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U.S. Securities and Exchange Commission

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO

Civil Action No. ___________

SECURITIES AND
EXCHANGE COMMISSION,

Plaintiff,

v.

AMERICAN PROMETHEUS CORP.,
JAMES P. NORVILLE AND
MABEL R. NORVILLE,

Defendants.


COMPLAINT FOR PERMANENT INJUNCTION
AND OTHER EQUITABLE RELIEF


Plaintiff Securities and Exchange Commission ("Commission") alleges the following for its complaint:

I. SUMMARY OF THE ACTION

1. James P. Norville and his wife, Mabel R. Norville, formed American Prometheus Corporation and a related entity, American Prometheus Limited Partnership, in 1996 purportedly to develop a hotel and casino in Central City, Colorado.

2. Between April 1997 and April 2000, the Norvilles offered more than $3.6 million in unregistered American Prometheus securities and raised approximately $1.1 million from investors through a series of purported private placement offerings and through the Norvilles' sale of more than 900,000 shares of American Prometheus stock that they owned.

3. In American Prometheus' offering materials and in presentations to investors, the Norvilles made numerous material misrepresentations and omissions, including touting James Norville's successful career in finance while failing to disclose: (1) that criminal securities fraud charges were pending against him as of April 1998 relating to one of the Norvilles' previous companies; (2) his subsequent guilty plea in August 1999 to one count of securities fraud; or (3) the existence of a 1995 administrative order prohibiting him from selling securities in Wisconsin.

4. The Norvilles further represented in American Prometheus' offering materials and in presentations to investors that the proceeds from the sale of American Prometheus securities would be used to develop the hotel and casino in Central City. These representations were false and misleading because the Norvilles misappropriated funds raised from American Prometheus investors for their personal use and to repay themselves for purported loans they had made to the company.

5. American Prometheus has engaged in, and unless restrained and enjoined by this Court will engage in, transactions, acts, practices, and courses of business that violate Sections 5(a), 5(c) and 17(a) of the Securities Act of 1933 ("Securities Act") [15 U.S.C. §§ 77e(a), (c) and 77q(a)] and Section 10(b) of the Securities Exchange Act of 1934 ("Exchange Act") and Rule 10b-5 thereunder [15 U.S.C. § 78j(b)] and [17 C.F.R. § 240.10b-5].

6. James Norville and Mabel Norville have engaged in, and unless restrained and enjoined by this Court will engage in, transactions, acts, practices, and courses of business that violate Sections 5(a), 5(c) and 17(a) of the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder .

7. The Commission brings this action pursuant to the authority conferred upon it by Sections 21(d) and (e) of the Exchange Act [15 U.S.C. Sections 78u(d) and (e)] for an order permanently restraining and enjoining each of the defendants and granting other relief.

II. JURISDICTION AND VENUE

8. This Court has jurisdiction over this action pursuant to Section 22(a) of the Securities Act [15 U.S.C. Section 77v(a) and Sections 21(e) and 27 of the Exchange Act [15 U.S.C. Sections 78u(e) and 78aa].

9. Each of the defendants, directly and indirectly, have made use of the means or instrumentalities of interstate commerce, or of the mails, in connection with the acts, practices, and courses of business alleged in this complaint.

10. Venue properly lies in this Court pursuant to Section 22(a) of the Securities Act and Section 27 of the Exchange Act.

11. American Prometheus' principal place of business is located in this judicial district, and Mabel R. Norville resides in this judicial district. Certain of the transactions, acts, practices and courses of business constituting the violations of law alleged herein occurred within this judicial district.

III. DEFENDANTS

12. American Prometheus Corp. is a Minnesota corporation with its principal place of business in Central City, Colorado. American Prometheus Corp.'s securities offerings were never registered with the Commission, have never been listed on any exchange and the company has never filed periodic reports with the Commission.

13. James P. Norville, a former resident of Central City, Colorado, is currently incarcerated in state prison in Winnebago, Wisconsin. James Norville served as president and chairman of the board of directors of American Prometheus Corp. from its incorporation in February 1996 until he resigned in September 1999 as part of his plea agreement in a Wisconsin state criminal securities fraud case. James and Mabel Norville also controlled American Prometheus Limited Partnership throughout its existence from September 1996 through June 1999.

14. Mabel R. Norville, James Norville's wife, is a resident of Central City, Colorado. Mabel Norville has served as a director and as the secretary and treasurer of American Prometheus Corp. since its inception. As the company's treasurer, Mabel Norville has had sole authority over American Prometheus' bank accounts.

IV. FACTUAL ALLEGATIONS

The Norvilles Formed the American Prometheus Entities

15. The Norvilles formed American Prometheus Corporation in February 1996. Upon its formation, the Norvilles were the sole owners of American Prometheus. James Norville served as the company's president and chairman of the board of directors, while Mabel Norville served as the company's secretary and as a director. Initially, the Norvilles were the only officers and directors of the company. The company has never had any employees.

16. In September 1996, the Norvilles formed American Prometheus Limited Partnership, a Colorado limited partnership. The Norvilles made American Prometheus Corp. the general partner of American Prometheus Limited Partnership. Both the corporation and the limited partnership claimed to be developing the hotel and casino in Central City.

The Norvilles Offered American Prometheus' Securities

17. Between April and June 1997, the Norvilles offered $800,000 of American Prometheus Limited Partnership interests. The Norvilles raised approximately $320,000 on behalf of the limited partnership in this offering. This limited partnership offering was not registered with the Commission and was not exempt from registration.

18. Between October 1997 and June 1998, the Norvilles offered an additional $400,000 of American Prometheus Limited Partnership interests. The Norvilles raised approximately $130,000 in this offering. This offering was not registered with the Commission and was not exempt from registration.

19. The Norvilles prepared and disseminated the private placement memoranda and other offering materials used in both American Prometheus Limited Partnership offerings, and solicited prospective investors for the offerings.

20. In July 1998, the Norvilles provided the limited partnership investors with the option to either convert their limited partnership interests to stock in American Prometheus Corp. or to receive a promissory note from American Prometheus Corp. paying 10 percent annual interest. The majority of the limited partnership investors elected to become shareholders of the company. American Prometheus Corp. never repaid any principal or interest to those investors who converted their limited partnership interests into promissory notes.

21. From February 1999 through November 1999, the Norvilles offered $1.6 million of American Prometheus stock. The Norvilles raised approximately $325,000 on behalf of the company in this offering. The offering was not registered with the Commission and was not exempt from registration.

22. During December 1999, the Norvilles offered an additional 400,000 shares of American Prometheus stock in another purported private placement offering. The Norvilles raised approximately $45,000 on behalf of the company in this offering. This offering was not registered with the Commission and was not exempt from registration.

23. The Norvilles prepared and disseminated the American Prometheus Corp. offering materials, and solicited prospective investors to purchase the stock.

24. Between November 1997 and April 2000, the Norvilles also sold more than 900,000 shares of their own American Prometheus stock to investors, raising approximately $364,000. The Norvilles represented that all funds raised from the sales of their stock were immediately loaned to the corporation. However, the Norvilles did not document their purported loans to American Prometheus. None of these transactions were registered with the Commission or were exempt from registration.

25. In connection with these transactions involving American Prometheus stock, Mabel Norville issued share certificates, maintained shareholder records and performed tasks typically completed by a stock transfer agent.

The Norvilles and American Prometheus Made Material Misrepresentations and Omissions Respecting James Norville's Criminal and Regulatory History

26. The state of Wisconsin charged James Norville with securities fraud in connection with a similar land development project before the Norvilles formed the American Prometheus entities. According to that criminal complaint, James Norville raised over $1 million from Wisconsin investors by selling unregistered limited partnership interests and stock in two other companies between September 1991 and December 1993. Both companies purported to be developing a strip mall (later changed to a hotel and casino) in northern Wisconsin.

27. In connection with these earlier sales of securities, James Norville misrepresented to investors that, among other things, a large securities firm had already agreed to be the underwriter for the initial public offerings. However, after obtaining funds from investors, he misappropriated cash and used other investor funds to pay personal expenses.

28. Wisconsin charged James Norville with felony securities fraud in April 1998 in connection with these earlier sales of securities.

29. Wisconsin also entered an administrative order prohibiting James Norville from selling securities in 1995.

30. In August 1999, James Norville pled no contest to one count of securities fraud in a plea agreement. In connection with that plea agreement he agreed to resign as an officer and director of American Prometheus Corp.

31. Although American Prometheus' offering materials and the Norvilles' presentations to prospective investors touted James Norville's purportedly successful career as a financier and businessman, they failed to disclose the felony securities fraud charges pending against him in Wisconsin as of April 1998. Furthermore, the Norvilles and the company failed to disclose to investors that in August 1999, James Norville had pled no contest to one count of securities fraud and was free on bail pending sentencing. Finally, the Norvilles and the company did not disclose in the offering materials or investor presentations that Wisconsin had entered an administrative order in 1995 prohibiting James Norville from selling securities in that state.

32. The Norvilles and the company also actively concealed the criminal case against James Norville by misrepresenting to investors that their trips to Wisconsin for his court appearances were for the "family business" and, later, that his resignation as president and director of American Prometheus was prompted by "personal and health" reasons. After James Norville's incarceration, Mabel Norville continued to sell American Prometheus stock, falsely telling investors that he had gone to prison because he had failed to disclose a "thirty-five year old net capital violation."

The Norvilles and American Prometheus Made Material Misrepresentations and Omissions Respecting The Use of Proceeds From the Securities Offerings

33. In American Prometheus' offering materials and in presentations to investors, the Norvilles and the company falsely represented that investor funds would be used primarily for two purposes: (1) to purchase and develop the land for the hotel and casino; and (2) for expenses to register the stock with the Commission and to conduct an initial public offering. The offering materials did not state that investor funds would be used for the repayment of loans from the Norvilles.

34. The use of proceeds section in various American Prometheus offering materials disclosed that between $50,000 and $303,000 was being set aside for "working capital." However, the offering materials were false and misleading because none of the materials disclosed that investor funds would be diverted for the Norvilles' personal use or for the repayment of purported loans from the Norvilles.

35. The Norvilles took approximately $401,000 of investor funds from American Prometheus. Mabel Norville wrote approximately $255,000 in checks from the company's bank accounts to James Norville. The Norvilles also withdrew approximately $59,000 in cash from ATMs from the company's bank accounts. Finally, Mabel Norville caused the company to pay more than $87,000 for Norville's personal expenses, including paying rent for their residences, maintenance for their vehicles and travel expenses.

36. Throughout their tenure as officers and directors of American Prometheus, the Norvilles maintained deficient bank account and financial records as well as commingled personal funds with funds raised from American Prometheus' securities offerings.

37. By May 2000, American Prometheus ceased making mortgage payments on the land purportedly to be used for the Central City hotel and casino. In November 2000, the bank foreclosed upon American Prometheus' land.

FIRST CLAIM FOR RELIEF

American Prometheus Corp., James Norville and Mabel Norville Violated
Section 10(b) of the Exchange Act and Rule 10b-5 thereunder

38. Plaintiff realleges and incorporates by reference paragraphs 1 through 37 above.

39. American Prometheus Corp., James Norville and Mabel Norville, directly and indirectly, by use of the means and instrumentalities of interstate commerce, of the mails or of the facilities of a national securities exchange, in connection with the purchase or sale of American Prometheus securities, with scienter: (1) employed devices, schemes, or artifices to defraud; (2) made untrue statements of material fact, or omitted to state material facts necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading; or (3) engaged in acts, practices or courses of business which have operated as a fraud or deceit upon purchasers or sellers of securities or upon other persons.

40. By reason of the foregoing acts, practices, and courses of business, American Prometheus Corp., James Norville and Mabel Norville violated Exchange Act Section 10(b) and Rule 10b-5, and unless restrained and enjoined will continue to do so.

SECOND CLAIM FOR RELIEF

American Prometheus Corp., James Norville and Mabel Norville Violated
Section 17(a)(1)) of the Securities Act

41. Plaintiff realleges and incorporates by reference paragraphs 1 through 37 above.

42. American Prometheus Corp., James Norville and Mabel Norville, in the offer or sale of securities, by use of the means and instruments of transportation and communication in interstate commerce and by use of the mails, directly and indirectly, with scienter employed devices, schemes or artifices to defraud, in violation of Section 17(a)(1).

43. By reason of the foregoing, Defendants American Prometheus Corp., James Norville and Mabel Norville have violated, are violating, and unless enjoined, will continue to violate Sections 17(a)(1) of the Securities Act.

THIRD CLAIM FOR RELIEF

American Prometheus Corp., James Norville and Mabel Norville Violated
Sections 17(a)(2) and (3) of the Securities Act

44. Plaintiff realleges and incorporates by reference paragraphs 1 through 37 above.

45. American Prometheus Corp., James Norville and Mabel Norville, in the offer or sale of securities, by use of the means and instruments of transportation and communication in interstate commerce and by use of the mails, directly and indirectly: (1) have obtained, are obtaining or are about to obtain money or property by means of untrue statements of material fact and omissions to state material facts necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading; or (2) have engaged, are engaged, or are about to engage in transactions, acts, practices and courses of business that operated or would operate as a fraud upon purchasers of securities.

46. By reason of the foregoing, American Prometheus Corp., James Norville and Mabel Norville have violated, are violating, and unless enjoined, will continue to violate Sections 17(a)(2) and (3) of the Securities Act.

FOURTH CLAIM FOR RELIEF

American Prometheus, James Norville and Mabel Norville Violated Sections 5(a) and 5(c) of the Securities Act

47. Plaintiff realleges and incorporates by reference paragraphs 1 through 37 above.

48. American Prometheus, James Norville and Mabel Norville, directly and indirectly, and notwithstanding that there was no applicable exemption: (i) made use of means or instruments of transportation or communication in interstate commerce or of the mails to sell, through the use or medium of a prospectus or otherwise, securities as to which no registration statement was in effect; (ii) for the purpose of sale or delivery after sale, carried and/or caused to be carried through the mails or in interstate commerce, by means or instruments of transportation, securities as to which no registration statement was in effect; and (iii) made use of means or instruments of transportation or communication in interstate commerce or of the mails to offer to sell, through the use or medium of a prospectus or otherwise, securities as to which no registration statement had been filed, in violation of Sections 5(a) and 5(c) of the Securities Act.

49. By reason of the foregoing, American Prometheus, James Norville and Mabel Norville have violated, and unless enjoined, will continue to violate Sections 5(a) and 5(c) of the Securities Act.

RELIEF REQUESTED

Wherefore, the Commission respectfully requests that the Court:

I.

Find that the defendants, and each of them, committed the violations alleged.

II.

Enter a Permanent Injunction as to American Prometheus, James Norville and Mabel Norville restraining and enjoining them, and each of them, and their officers, agents, servants, employees, attorneys, and those persons in active concert or participation with them who receive actual notice by personal service or otherwise, from violating Section 10(b) of the Exchange Act and Rule 10b-5.

III.

Enter a Permanent Injunction as to American Prometheus, James Norville and Mabel Norville restraining and enjoining them, and each of them, and their officers, agents, servants, employees, attorneys, and those persons in active concert or participation with them who receive actual notice by personal service or otherwise, from violating Section 17(a) of the Securities Act.

IV.

Enter a Permanent Injunction as to American Prometheus, James Norville and Mabel Norville, restraining and enjoining them, and each of them, and their officers, agents, servants, employees, attorneys, and those persons in active concert or participation with them who receive actual notice by personal service or otherwise, from violating Sections 5(a) and 5(c) of the Securities Act.

V.

Order James Norville and Mabel Norville to account for and disgorge all ill-gotten gains received or benefits in any form derived from the illegal conduct alleged in this complaint, together with pre-judgment and post-judgment interest as provided by law.

VI.

Order James Norville and Mabel Norville to pay civil money penalties pursuant to Section 20(d) of the Securities Act and Section 21(d)(3) of the Exchange Act.

VII.

Enter Orders barring James Norville and Mabel Norville from serving as officers or directors of any publicly held company.

VIII.

Enter Orders barring James Norville and Mabel Norville from participating in an offering of penny stock.

IX.

Grant such other relief as this Court may deem just or appropriate.

Dated: August 15, 2002

Respectfully submitted,

/s/

___________________________
Thomas D. Carter
Kurt L. Gottschall
Attorneys for Plaintiff
Securities and Exchange Commission
1801 California Street, Suite 1500
Denver, Colorado 80202
(303) 844-1000


http://www.sec.gov/litigation/complaints/comp17682.htm

Modified: 08/15/2002