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U.S. Securities and Exchange Commission

Thomas M. Piccone (Colo. Attorney Reg. No. 17003)
Michael R. MacPhail (Colo. Attorney Reg. No. 026382)
Kelli Farrand Chan (Colo. Attorney Reg. No. 19756)
Securities and Exchange Commission
1801 California Street, Suite 1500
Denver, Colorado 80202
Telephone No.: (303) 844-1000
Facsimile: (303) 844-1068
Attorneys for Plaintiff

Blaine T. Welsh
(Nev. Attorney Reg. No. 4790)
United States Attorney's Office
333 Las Vegas Boulevard, Suite 5000
Las Vegas, Nevada 89101
Telephone No.: (702) 388-6336
Facsimile: (702) 388-6787
Associate Resident Counsel

IN THE UNITED STATES DISTRICT COURT
DISTRICT OF NEVADA

Securities and Exchange Commission,

Plaintiff,

v.

Homer T. Langrill and
Thomas W. Becker,

Defendants.


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Case No. CV-S-__________________

COMPLAINT

Plaintiff Securities and Exchange Commission ("Commission"), for its Complaint, alleges as follows:

I.

SUMMARY

1. This case involves a fraudulent scheme to inflate the price of the stock of a publicly traded microcap company, Greater Northwest Research & Development Group, Inc. ("Greater Northwest"), through false and misleading public statements, and to conceal that Greater Northwest was controlled by Homer T. Langrill ("Langrill"), a fraud recidivist with multiple felony convictions.

2. Between January 30 and late June 2002, Langrill, Greater Northwest and Thomas W. Becker ("Becker"), Greater Northwest's president, made false and misleading statements in several press releases, an Internet website, and a television infomercial about Langrill's control of Greater Northwest, as well as Greater Northwest's legal status, the identity of its directors, its financial condition, its acquisition of other companies, its future financial performance, and its eligibility for quotation on the OTC Bulletin Board.

3. Langrill and Becker profited from the fraud by selling Greater Northwest stock for proceeds of at least $24,537 and $46,400, respectively, through unregistered open market and private transactions.

4. Langrill and Becker also failed to file required reports with the Commission, and aided and abetted Greater Northwest's failures to file required reports with the Commission.

5. Defendants Langrill and Becker have violated Sections 5(a) and 5(c) of the Securities Act of 1933 ("Securities Act") [15 U.S.C. §§ 77e(a) and 77e(c)], Sections 10(b), 13(d) and 16(a) of the Securities Exchange Act of 1934 ("Exchange Act") [15 U.S.C. §§ 78j(b), 78m(d) and 78p(a)], and Rules 10b-5, 13d-1, 13d-2, 16a-2 and 16a-3 thereunder [17 C.F.R. §§ 240.10b-5, 240.13d-1, 240.13d-2, 240.16a-2, and 240.16a-3]. Further, Langrill and Becker aided and abetted Greater Northwest's violations of Section 13(a) of the Exchange Act [15 U.S.C. § 78m(a)] and Rules 13a-1, 13a-11, and 13a-13 thereunder [17 C.F.R. §§ 240.13a-1, 240.13a-11, and 240.13a-13].

6. The Commission brings this action pursuant to the authority conferred upon it by Section 20 of the Securities Act [15 U.S.C. § 77t] and Section 21 of the Exchange Act [15 U.S.C. § 78u] for an order permanently restraining and enjoining each of the defendants and granting other relief.

7. In addition to permanent injunctive relief, the Commission also seeks other relief, including without limitation orders:

  1. requiring each of Langrill and Becker to disgorge all ill-gotten gains received or benefits derived from the illegal conduct alleged in this Complaint, plus pre-judgment and post-judgment interest;

  2. requiring each of Langrill and Becker to pay third-tier civil money penalties pursuant to Section 20(d) of the Securities Act [15 U.S.C. § 77t(d)] and Section 21(d)(3) of the Exchange Act [15 U.S.C. § 78u(d)(3)];

  3. prohibiting each of Langrill and Becker from serving as officers and directors of a public company pursuant to Section 21(d)(2) [15 U.S.C. § 78u(d)(2)] of the Exchange Act and the general equitable powers of the Court; and

  4. prohibiting each of Langrill and Becker from participating in any offering of penny stock pursuant to Section 20(g) of the Securities Act [15 U.S.C. § 77t(g)] and Section 21(d)(6) of the Exchange Act [15 U.S.C. § 78u(d)(6)] and the general equitable powers of the Court.

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. § 77v(a)] and Sections 21(e) and 27 of the Exchange Act [15 U.S.C. §§ 78u(e) and 78aa].

9. In connection with the transactions, acts, practices, and courses of business described in this Complaint, each of the defendants, Langrill and Becker, directly and indirectly, has made use of the means or instrumentalities of interstate commerce, of the mails, and/or of the means and instruments of transportation or communication in interstate commerce.

10. Venue lies in this Court pursuant to Section 22(a) of the Securities Act [15 U.S.C. § 77v(a)] and Section 27 [15 U.S.C. § 78aa] of the Exchange Act because certain of the transactions, acts, practices and courses of business constituting the violations of law alleged herein occurred within this judicial district. Additionally, defendant Becker resides and transacts business in this judicial district and, during the time period at issue in this action, Langrill resided and transacted business in this judicial district.

III.

DEFENDANTS AND GREATER NORTHWEST

A. Defendants

11. Homer T. Langrill, age 49, is a former Las Vegas, Nevada resident who currently is incarcerated in federal prison in Seattle, Washington. He was an undisclosed control person of Greater Northwest from at least 1996 until March 20, 2002.

12. Thomas W. Becker, age 51, is a resident of Las Vegas, Nevada. He was Greater Northwest's chief executive officer and chairman of Greater Northwest's board of directors from at least January 3, 2002 until May 10, 2002. Thereafter Becker remained a member of Greater Northwest's board of directors until late June 2002.

B. Greater Northwest

13. Greater Northwest Research & Development Group, Inc. is a former Florida corporation doing business in Las Vegas, Nevada. The state of Florida administratively dissolved Greater Northwest on August 23, 1996 because Greater Northwest failed to file mandatory reports.

14. Greater Northwest claimed to operate as a holding company with three subsidiaries.

15. Greater Northwest stock was registered under Section 12(g) of the Exchange Act pursuant to a registration statement on Form 10-SB that became effective in June 1996. Greater Northwest has had continuing reporting obligations with the Commission since June 1996.

16. Greater Northwest stock is quoted in the electronic quotation service operated by The Pink Sheets, LLC.

IV.

FACTS

A. Langrill's Criminal History

17. Langrill has a lengthy criminal history. He was convicted in September 1998 on charges of passing fictitious checks, and sentenced to 30 months in prison and five years of supervised release. U.S. v. Homer T. Langrill, Docket No. CR 97-182-01-RE (D. Oregon Sept. 8, 1998). After serving his prison sentence on this conviction, Langrill's supervised release was revoked twice (on August 14, 2000 and on June 21, 2002) for, among other things, his unauthorized affiliation with Greater Northwest. He is currently serving a 2-year prison sentence in connection with his most recent probation revocation.

18. Langrill's previous convictions include two separate convictions on wire fraud charges on June 24, 1988 in the U.S. District Court for the Eastern District of Virginia, in which he was sentenced to 3 years and 16 months in prison, respectively. After Langrill served his prison sentences on these convictions, his supervised release was revoked for, among other things, his unauthorized affiliation with Greater Northwest.

19. In addition, on January 23, 1985, Langrill was convicted in Guatemala for grand theft and fraud and served 12 months in a Guatemalan prison.

20. Langrill is also wanted in Switzerland for incurring, in April 1986, $15,000 of rent and telephone expenses and leaving the country without paying.

B. Promotional Campaign for Greater Northwest

21. Between January 30 and June 11, 2002, Langrill, Becker, and Greater Northwest issued six press releases announcing news concerning Greater Northwest. Langrill and Becker dictated the contents of the first three releases, which were issued between January 30 and February 11, 2002, and approved the releases prior to dissemination.

22. Becker and Greater Northwest issued three additional press releases between May 3 and June 11, 2002. Becker approved the first of these releases and wrote the second.

23. An Internet website has been maintained for Greater Northwest at www.gnrd.com since April 16, 2002. Becker was responsible for the content of the website until May 2002.

24. Between February 1 and 3, 2002, an interview of Becker appeared on a stock touting cable television infomercial called Emerging Company Report ("ECR"). The interview was accessible through ECR's Internet website, www.emergingcompany.com, from February 1, 2002 until at least June 26, 2002. On February 1, 2002 and February 22, 2002, ECR issued press releases announcing that Becker's interview was featured on its television show and website.

C. False And Misleading Statements

25. All of the Greater Northwest press releases and the Greater Northwest website stated that Greater Northwest was "a public Florida development stage company." Additionally, press releases issued in February 2002 and the current Greater Northwest website identify three entities -- namely ADL Services, Inc. ("ADL"), Studio 702, Inc. ("Studio 702"), and Soho Entertainment Group, Inc. ("Soho") -- as Greater Northwest's "subsidiaries" and "holdings." All of these statements, as well as all of the press releases, the website, and the infomercial generally, were false and misleading because they implied that Greater Northwest was a legally valid corporation in good standing and failed to disclose that Greater Northwest was administratively dissolved in August 1996.

26. The January 30, 2002 Greater Northwest press release identified Greater Northwest's board members as including Becker and two other individuals. This statement was false and misleading because Greater Northwest's only directors at that time were Becker and Langrill's girlfriend, who acted at Langrill's direction. In addition, the announcement of Greater Northwest's new board members was misleading because it failed to disclose that Langrill, a convicted felon, was a control person of Greater Northwest.

27. The February 11, 2002 Greater Northwest press release announced that Greater Northwest had acquired Soho, which the release described as being "domiciled in Oregon and headquartered in Las Vegas." This statement was misleading because the release failed to disclose that Soho was owned by Langrill and Becker and acquired or purportedly acquired in a related party transaction.

28. The May 14, 2002 Greater Northwest press release announced that Greater Northwest had entered into a letter of intent with a private investor to fund Greater Northwest's television production and development schedule. The release further stated that the funding would be "based on a staged equity line of credit up to $2 million" and that Greater Northwest would soon use $250,000 to produce a new television series. This statement was misleading because the private investor lacked $2 million, and the press release failed to disclose that the funding was contingent upon the price of Greater Northwest stock reaching specified prices in the future.

29. The February 4, 2002 Greater Northwest press release announced that Greater Northwest had acquired a 30% interest in Studio 702 and stated that Greater Northwest had made a "cash infusion" into Studio 702 which gave it a "financial boost." This statement was false because Greater Northwest, which had no assets and no bank account, never paid any money to Studio 702.

30. In the ECR television infomercial, Becker stated that Greater Northwest had recently completed a Burger King commercial featuring blues legend B.B. King and that the commercial was "very profitable" for Greater Northwest. This statement was false because the commercial, which was filmed at Studio 702 prior to its affiliation with Greater Northwest, generated no revenues or profits for Greater Northwest.

31. Becker also stated in the ECR television infomercial that he was "the orchestrating director" of Greater Northwest. This statement was false and misleading because it implied that Becker alone essentially controlled Greater Northwest, and failed to disclose Langrill's involvement.

32. Until July 23, 2002, the Greater Northwest website included revenue projections for Greater Northwest for the year 2002. Among other things, these projections, which were supplied by Becker, stated that in 2002 Greater Northwest would: (1) through its ownership of Studio 702, achieve $250,000 in revenues; and (2) through its ownership in Soho, achieve $1,862,000 in revenues and profits of $558,600.

33. These projections were baseless because Greater Northwest had only purchased or attempted to purchase a minority interest in Studio 702, Soho's past performance did not support the projections, and the projections for Soho were indirectly contingent upon Soho receiving funding from a private investor who lacked the means to provide such funding. These adverse facts were not disclosed with the projections.

34. The January 30, 2002 press release stated that Greater Northwest "expected to soon file a Form 10sb [sic] with the Securities and Exchange Commission in compliance with NASD Rule 6530 to enable its stock to be eligible for trading on the OTC Bulletin Board." This statement was misleading because Greater Northwest, which was several years delinquent in its filings with the Commission, was not eligible for quotation on the Bulletin Board. Also, Greater Northwest did not have sufficient resources to bring current with the Commission all of its delinquent filings.

35. The misstatements and omissions described above would have been important to a reasonable investor.

D. Stock Acquisitions And Sales By Langrill And Becker

36. Langrill owned more than ten percent of Greater Northwest's outstanding shares between at least February 2000 and March 20, 2002. Becker owned more than five percent of Greater Northwest's outstanding shares between February 4, 2002 and at least March 28, 2002, and over ten percent between February 11, 2002 and at least March 28, 2002.

37. Between at least January 17 and February 11, 2002, Langrill acquired at least 6,850,000 shares of Greater Northwest stock. Between at least January 17 and March 13, 2002, Becker acquired at least 6,500,000 shares of Greater Northwest stock. These acquisitions resulted in increases in Langrill's and Becker's stock ownership equal to more than one percent of Greater Northwest's outstanding shares.

38. Between January 22 and February 26, 2002, Langrill sold at least 92,500 shares of Greater Northwest stock in open market transactions within between five and thirty-one days of receiving these shares directly from Greater Northwest. Langrill received proceeds of at least $24,537 from these sales. Langrill also transferred 2 million and 1 million shares of his Greater Northwest stock in private transactions on January 17 and February 26, 2002, respectively. These dispositions resulted in decreases in Langrill's stock ownership equal to more than one percent of Greater Northwest's outstanding shares. Langrill also purchased 11,500 shares of Greater Northwest stock in the open market between February 25 and 27, 2002.

39. Between January 22 and April 25, 2002, Becker sold more than 2 million shares of Greater Northwest stock within no more than forty days after receiving these shares directly from Greater Northwest. These dispositions resulted in a decrease in Becker's stock ownership equal to more than one percent of Greater Northwest's outstanding shares. Becker received proceeds of at least $46,400 from these sales.

40. No registration statement was in effect with respect to Langrill's and Becker's sales of Greater Northwest stock.

41. Neither Langrill nor Becker filed reports with the Commission disclosing their acquisition of more than five or ten percent of Greater Northwest's outstanding shares, or their acquisitions, dispositions, holdings, and changes in holdings of Greater Northwest stock.

E. Price And Volume Movement

42. During the three days prior to the January 30, 2002 press release, Greater Northwest stock traded at between $0.23 to $0.25 per share on reported volume of between 1,000 and 10,000 shares. On January 31, 2002, the day after the first press release at issue was disseminated, the price of Greater Northwest stock increased by approximately 40% to $0.35 per share, and volume increased by approximately 200% to 30,000 shares.

43. The day after the February 4, 2002 Greater Northwest press release, the price of Greater Northwest stock increased approximately 8.6%, from $0.35 to $0.38 per share, and volume increased approximately 214%, from 14,800 to 46,500 shares. On February 12, 2002, the day after another Greater Northwest press release was issued, the price of Greater Northwest stock increased approximately 16.7%, from $0.30 to $0.35, but volume decreased.

44. Greater Northwest stock is currently trading at approximately $0.001 per share.

F. Delinquent Filings

45. From August 1996 to the present, Greater Northwest has failed to file six annual reports and 19 quarterly reports. The last year for which Greater Northwest filed an annual report was the year ended December 31, 1995; the last Form 10-Q was for the quarter ended September 30, 1995.

46. In addition, Greater Northwest has never filed a current report on Form 8-K regarding the resignation of certain members of its board of directors or its acquisitions or purported acquisitions of interests in ADL, Soho, or Studio 702.

FIRST CLAIM FOR RELIEF

(Violations By Langrill and Becker of
Section 10(b) of The Exchange Act and Rule 10b-5 Thereunder)

47. Plaintiff repeats and realleges Paragraphs 1 through 46 above.

48. Defendants Langrill and Becker, directly or indirectly, with scienter, in connection with the purchase or sale of securities, by the use of means or instrumentalities of interstate commerce or of the mails, have employed devices, schemes, or artifices to defraud; have made untrue statements of material fact or omitted 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 have engaged in acts, practices, or courses of business which operated or would operate as a fraud or deceit upon any person; in violation of Section 10(b) of the Exchange Act [15 U.S.C. § 78j(b)] and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5].

49. By reason of the foregoing, defendants Langrill and Becker violated Section 10(b) of the Exchange Act and Rule 10b-5 thereunder, and unless restrained and enjoined will continue to do so.

SECOND CLAIM FOR RELIEF

(Violations by Langrill and Becker of
Sections 5(a) And 5(c) of The Securities Act)

50. Plaintiff repeats and realleges Paragraphs 1 through 49 above.

51. Between January 22 and April 25, 2002, Becker and Langrill sold at least 92,500 shares and more than 2 million shares of Greater Northwest stock, respectively, which they had previously obtained directly from Greater Northwest.

52. No registration statement was in effect with respect to Langrill's and Becker's sales of Greater Northwest stock.

53. Langrill and Becker, directly or indirectly, have made use of the means or instruments of transportation or communication in interstate commerce or of the mails to offer and sell securities when no registration statement had been filed or was in effect as to such securities, in violation of Sections 5(a) and 5(c) of the Securities Act [15 U.S.C. §§ 77e(a) and 77e(c)].

54. By reason of the foregoing, Becker and Langrill have violated Sections 5(a) and 5(c) of the Securities Act, and unless restrained and enjoined will continue to do so.

THIRD CLAIM FOR RELIEF

(Violations by Langrill and Becker of
Section 13(d) of the Exchange Act and Rules 13d-1 and 13d-2 Thereunder)

55. Plaintiff repeats and realleges Paragraphs 1 through 54 above.

56. Langrill and Becker each acquired and held in excess of five percent of the common stock of Greater Northwest.

57. Neither Langrill nor Becker ever filed a Schedule 13D with the Commission disclosing their acquisitions more than five percent of Greater Northwest stock.

58. Neither Langrill nor Becker ever filed a Schedule 13D or amendment with the Commission disclosing any material increases or decreases in the number of Greater Northwest shares they owned.

59. By reason of the foregoing, Langrill and Becker violated Section 13(d) of the Exchange Act [15 U.S.C. § 78m(d)] and Rules 13d-1 and 13d-2 thereunder [17 C.F.R. §§ 240.13d-1 and 240.13d-2], and unless restrained and enjoined will continue to do so.

FOURTH CLAIM FOR RELIEF

(Violations by Langrill and Becker of Section 16(a) of the Exchange Act and Rules 16a-2 and 16a-3 thereunder)

60. Plaintiff repeats and realleges Paragraphs 1 through 59 above.

61. Langrill acquired and held in excess of ten percent of the common stock of Greater Northwest. He also performed policy-making functions similar to those performed by an officer of Greater Northwest. Accordingly, Langrill was an officer of Greater Northwest for purposes of Section 16(a) of the Exchange Act.

62. Becker acquired and held in excess of ten percent of the common stock of Greater Northwest, and was chief executive officer and a director of Greater Northwest.

63. Langrill and Becker never filed Forms 3 and 4 disclosing their beneficial ownership of Greater Northwest stock and subsequent changes in their beneficial ownership of such stock, and Langrill never filed Forms 5, requiring annual disclosure of such ownership within 45 days after the end of the fiscal year, in violation of Section 16(a) of the Exchange Act [15 U.S.C. § 78p(a)] and Rules 16a-2 and 16a-3 thereunder [17 C.F.R. §§ 240.16a-2 and 240.16a-3].

64. By reason of the foregoing, Langrill and Becker violated Section 16(a) of the Exchange Act and Rules 16a-2 and 16a-3 thereunder, and unless restrained and enjoined will continue to do so.

FIFTH CLAIM FOR RELIEF

(Aiding and Abetting by Langrill and Becker of Greater Northwest's Violations of Exchange Act Section 13(a) and Rules 13a-1, 13a-11, and 13a-13 thereunder)

65. Plaintiff repeats and realleges Paragraphs 1 through 64 above.

66. Since June of 1996, Greater Northwest has been an issuer of a security registered with the Commission pursuant to Section 12(g) of the Exchange Act, and has been subject to the periodic reporting requirements imposed on such issuers by the Exchange Act.

67. As described elsewhere in this Complaint, Greater Northwest has failed to file mandatory periodic and current reports with the Commission for over six years.

68. By reason of the foregoing, Greater Northwest violated Section 13(a) of the Exchange Act and Rules 13a-1, 13a-11 and 13a-13 thereunder.

69. Langrill and Becker knew or were reckless in not knowing of Greater Northwest's violations of Section 13(a) of the Exchange Act and Rules 13a-1, 13a-11 and 13a-13 thereunder, and substantially assisted Greater Northwest in committing these violations.

70. By reason of the foregoing, Langrill and Becker aided and abetted Greater Northwest's violations of Section 13(a) of the Exchange Act [15 U.S.C. § 78m(a)] and Rules 13a-1, 13a-11 and 13a-13 thereunder [17 C.F.R. §§ 240.13a-1, 240.13a-11 and 240.13a-13], and unless restrained and enjoined will continue to aid and abet violations of these provisions.

PRAYER FOR RELIEF

WHEREFORE, the Commission respectfully requests that the Court:

  1. Find that the defendants Langrill and Becker committed the violations alleged;

  2. Enter injunctive relief permanently restraining and enjoining each of defendants Langrill and Becker, directly or indirectly to the full extent provided by Rule 65(d) of the Federal Rules of Civil Procedure, from violating, and aiding and abetting violations of, as appropriate, the provisions of law and rules which the Commission alleges in this Complaint have been violated;

  3. Order each of defendants Langrill and Becker to disgorge all ill-gotten gains received or benefits in any form derived from the illegal conduct alleged in this Complaint, together with prejudgment and post-judgment interest as provided by law;

  4. Order each of defendants Langrill and Becker to pay third-tier civil money penalties pursuant to Section 20(d) of the Securities Act [15 U.S.C. § 77t(d)] and Section 21(d)(3) [15 U.S.C. § 78u(d)(3)] of the Exchange Act;

  5. Order that each of defendants Langrill and Becker are barred from serving as an officer or director of any publicly held company pursuant to Section 21(d)(2) of the Exchange Act [15 U.S.C. § 78u(d)(2)] and the general equitable powers of the Court;

  6. Order that each of defendants Langrill and Becker are barred from participating in any offering of penny stock pursuant to Section 20(g) of the Securities Act [15 U.S.C. § 77t(g)] and Section 21(d)(6) of the Exchange Act [15 U.S.C. § 78u(d)(6)] and the general equitable powers of the Court; and

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

DATED: October 31, 2002

Respectfully submitted,

______________________________
Thomas M. Piccone
Michael R. MacPhail
Kelli Farrand Chan
Attorneys for Plaintiff
Securities and Exchange Commission
1801 California Street, Suite 1500
Denver, Colorado 80202
(303) 844-1000


http://www.sec.gov/litigation/complaints/comp17822.htm

Modified: 11/01/2002