UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF INDIANA

COMPLAINT

Plaintiff, United States Securities and Exchange Commission (the "Commission") alleges and states as follows:

NATURE OF THE COMPLAINT

1. This matter involves the fraudulent offer and sale of at least $1,680,000 in securities by Philip J. Yoder ("Yoder" or "Defendant") in furtherance of two different schemes. From approximately November 2000 through March 2001, in a scheme called All the Way to the Top ("ATWTTT"), Yoder fraudulently offered and sold notes over the Internet through a website at the address www.atwttt.com. During that same time, Yoder fraudulently offered and sold "Participation Agreements" on behalf of Sebastian Corriere ("Corriere") for a fictitious prime bank trading program.

2. Yoder sold over $660,000 in unregistered securities for ATWTTT. He represented to investors that ATWTTT would invest in a "smart card" technology company called ATTM. According to Yoder, ATTM produced "smart cards" that supposedly operate as debit and telephone cards and store medical information. Yoder also promised investors that the investment was guaranteed and risk-free. In reality, Yoder could not produce the promised returns; investors never received any returns and lost their principal. In addition, the majority of the funds raised in ATWTTT were misappropriated by Yoder to pay for, among other things, two Mercedes automobiles, travel for him and his wife abroad and in the United States, and for other personal expenses.

3. Yoder raised at least $1,020,000 for Corriere's prime bank trading program from at least three investors by promising astounding weekly returns. In reality, the trading program did not exist and investors never received any returns. In addition, one investor who invested $1,000,000 in the scheme lost his principal.

4. During Yoder's solicitation of investors for ATWTTT and the prime bank scheme, Yoder made, or caused to be made, numerous material misrepresentations and omitted to state material information in connection with the offer, purchase and sale of the ATWTTT notes and the prime bank Participation Agreements, which included the following: (1) the existence of the prime bank scheme; (2) the risk and rate of return on both investments; (3) the guaranteed nature of both investments; and (4) Yoder's representations regarding his previous successes in completing similar high-yield investments.

5. Yoder, directly and indirectly, has engaged in and, unless enjoined, will continue to engage in transactions acts, practices and courses of business which constitute and will constitute violations of Sections 5(a), 5(c) and 17(a) of the Securities Act of 1933 ("Securities Act") [15 U.S.C. §§ 77e(a) and 77q(a)], Section 10(b) and 15(a) of the Securities Exchange Act of 1934 ("Exchange Act") [15 U.S.C. §§ 78j(b) and §78o(a)] and Rule 10b-5 thereunder [17 C.F.R. 240.10b-5]. There is a reasonable likelihood that Yoder, if not enjoined, will continue to engage in transactions, acts, practices and courses of business, the same as, or similar to, these set forth above, and as more fully set forth below in this Complaint, in violation of the federal securities laws.

6. Accordingly, the Commission seeks: (i) entry of a permanent injunction prohibiting Yoder from engaging in future violations of the relevant provisions of the federal securities laws; (ii) the imposition of a civil monetary penalty against Yoder due to the egregious nature of the violations; and (iii) disgorgement, including prejudgment interest, of any ill-gotten gains.

JURISDICTION

7. The Commission brings this action to enjoin such transactions, acts, practices and courses of business pursuant to Section 20(b) of Securities Act [15 U.S.C. § 77 t(b)] and Sections 21(d) and (e) of the Exchange Act [15 U.S.C. §§ 78u(d) and (e)].

8. This Court has jurisdiction over this action pursuant to Section 22(a) of the Securities Act [15 U.S.C. § 77v(a)], Section 27 of the Exchange Act [15 U.S.C. § 78aa], and 28 U.S.C. § 1331.

9. Yoder, directly and indirectly, made use of the mails and means and instrumentalities of interstate commerce in connection with the transactions, acts, practices, and courses of business alleged herein.

DEFENDANT

10. Philip J. Yoder, age 25, resides at 3350 Bay Street in Sarasota, Florida, where he lives with his wife, Bobbie Jean Yoder, and his parents. During his solicitation of investors for these schemes, however, Yoder resided in various locations in Goshen, Indiana.

RELATED PARTIES

11. Sebastian Corriere, age approximately 65, resides in Accra, Ghana, on the continent of Africa. From at least November 2000 to March 2001, Corriere resided in Clearwater, Florida. Since at least October 2000, Corriere has raised millions of dollars in investor funds for so-called "high-yield private placement programs involving the trading of medium term notes." These programs are also known as prime bank schemes. In April 2002, the Commission sought and obtained a temporary restraining order against Corriere for his ongoing solicitation of investors for non-existent prime bank trading programs in the United States District Court for the Middle District of Florida. SEC v. Corriere, et.al, 02-CV-666-T17EAJ (M.D. Fla. 2002). In June 2002 the Commission obtained a preliminary injunction against him and later an entry of default in January 2003.

12. ATTM is a subsidiary of an Oregon privately held corporation, World Innovation Netcomm Services, Inc. ("WINS"). WINS and ATTM are located in Salem, Oregon and purportedly offer ATTM "smart-cards" over the Internet. The "smart-cards" supposedly look similar to regular credit cards, but have the ability to store vast amounts of information. These smart cards supposedly operate as personal ATM and telephone cards, offer access to cable and satellite programs, and contain medical information.

FACTS

Offer and Sale of All the Way to the Top ("ATWTTT") Notes

13. From at least November 2000 through March 2001, Yoder offered and sold notes to investors for ATWTTT. Yoder raised at least $660,000 for this scheme.

14. Yoder raised funds for ATWTTT from approximately 82 investors from the United States, Canada, and the Philippines. The vast majority of the funds raised were from investors located in the United States.

15. Yoder, through e-mail, Internet chatrooms, and a website, solicited investors to make a $2,500 or $5,000 investment, guaranteeing a risk-free monthly return.

16. According to the ATWTTT website drafted by Yoder, formerly located at www.atwttt.com, a $5,000 investment would produce a 50% monthly return and a $2,500 investment would produce a 40% monthly return for three years. Thus, a $5,000 investment would pay out $90,000 over three years. The website touted the investment as the "...newest and best way of making a guaranteed monthly return on your money."

17. Investors entered into ATWTTT by signing an agreement with Yoder, which investors downloaded off the ATWTTT website. Yoder called this agreement a contract. The agreement contained, among other things, the promised guaranteed return and the length of the agreement, which was for three years.

18. To participate in ATWTTT investors either wired their funds or sent a check to Yoder. Yoder received funds in three different accounts: (1) First Source Bank ("First Source"), (2) Elkhart County Farm and Bureau Credit Union ("Elkhart"), and (3) E-Gold. E-Gold, Ltd. is an Internet company that coverts currency, such as U.S. dollars, into electronic currency, which is valued by different precious metals. Anyone can maintain an E-Gold account, which operates similar to a bank account. An owner of an E-gold account can freely transfer funds into and out of their E-gold account via wire transfer. Yoder received approximately $418,000 of investor funds via his personal checking accounts at First Source and Elkhart. Both of these accounts were jointly maintained with his wife, Bobbie Jean Yoder. Yoder also received $250,000 of investors' funds through his E-gold account.

19. As part of the ATWTTT program, Yoder made misrepresentations and generated materials, which described the existence and safety of this program. These material misrepresentations were disseminated by him and others to investors and included, but are not limited to, the following statements:

a. Yoder promised investors through the website contract that he would never miss a monthly payment and guaranteed investors a monthly percentage return of 40% or 50% depending upon the amount invested;

b. Yoder claimed that this investment was safe and risk free;

c. Yoder told most investors that their money would be pooled or commingled with other investors' money to invest in so-called "smart-card" technology. Yoder claimed that he had provided $3 million in venture capital to a company called ATTM, that ATWTTT investors' funds would be invested in ATTM, and that investors would be paid from the profits of ATTM's business. In some instances, Yoder claimed that the federal government backed ATTM's "smart-card" business and claimed that the venture was a "sure thing;"

d. Yoder told other investors he was pooling or commingling their funds to invest in an unidentified high-yield trading program, which would produce the promised returns; and

f. Yoder represented to many investors that he had previously completed similar high-yield investments and received millions in returns.

20. Additionally, Yoder, in connection with his solicitation of investors, omitted material information. These material omissions included, but are not limited to, the following:

a. Yoder never told investors that he would use investors' funds for personal use, including, among other things, the purchase of Mercedes vehicles for himself and his wife; and

b. Yoder never told investors that any investment in ATTM was risky and was not a "sure thing."

21. These misrepresentations and omissions are material and go to the heart of the investment. A reasonable investor would want to know that the investment was not risk-free, that they may lose their principal, that the investment would not generate returns, that Yoder had not previously completed any similar high-yield investments, and that investor funds would not be used for the represented purpose.

22. In total, Yoder only invested $240,000 of the over $660,000 he raised for ATWTTT in ATTM. While Yoder did have an agreement with ATTM to provide them with $3 million, ATTM did not guarantee any returns on the investment. Contrary to his own representations, Yoder never gave ATTM $3 million. In addition, the agreement between Yoder and ATTM states that any investment was not guaranteed and there was a risk of complete loss. Despite these warnings, Yoder solicited ATWTTT investors promising risk-free guaranteed monthly returns of 40% to 50%. To date, Yoder has received only a few hundred dollars from the ATTM investment.

23. Yoder also invested $205,000 of the ATWTTT investors' funds in Corriere's prime bank scheme. According to offering materials, an investment in the prime bank scheme would produce a 100% return for eleven weeks. Yoder wired the $205,000 to an attorney in Canada who held the funds for Corriere. Yoder never received any of the promised returns. In March 2001, Yoder asked Corriere for the return of his investment. The Canadian attorney, on Corriere's direction, eventually returned $145,000 in ATWTTT investor funds to Yoder. Yoder misappropriated the $145,000 and never returned these funds to investors. The remaining $60,000 of the ATWTTT investors' funds remains unaccounted as the majority of the funds raised in Corriere's prime bank scheme were transferred to China to an account controlled by a Hong Kong businessman.

24. Yoder misappropriated at least $372,000 of ATWTTT investor funds, including the $145,000 returned to Yoder in March 2001. Yoder used these funds to purchase, among other things, a Mercedes sports utility vehicle and a Mercedes sports car. In addition, Yoder spent at least $40,000 of investors' funds on travel, including trips to Switzerland, the Bahamas, Boca Raton and Clearwater, Florida, Los Angeles, California, and Las Vegas, Nevada. Yoder also used the funds to make various purchases at retail outlets.

25. Contrary to Yoder's representations, none of the investors who invested in ATWTTT received a return on their investment or a refund of their principal.

Offer and Sale of Participation Interests in Non-Existent Trading Program

26. From at least December 2000 through March 2001, Yoder fraudulently offered and sold participation interests to investors on behalf of Corriere for a non-existent trading program involving the trading of medium term notes or "MTNs." For this scheme, Yoder successfully raised at least $1,020,000.

27. Yoder, through e-mail, facsimile, and the telephone, solicited investors to enter into a "Participation Agreement" with Corriere to place funds in the high-yield trading program.

28. The Participation Agreement claimed that Corriere had a contractual agreement with a Hong Kong businessman, to enter a $200 million high-yield private placement project for the trading of MTNs. According to the agreement, for every $1.5 million in investor funds that Corriere raised, the Hong Kong businessman would supposedly put up $100 million of his own funds to be used by a trader of medium term notes in Canada. Investors expected their returns to be generated by the efforts of Corriere, the Hong Kong businessman, and the trader in Canada. These programs, however, are in the nature of "prime bank" programs and do not exist.

29. The Participation Agreement stated that investors could expect a return of 100% per week for the duration of the trading agreement, which was expected to last eleven months. Thus, a $10,000 investment could be expected to yield $440,000 over the course of the eleven months.

30. In order to participate in the trading program, Corriere instructed investors to wire their funds to the Bank of Montreal in Vancouver, British Columbia, Canada, to an attorney's trust account.

31. Of the $1,020,000 raised, Yoder sent $20,000 from two investors to the attorney trust account in January 2001. The remaining $1,000,000 was wired to the attorney trust account by a third investor in January 2001. In late January 2001, Corriere directed the funds be transferred to the Hong Kong businessman to an account in Shanghai, China.

32. As part of the trading program, Yoder made misrepresentations to investors, which described the existence and safety of the MTN program. These material misrepresentations, included, but are not limited to, the following statements:

a. Yoder promised some investors that the returns were guaranteed and that their principal could not be lost;

b. Yoder told investors that these trading programs are "safe" investments and actually exist; and

c. Yoder represented to investors that he had experience in completing similar trading programs and that he had recently successfully closed on a trade that yielded him millions in profits.

33. These misrepresentations are material and go to the heart of the investment. A reasonable investor would want to know that the scheme in which he or she invested did not exist, that the investment was not risk-free, that they may lose their principal, that the investment would not generate returns, and that Yoder had not previously completed any similar high-yield investments.

34. For his efforts, Yoder was to receive a commission from the investors. For the investor who invested $1,000,000, Yoder was to receive 50% of the investor's returns as a commission. According to the Participation Agreement, this should have amounted to $22 million in returns over the course of the trading program. Other investors in this program also represented that Yoder was to receive a commission for soliciting them for the investment. These investors did not specify an amount. As this prime bank trading program did not exist, Yoder never received any commissions.

35. Throughout his solicitation of investors, Yoder held himself out to the public as a so-called "trader" or "facilitator" of high-yield investments.

36. None of Yoder's investors received any of the promised returns in Corriere's scheme. In addition, Yoder's investor who put in $1,000,000 never received his principal back. The location of the $1,000,000 is currently unknown. As for the remaining $20,000 invested by Yoder's investors, Yoder returned that money in March 2001.

COUNT I

Violation of Section 5(a) and (c) of the Securities Act
Act [15 U.S.C. § 77e(a) and (c)]

37. The Commission realleges and repeats its allegations set forth at paragraphs 1-36, of this Complaint as if fully restated herein.

38. During the period at least from November 2000 through March 2001, and possibly other times, Yoder, 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.

39. No registration statement was filed with the Commission in connection with Yoder's sale of the ATWTTT notes.

40. By reason of the activities described herein, Yoder violated Sections 5(a) and (c) of the Securities Act [15 U.S.C. § 77e(a) and (c)].

COUNT II

Violations of Section 17(a)(1) of the Securities Act
[15 U.S.C. § 77q(a)(1)]

41. The Commission realleges and repeats its allegations set forth at paragraphs 1-36 of this Complaint as if fully restated herein.

42. At all relevant times, Yoder, in the offer and sale of securities in the form of the ATWTTT notes and the Participation Agreements for Corriere's scheme, by the use of the means and instruments of transportation and communication in interstate commerce and by the use of the mails, directly and indirectly, has employed devices, schemes and artifices to defraud, as more fully described above.

43. At all relevant times, Yoder made false and misleading statements of material fact or omitted to state material facts to investors and prospective investors concerning, among other things, the guaranteed nature of the investors' expected returns, the use of investor proceeds, the risk of the investment, and the very existence of the trading programs operated by Corriere.

44. At all relevant times, Yoder knew, or was reckless in not knowing, that the statements or omissions described herein were materially false or misleading.

45. By reason of the activities described herein, Yoder violated Section 17(a)(1) of the Securities Act [15 U.S.C. § 77q(a)(1)].

COUNT III

Violations of Section 17(a)(2) and 17(a)(3) of the Securities Act
[15 U.S.C. § 77q(a)(2) and § 77q(a)(3)

46. The Commission realleges and repeats its allegations set forth at paragraphs 1-36 of this Complaint as if fully restated herein.

47. At all relevant times, Yoder, in the offer and sale of securities in the form of the ATWTTT notes and the Participation Agreements for Corriere's scheme, by the use of the means and instruments of transportation and communication in interstate commerce and by the use of the mails, directly and indirectly, has obtained property by means of untrue statements of material fact or 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, and have engaged in transactions, practices or courses of business which have operated as a fraud and deceit upon purchasers of securities.

48. By reason of the activities described herein, Yoder violated Sections 17(a)(2) and 17(a)(3) of the Securities Act [15 U.S.C. §§ 77q(a)(2) and 77q(a)(3)].

COUNT IV

Violations of Section 10(b) of the Exchange Act [15 U.S.C. §78j(b)] and Rule 10b-5 [17 C.F.R. 240.10b-5] thereunder

49. The Commission realleges and repeats its allegations set forth at paragraphs 1-36 of this Complaint as if fully restated herein.

50. At all relevant times, Yoder, in the connection with the purchase and sale of securities in the form of the ATWTTT notes and the Participation Agreements for Corriere's scheme, directly and indirectly, by the use of the means and instrumentalities of interstate commerce or of the mails, employed schemes and artifices to defraud; made untrue statements of material fact and has 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; and engaged in acts, practices and courses of business which operated, and are operating, as a fraud and deceit upon the investors.

51. At all relevant times, Yoder knew or was reckless in not knowing that the statements or omissions described herein were materially false or misleading.

52. By reason of the activities described herein, Yoder violated Section 10(b) of the Exchange Act [15 U.S.C. §78j(b)] and Rule 10b-5 [17 C.F.R. §240.10b-5] thereunder.

COUNT V

Violations of Section 15(a) of the Exchange Act
[15 U.S.C. §78o(a)]

53. The Commission realleges and repeats its allegations set forth at paragraphs 1-36 of this Complaint as if fully restated herein.

54. From approximately November 2000 through March 2001, Yoder made use of the mails or means or instrumentalities of interstate commerce in order to effect transactions in, or induce or attempt to induce the purchase or sale of securities without being registered with the Commission as a broker or dealer.

55. By reason of the activities described herein, Yoder violated Section 15(a) of the Exchange Act [15 U.S.C. §78o(a)].

RELIEF REQUESTED

WHEREFORE, the Commission respectfully requests that the Court enter a judgment:

A. permanently enjoining Yoder from future violations of Section 5(a) and (c), Section 17(a)(1), (a)(2), and (a)(3) of the Securities Act, Sections 10(b) and 15(a) of the Exchange Act and Rule 10b-5 thereunder;

B. ordering Yoder to pay a third-tier civil monetary penalty in the amount of $110,000 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)];

C. ordering Yoder to pay disgorgement of any ill-gotten gains, including prejudgment interest;

D. retaining jurisdiction over this action to implement and carry out the terms of all orders and decrees that may be entered; and

E. granting such other and additional relief as this Court deems just and proper.

Dated: June 9, 2003

http://www.sec.gov/litigation/complaints/comp18184.htm