approximately $2.7 million worth of VDS stock to Spanish citizens. b. The centerpiece of the sales effort was a Business Profile provided to most investors which was the sole source of information about VDS/All American and which contained material misrepresentations and an omission of a material fact, including the following: (1) misrepresenting that VDS/All American owned Cotechnica, Inc. ("Cotechnica"), a solid waste collection and disposal business in Venezuela, when, in fact, Cotechnica was never acquired by VDS/All American; (2) misrepresenting that VDS/All American s environmental clean- up business, combined with Cotechnica s solid waste collection and disposal business, had anticipated annual combined revenues of $45 - $50 million, when, in fact, such anticipated revenues were baseless; (3) misrepresenting that as of August 30, 1994, VDS/All American had assets of $16,343,371, thereby overstating VDS/All American s assets by at least 300%; (4) misrepresenting that as of August 30, 1994, VDS/All American had shareholder equity of $14,751,412, thereby overstating VDS/All American s shareholder equity by at least 150%; (5) misrepresenting that VDS/All American had service contracts for $100 million worth of environmental clean-up work, thereby overstating the total amount of such contracts by at least 800%; (6) misrepresenting that VDS/All American became a publicly traded company in June 1994 when, in fact, VDS/All American had never been approved for trading on the bulletin board, pink sheets, or any other comparable trading medium; and (7) failing to disclose that Diversified received commissions from the sale of VDS stock. G. On June 20, 1997, without admitting or denying any of the allegations contained in the Commission's Complaint, except as to jurisdiction, Diversified and Lorie consented to the entry of a final judgment of permanent injunction. On September 30, 1997, the Court ======END OF PAGE 3====== permanently enjoined Diversified and Lorie from future violations of Sections 15(a)(1), 17(a)(2) and 17(a)(3) of the Exchange Act. III. Based on the foregoing, the Commission deems it appropriate and in the public interest to accept the Offer submitted by Diversified and Lorie, and accordingly, IT IS HEREBY ORDERED, that: A. Diversified and Lorie are hereby barred from participating in any offering of a penny stock, including: (i) acting as a promoter, finder, consultant, or other person who engages in actions with a broker, dealer or issuer for purposes of the issuance or trading in any penny stock; or (ii) inducing or attempting to induce the purchase or sale of any penny stock. B. Lorie is barred from association with any broker, dealer, municipal securities dealer, investment adviser or investment company. By the Commission. Jonathan G. Katz Secretary ======END OF PAGE 4======