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U.S. Securities and Exchange Commission


Securities and Exchange Commission,

Plaintiff,   

v.

PATRICK BALLINGER, DENNIS R. WEAVER,
KOSTA S. KOVACHEV, LEE E. LARSCHEID,
BENNY G. MORRIS, DARIN W. ROBERTS,
LINDA M. SEARS, TODD F. WALKER,
BRANSON CITY LIMITS, INC.,
RESORT HOTELS, INC.,
UNIVERSAL FINANCIAL LEASING, INC., AND
OZARK AND TRAVEL, INC.,

Defendants.   


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Civil Action No.

COMPLAINT FOR INJUNCTIVE AND OTHER RELIEF

Plaintiff United States Securities and Exchange Commission ("Commission") alleges:

NATURE OF THE CASE

1. At various times from in or about September 2000 to the present, defendants BRANSON CITY LIMITS, INC. ("BRANSON CITY") and RESORT HOTELS, INC. ("RESORT HOTELS"), through defendants PATRICK BALLINGER ("BALLINGER"), DENNIS R. WEAVER ("WEAVER"), DARIN W. ROBERTS ("ROBERTS"), TODD F. WALKER ("WALKER"), LINDA M. SEARS ("SEARS"), KOSTA S. KOVACHEV ("KOVACHEV"), UNIVERSAL FINANCIAL LEASING, INC. ("UNIVERSAL LEASING"), BENNY G. MORRIS ("MORRIS"), OZARK AND TRAVEL, INC. ("OZARK"), and LEE E. LARSCHEID ("LARSCHEID") (collectively, "DEFENDANTS"), and a nation-wide network of sales agents (collectively, the "sales force") fraudulently offered and sold at least $28 million in securities nominally structured as hotel timeshare rental interests ("units") in unregistered transactions to over 600 investors in 30 states through, among other things, the means and instrumentalities of interstate commerce and the mails (collectively, "interstate means"). BRANSON CITY's and RESORT HOTELS' securities offerings are, in fact, ongoing Ponzi schemes in which existing investors' returns have been paid with new investors' money to mislead them into believing their investments are profitable. DEFENDANTS are marketing the units as investments to numerous elderly, unsophisticated investors, and have sold many investors far more units than they could possibly use. One 89-year-old victim invested about $630,000. DEFENDANTS have also induced investors to use at least $12.7 million of funds from their individual retirement accounts to purchase BRANSON CITY and RESORT HOTELS' securities.

2. Defendants BALLINGER, BRANSON CITY, KOVACHEV, LARSCHEID, MORRIS, OZARK, RESORT HOTELS, ROBERTS, SEARS, UNIVERSAL LEASING, WALKER and WEAVER, directly and indirectly, have engaged, and are engaging in transactions, acts, practices, and courses of business which 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), 77e(c), and 77q(a)], Section 10(b) of the Securities Exchange Act of 1934 ("Exchange Act") [15 U.S.C. 77j(b)], and Rule 10b-5 [17 C.F.R. 240.10b-5] promulgated thereunder.

3. Defendants MORRIS, ROBERTS and UNIVERSAL LEASING, directly and indirectly, have also engaged in transactions, acts, practices, and courses of business which constitute violations of Section 15(a) of the Exchange Act [15 U.S.C. 78o(a)].

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

JURISDICTION AND VENUE

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

6. Venue is proper pursuant to Section 22(a) of the Securities Act [15 U.S.C. 77v(a)] and Section 27 of the Exchange Act [15 U.S.C. 78aa].

7. DEFENDANTS will, unless enjoined, continue to engage in the transactions, acts, practices, and courses of business set forth in this Complaint, and in transactions, acts, practices and courses of business of similar purport and object.

8. The transactions, acts, practices and courses of business constituting the violations herein occurred within the jurisdiction of the United States District Court for the Southern District of Indiana and elsewhere.

9. DEFENDANTS, directly and indirectly, have made, and are making, use of the means and instrumentalities of interstate commerce, and the mails, in connection with the acts, practices and courses of business alleged herein in the Southern District of Indiana and elsewhere.

DEFENDANTS

10. BALLINGER is 55 years old. BALLINGER received, directly and indirectly, at least $433,545 in ill-gotten gains from the fraudulent BRANSON CITY and RESORT HOTELS securities offerings that are the subject of this action. Since in or about January 2003, BALLINGER has been incarcerated in federal prison as a result of a November 2002 conviction for conspiracy to commit mail fraud in violation of 18 U.S.C. 371 for an unrelated fraudulent investment scheme. He was sentenced to 18 months in prison, three years of supervised release, and ordered to pay over $1.6 million in restitution.

11. WEAVER, age 54, resides in Jackson, Tennessee. WEAVER received, directly and indirectly, at least $2.8 million in ill-gotten gains from the fraudulent BRANSON CITY and RESORT HOTELS securities offerings that are the subject of this action. In September 1999, the Tennessee Commissioner of Commerce and Insurance issued a cease-and-desist order ("Tennessee C&D Order") enjoining WEAVER from selling unregistered securities and acting as an agent of an unregistered broker-dealer. The Tennessee C&D Order also enjoined an entity controlled by WEAVER from acting as an unregistered broker-dealer. In October 1999, the Franklin, Kentucky Circuit Court issued an order permanently enjoining WEAVER, and an entity WEAVER controlled, from violating an anti-fraud provision of the Kentucky securities laws and from offering and selling unregistered securities.

12. KOVACHEV, age 52, resides in Lake Worth, Florida. KOVACHEV received, directly and indirectly, at least $259,000 in ill-gotten gains from the fraudulent RESORT HOTELS securities offering that is the subject of this action. During his investigative testimony before the Commission, KOVACHEV refused to answer substantially all of the Commission staff's questions about the fraudulent BRANSON CITY and RESORT HOTELS securities offerings, based on his Fifth Amendment right against self-incrimination, including questions about his role in the schemes, and his use and disposition of investors' funds.

13. LARSCHEID, age 54, resides in Branson, Missouri. LARSCHEID received at least $11,000 in ill-gotten gains from the fraudulent BRANSON CITY securities offering that is the subject of this action. In February 1995, LARSCHEID was convicted of bank fraud in violation of 18 U.S.C. 1344, a felony, for his part in an unrelated fraudulent scheme, and sentenced to five months in prison, five years of supervised release, and ordered to pay $12,000 in restitution.

14. MORRIS, age 46, resides in Palm Harbor, Florida. MORRIS received, directly and indirectly, at least $1.3 million in ill-gotten gains from the fraudulent BRANSON CITY and RESORT HOTELS securities offerings that are the subject of this action. During his investigative testimony before the Commission, MORRIS refused to answer substantially all of the Commission staff's questions based on his Fifth Amendment right against self-incrimination, including questions about his roles in the fraudulent BRANSON CITY and RESORT HOTELS securities offerings, and his use and disposition of investors' funds. At no relevant time was MORRIS registered with the Commission in any capacity.

15. ROBERTS, age 29, resides in Branson, Missouri. ROBERTS received at least $110,000 in ill-gotten gains from the fraudulent BRANSON CITY and RESORT HOTELS securities offerings that are the subject of this action. At no time was ROBERTS registered with the Commission in any capacity.

16. SEARS, age 50, resides in North Seminole, Florida. SEARS received, directly and indirectly, at least $24,000 in ill-gotten gains from RESORT HOTELS that is the subject of this action. In 1973, SEARS was convicted of felony theft for stealing money from an employer for whom she worked as an internal auditor. She was sentenced to three years probation.

17. WALKER, age 44, is a Florida attorney residing in Tampa, Florida. WALKER received, directly and indirectly, at least $436,000 in ill-gotten gains from the fraudulent BRANSON CITY and RESORT HOTELS securities offerings that are the subject of this action.

18. BRANSON CITY is a private Missouri corporation owned and controlled by BALLINGER and WEAVER. Its principal place of business is Jackson, Tennessee. At various times from in or about September 2000 to at least in or about October 2002, through BALLINGER, WEAVER, LARSCHEID, MORRIS, OZARK, ROBERTS, UNIVERSAL LEASING, WALKER, and the sales force, BRANSON CITY raised at least $10.5 million through the fraudulent offer and sale of securities in unregistered transactions induced through, among other things, use of interstate means. From in or about April 2002 to in or about July 2002, BRANSON CITY transferred approximately $1.3 million in ill-gotten BRANSON CITY investors' funds, indirectly, to BALLINGER and WEAVER, which they used to, among other things, fund a failed attempt to purchase a stake in a publicly traded company. BRANSON CITY has also received at least $1.4 million in ill-gotten gains from RESORT HOTELS. At no time was a registration statement in effect with the Commission or on file as to BRANSON CITY or its securities.

19. RESORT HOTELS is a private Nevada corporation owned and controlled by BALLINGER and WEAVER. Its principal place of business is Seminole, Florida. At various times from in or about June 2002 to in or about August 2003, through BALLINGER, KOVACHEV, LARSCHEID, MORRIS, OZARK, RESORT HOTELS, ROBERTS, SEARS, WALKER and WEAVER, RESORT HOTELS raised approximately $17.5 million through the fraudulent offer and sale of securities in unregistered transactions induced through, among other things, interstate means . At no time was a registration statement in effect with the Commission or on file as to RESORT HOTELS or its securities.

20. UNIVERSAL LEASING is a private Nevada corporation. Its principal place of business is Tarpon Springs, Florida. Through UNIVERSAL LEASING, MORRIS recruited sales agents to offer and sell BRANSON CITY's securities. UNIVERSAL LEASING also processed new BRANSON CITY investor documentation, collected and distributed ill-gotten BRANSON CITY investors' funds to BRANSON CITY, ROBERTS, WALKER, MORRIS, the sales force, and others. At no time was UNIVERSAL LEASING registered with the Commission in any capacity.

21. OZARK is a Missouri corporation. Its principal place of business is Branson, Missouri. From in or about November 2001 to in or about August 2003, BRANSON CITY and RESORT HOTELS transferred approximately $4.7 million of new investors' funds to OZARK, the majority of which OZARK, in turn, used to pay existing investors to mislead them into believing their investments in RESORT HOTELS were profitable. OZARK has received at least $500,000 in undisclosed "loans" from BRANSON CITY and RESORT HOTELS. In addition, each month, OZARK receives a 1% commission on RESORT HOTELS' gross securities sales for the prior month.

THE FRAUDULENT CONDUCT

I. THE FRAUDULENT BRANSON CITY SECURITIES OFFERING

22. In or about early 2000, BALLINGER and WEAVER acquired or formed a private Missouri corporation named Forever Country Theatres, Inc., and thereafter changed its name to BRANSON CITY and devised a fraudulent securities offering scheme ("fraudulent BRANSON CITY securities offering") involving the offer and sale of securities issued by BRANSON CITY in unregistered transactions induced through, among other things, use of the means and instrumentalities of interstate commerce, and the mails.

23. In furtherance of the scheme, BALLINGER and WEAVER determined the nominal structure of the security BRANSON CITY would offer and sell investors: a lease of a room for one week per year, for twenty-five years, in a hotel purportedly owned by BRANSON CITY ("BRANSON CITY unit").

24. In furtherance of the fraudulent BRANSON CITY securities offering, BALLINGER and WEAVER directed the production of fraudulent promotional materials (collectively, the "fraudulent BRANSON CITY promotional materials"), and thereafter directly or indirectly, distributed these materials to the sales force through the mails knowing the sales force would use the fraudulent promotional materials to induce investors to purchase the BRANSON CITY units, and the sales force, in fact, did so.

25. The fraudulent BRANSON promotional materials represented that purchasers of the BRANSON CITY units had three options: (i) personally use the units assigned to them at times specified by BRANSON CITY; (ii) select a third party to sublease their units for them; or, (iii) sublease the units themselves.

26. The fraudulent BRANSON CITY promotional materials also represented that BRANSON CITY intended to refurbish its resort properties with the proceeds of the offering.

27. The fraudulent BRANSON promotional materials also represented that investors could earn "double-digit" returns from renting their units.

28. The fraudulent promotional BRANSON CITY materials also represented that after BRANSON CITY refurbished its resort properties, investors had the right to, among other things, "have their principal returned."

29. In furtherance of the fraudulent BRANSON CITY securities offering, BALLINGER and WEAVER also: (i) drafted a lease agreement, which served as BRANSON CITY's subscription documentation; (ii) formed or acquired a sales force; (iii) hired and supervised office staff; (iv) trained sales agents; and (v) answered sales agents' marketing inquiries.

30. In or about August 2000, in furtherance of the fraudulent BRANSON CITY securities offering, at WEAVER's direction, BRANSON CITY hired ROBERTS. Thereafter, ROBERTS established BRANSON CITY's sales office and recruited sales agents.

31. ROBERTS received a 3% commission on sales of BRANSON CITY's (and later RESORT HOTELS') securities brokered by sales agents he recruited.

32. In furtherance of the fraudulent BRANSON CITY securities offering, ROBERTS orally represented to sales agents that purchasers of BRANSON CITY's units had the right to get their money back two years after investing knowing that the sales agents would repeat this misrepresentation to investors to induce them to purchase BRANSON CITY'S units, which they did.

33. In furtherance of the fraudulent BRANSON CITY securities offering, ROBERTS also reviewed and disseminated to sales agents, through the mails, the fraudulent BRANSON CITY promotional materials produced by BALLINGER and WEAVER, including a brochure that touted the potential for investors to earn "double-digit returns," and falsely represented that investors would "have their principal returned."

34. In or about September 2000, through the sales force, BRANSON CITY began fraudulently offering and selling BRANSON CITY's units to investors through interstate means for $6,000 per unit based on false and misleading representations that: (i) the proceeds of the BRANSON CITY offering would be: (ii) used to purchase and refurbish BRANSON CITY's resort properties, (iii) returned to investors after two years; and (iv) that investors could earn double-digit returns from renting their units.

35. In or about September 2000, in furtherance of the fraudulent BRANSON CITY securities offering, at BALLINGER and WEAVER's direction, BRANSON CITY entered into an arrangement with Reliable Property Management and Real Estate ("Reliable"), Branson, Missouri property management company, and thereafter steered Branson City investors to Reliable under the false pretense that Reliable was a subleasing agent that would sublease their units for them. In fact, Reliable was merely a conduit through which BRANSON CITY transferred new investors' funds to existing investors to mislead them into believing their units were profitable.

36. In or about January 2001, in furtherance of the fraudulent BRANSON CITY securities offering, BALLINGER and WEAVER directed WALKER, an attorney, to form a Florida corporation called Universal Financial Leasing, Inc. ("Universal Leasing-Florida").

37. From in or about January 2001 to in or about June 2001, in furtherance of the fraudulent BRANSON CITY securities offering, Universal Leasing-Florida handled investors' funds and served as BRANSON CITY's primary sales and marketing agent.

38. In or about Spring 2001, in furtherance of the fraudulent BRANSON CITY securities offering, BALLINGER and WEAVER appointed WALKER vice-president of BRANSON CITY, in which capacity WALKER signed and executed new investors' lease agreements which, with WALKER's knowledge, were, in turn, returned to investors, through the mails, to further create the false impression that the BRANSON CITY offering was legitimate.

39. In or about May 2001, in furtherance of the fraudulent BRANSON CITY securities offering, BALLINGER and WEAVER arranged with LARSCHEID to have OZARK, a purported subleasing agent, assume responsibility for "servicing" BRANSON CITY investors' units and become the conduit through which to transfer new investors' funds to existing investors. At about the same time, in furtherance of the fraudulent BRANSON CITY securities offering, ROBERTS became an OZARK employee.

40. Beginning in or about July 2001, the majority of BRANSON CITY's investors were steered to OZARK.

41. From in or about July 2001 to September 2003, while an employee of OZARK, in furtherance of the fraudulent BRANSON CITY securities offering, with LARSCHEID's knowledge and authorization, ROBERTS distributed copies of OZARK's subleasing agreement to sales agents through the mails, which included income distribution schedules that falsely represented that OZARK would pay investors annualized profits of at least 11% from income derived from OZARK's subleasing of investors' BRANSON CITY units. LARSCHEID and ROBERTS knew that the sales force would use these false representations to induce investors to purchase BRANSON CITY's units and they, in fact, did so.

42. In furtherance of the fraudulent BRANSON CITY securities offering, ROBERTS also processed new investors' subleasing documentation and provided BRANSON CITY and OZARK with reports regarding the amount of money OZARK needed to pay to existing investors to keep the fraudulent BRANSON CITY securities offering afloat.

43. In furtherance of the fraudulent BRANSON CITY securities offering, LARSCHEID and ROBERTS told sales agents that OZARK would pay investors annualized profits of at least 11% derived from OZARK's subleasing of investors' BRANSON CITY units. LARSCHEID and ROBERTS knew these representations were false and misleading and that the sales force would repeat these representations to investors to induce them to purchase BRANSON CITY's units, and they, in fact, did so.

44. OZARK, in fact, made no meaningful attempt to sublease investors' BRANSON CITY units. Instead, from in or about July 2001 to in or about August 2003, OZARK has transferred money received from BRANSON CITY and RESORT HOTELS to existing investors to mislead them into believing their investments were profitable.

45. In or about June 2001, in furtherance of the fraudulent BRANSON CITY securities offering, MORRIS formed UNIVERSAL LEASING as a Nevada corporation, and in or about July 2001, UNIVERSAL LEASING assumed the sales and marketing functions Universal Leasing-Florida had been performing up to that time.

46. At various times from in or about June 2001 to October 2002, in furtherance of the fraudulent BRANSON CITY securities offering, through UNIVERSAL LEASING, MORRIS recruited and trained sales agents, managed the sales force, and determined sales agents' compensation. Morris received a commission of at least 2-10% from the sales of all of BRANSON CITY's (and later RESORT HOTELS') securities.

47. At various times from in or about June 2001 to October 2002, in furtherance of the fraudulent BRANSON CITY securities offering, UNIVERSAL LEASING processed new investor documentation.

48. At various times from in or about June 2001 to October 2002, in furtherance of the fraudulent BRANSON CITY securities offering, MORRIS orally misrepresented to sales agents at training seminars that: (i) investors' principal would be used to purchase and refurbish BRANSON CITY's resort properties; (ii) investors could earn annualized profits equal to at least 11% if they elected to sublease their units through OZARK; and (iii) investors could get their money back two years after investing, knowing that the sales force would repeat these misrepresentations to investors in the offering and sale of the units.

49. From in or about September 2000 to at least in or about October 2002, BRANSON CITY, at various times through BALLINGER, WEAVER, LARSCHEID, MORRIS, OZARK, ROBERTS, UNIVERSAL LEASING, WALKER, and the sales force, raised at least $10.5 million through the fraudulent offer and sale of BRANSON CITY's units in unregistered transactions.

50. At no time did BALLINGER, WEAVER, LARSCHEID, MORRIS, OZARK, ROBERTS, UNIVERSAL LEASING, or WALKER disclose to investors LARSCHEID's criminal record or WEAVER's discliplinary history.

II. THE FRAUDULENT RESORT HOTELS SECURITIES OFFERING

51. In or about May 2002, BALLINGER and WEAVER directed WALKER to form RESORT HOTELS and, thereafter, with KOVACHEV, LARSCHEID, MORRIS, OZARK, ROBERTS, SEARS, devised and conducted a second fraudulent securities offering ("fraudulent RESORT HOTELS securities offering") involving the offer and sale of investments ("RESORT HOTELS' units") with the same essential characteristics as BRANSON CITY's units, but involving a different hotel.

52. In furtherance of the fraudulent RESORT HOTELS securities offering, BALLINGER and WEAVER appointed WALKER president, secretary and treasurer of RESORT HOTELS in which capacity WALKER was the sole signatory on RESORT HOTELS' bank accounts through which ill-gotten investors' funds were transferred.

53. In or about the summer of 2002, in furtherance of the fraudulent RESORT HOTELS' securities offering, RESORT HOTELS hired ROBERTS. Thereafter, at WEAVER's direction, ROBERTS established RESORT HOTELS' operations in Tampa, Florida.

54. In or about June 2002, in furtherance of the fraudulent RESORT HOTELS securities offering, BALLINGER hired SEARS to, among other things, process new investors' documentation.

55. In or about July 2002, in furtherance of the fraudulent RESORT HOTELS securities offering, RESORT HOTELS hired KOVACHEV at BALLINGER and WEAVER's direction.

56. In furtherance of the fraudulent RESORT HOTELS securities offering, BALLINGER, WEAVER, KOVACHEV, and SEARS prepared and caused to be distributed to the sales force, through the mails, fraudulent promotional materials (collectively, the "fraudulent RESORT HOTELS promotional materials").

57. The fraudulent RESORT HOTELS promotional materials represented that purchasers of the RESORT HOTELS' units had three options: (i) personally use the units assigned to them at times specified by RESORT HOTELS; (ii) select a third party to sublease their units for them; or (iii) sublease the units themselves.

58. The fraudulent RESORT HOTELS promotional materials also represented if purchasers of the RESORT HOTELS' units wished to have a third-party sublease their units, they could select a subleasing agent from a list of independent agents that RESORT HOTELS would provide them.

59. In furtherance of the fraudulent RESORT HOTELS securities offering, BALLINGER, KOVACHEV, LARSCHEID, MORRIS, OZARK, ROBERTS, SEARS, and WEAVER, directly or indirectly, made false and misleading representations to the sales force, including that purchasers of the RESORT HOTELS units could: (1) could earn double-digit returns if they purchased Resort Hotels' units and allowed third party subleasing agents to sublease them, and (2) could get their money back two years after investing. BALLINGER, KOVACHEV, LARSCHEID, MORRIS, OZARK, ROBERTS, SEARS, and WEAVER knew that the sales force would repeat these representations to investors to induce them to purchase RESORT HOTELS' units, and they, in fact, did so.

60. In furtherance of the fraudulent RESORT HOTELS securities offering, at KOVACHEV's direction, SEARS prepared a lease agreement to create the false impression the RESORT HOTELS offering was legitimate.

61. In or about June 2002, RESORT HOTELS, through the sales force, began fraudulently offering and selling RESORT HOTELS' units through interstate means, for $4,500 per unit. Sometime thereafter, RESORT HOTELS reduced the price of its units to $3,500.

62. In furtherance of the fraudulent RESORT HOTELS securities offering, WALKER, and later SEARS, executed RESORT HOTELS' investor lease agreements knowing that RESORT HOTELS would, thereafter, return the executed lease agreements, through the mails, to create the false impression that the fraudulent RESORT HOTELS offering was legitimate.

63. From in or about July 2002 to in or about September 2003, in furtherance of the fraudulent RESORT HOTELS securities offering, RESORT HOTELS steered investors to OZARK under the false pretense that OZARK would pay them annualized returns of 11% derived from OZARK subleasing their units. In fact, there was no meaningful subleasing activity. In reality, OZARK was merely a conduit through which RESORT HOTELS transferred new investors' funds to existing investors to mislead them into believing their units were profitable.

64. At various times from in or about August 2002 to August 2003, in furtherance of the fraudulent RESORT HOTELS securities offering, at BALLINGER, WEAVER, KOVACHEV, and ROBERTS's direction, WALKER and SEARS transferred at least $3.6 million in RESORT HOTELS' investors' funds to OZARK, a majority of which, OZARK, in turn, transferred to existing investors to mislead them into believing their investments in RESORT HOTELS were profitable. WALKER and SEARS also transferred at least $2.3 million in ill-gotten RESORT HOTELS' investors' funds, directly and indirectly, to the DEFENDANTS for their personal benefit.

65. In furtherance of the fraudulent RESORT HOTELS securities offering, at BALLINGER and WEAVER's direction, WALKER formed certain entities that served as a conduit through which ill-gotten BRANSON CITY and RESORT HOTELS investors' funds were transferred to one or more of the DEFENDANTS for their personal benefit. The entities were controlled by BALLINGER, WEAVER and, at various times, KOVACHEV.

66. In or about January 2003, in furtherance of the fraudulent RESORT HOTELS securities offering, KOVACHEV, with WEAVER's approval, appointed SEARS vice president of RESORT HOTELS' operations, and SEARS replaced WALKER as the sole signatory on RESORT HOTELS' bank accounts.

67. In or about March 2003, in furtherance of the fraudulent RESORT HOTELS securities offering, at WEAVER's direction, KOVACHEV was appointed RESORT HOTELS' president, secretary, and treasurer, retroactive to July 2002.

68. From in or about June 2002 to in or about August 2003, RESORT HOTELS, at various times through BALLINGER, KOVACHEV, LARSCHEID, MORRIS, OZARK, ROBERTS, SEARS, WEAVER and the sales force, raised at least $17.5 million through the fraudulent offer and sale of RESORT HOTELS' securities in unregistered transactions.

69. At no time during the fraudulent offer and sale of RESORT HOTEL's securities did the DEFENDANTS disclose to investors BALLINGER, LARSCHEID, or SEARS' criminal records or WEAVER's disciplinary history.

III. COMMON FEATURES OF THE BRANSON CITY AND RESORT HOTELS FRAUDULENT SECURITIES OFFERINGS

70. BRANSON CITY's and RESORT HOTELS' units have been marketed as investments.

71. Many investors who have purchased BRANSON CITY's and RESORT HOTELS' securities are elderly, unsophisticated and non-accredited.

72. Although BRANSON CITY and RESORT HOTELS were required to do so, neither has provided non-accredited investors with the type of financial and other information typically contained in a registration statement.

73. At no time was a registration statement on file with the Commission, or in effect, with respect to BRANSON CITY's and RESORT HOTELS' securities.

74. The fraudulent BRANSON CITY and RESORT HOTELS securities offering schemes may soon collapse, causing at least 600 investors in 30 states to suffer significant losses. Specifically, in or about the beginning of October 2003, OZARK notified BRANSON CITY and RESORT HOTELS investors that it was terminating its servicing agreements with them, and suspending income payments, because the "continuation of the program is in jeopardy due to the uncertainty of [the] outcome of the SEC's investigation."

COUNT I

Violations of Sections 5(a) and 5(c) of the Securities Act
[15 U.S.C. 77e(a) and 77e(c)]

(Against all DEFENDANTS)

75. Paragraphs 1 through 74 are realleged and incorporated by reference as if set forth fully herein.

76. At various times between in or about September 2000 to the present, DEFENDANTS, directly and indirectly, made use of the means and instruments of transportation and communication in interstate commerce and of the mails to sell and offer to sell securities in the form of investment contracts.

77. No registration statements have been filed with the Commission or are in effect with respect to the securities offered and sold by the DEFENDANTS.

78. By reason of the activities described in Paragraphs 75 through 77 above, DEFENDANTS have violated and, unless enjoined, will continue to violate Sections 5(a) and 5(c) of the Securities Act [15 U.S.C. 77e(a) and 77e(c)].

COUNT II

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

(Against All DEFENDANTS)

79. Paragraphs 1 through 74 are realleged and incorporated by reference as if set forth fully herein.

80. At various times between in or about September 2000 to the present, DEFENDANTS, in the offer and sale of securities in the form of investment contracts, 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, employed devices, schemes and artifices to defraud.

81. In the offer and sale of the securities described above, and as part of the scheme to defraud, DEFENDANTS made untrue statements of material facts to purchasers and prospective purchasers, and/or omitted to state to purchasers and prospective purchasers material facts necessary to make the statements made, in the light of the circumstances under which they were made, not misleading.

82. DEFENDANTS knew or were reckless in not knowing of their activities as set forth in paragraphs 79 through 81 above.

83. By reason of the activities described in paragraphs 79 through 82 above, DEFENDANTS have violated and, unless enjoined, will continue to violate Section 17(a)(1) of the Securities Act [15 U.S.C. 77q(a)(1)].

COUNT III

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

(Against All DEFENDANTS)

84. Paragraphs 1 through 74 are realleged and incorporated by reference as if set forth fully herein.

85. At various times between in or about September 2000 to the present, DEFENDANTS, in the offer and sale of securities in the form of investment contracts, 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, obtained money and property by means of untrue statements of material fact, and/or omissions 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 transactions, practices, or courses of business which operated as a fraud and deceit upon the purchasers.

86. By reason of the activities described in paragraphs 84 and 85 above, DEFENDANTS have violated and, unless enjoined, will continue to violate 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] Promulgated Thereunder

(Against All DEFENDANTS)

87. Paragraphs 1 through 74 are realleged and incorporated by reference as if set forth fully herein.

88. At various times between in or about September 2000 to the present, DEFENDANTS, in connection with the purchase and sale of the securities described above, directly or indirectly, by the use of the means and instrumentalities of interstate commerce and of the mails, employed devices, schemes, and artifices to defraud; made untrue statements of material fact and 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 as fraud and deceit upon the investors as set forth in paragraphs 87 and 88 above.

89. DEFENDANTS knew or were reckless in not knowing of their activities as set forth in paragraphs 87 and 88 above.

90. By reason of the activities described in paragraphs 87 through 89 above, DEFENDANTS have violated and, unless enjoined, will continue to violate Section 10(b) of the Exchange Act [15 U.S.C. 78j(b)] and Rule 10b-5 [17 C.F.R. 240.10b-5] promulgated thereunder.

COUNT V

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

(Against UNIVERSAL LEASING, MORRIS, and ROBERTS)

91. Paragraphs 1 through 74 are realleged and incorporated by reference as if set forth fully herein.

92. At various times between in or about at least July 2001 to the present, MORRIS, ROBERTS, and UNIVERSAL LEASING, directly and indirectly, 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 in accordance with Section 15(b) of the Exchange Act [15 U.S.C. 78o(b)].

93. By reason of the activities described in paragraphs 91 and 92 above, UNIVERSAL LEASING, MORRIS, and ROBERTS have violated and, unless enjoined, will continue to violate Section 15(a) of the Exchange Act [15 U.S.C. 78o(a)].

RELIEF REQUESTED

WHEREFORE, the Plaintiff, United States Securities and Exchange Commission, respectfully requests that the Court:

I.

Find that the DEFENDANTS committed the violations charged and alleged herein.

II.

Issue a Temporary Restraining Order, an Order of Preliminary Injunction and an Order of Permanent Injunction, in forms consistent with Rule 65(d) of the Federal Rules of Civil Procedure, temporarily, preliminarily and permanently restraining and enjoining defendants, PATRICK BALLINGER, KOSTA S. KOVACHEV, LEE E. LARSCHEID, LINDA M. SEARS, TODD F. WALKER, DENNIS R. WEAVER, BRANSON CITY LIMITS, INC., OZARK TICKET AND TRAVEL, INC., RESORT HOTELS, INC. and their officers, agents, servants, employees, attorneys and those persons in active concert or participation with them who receive actual notice of the Order, by personal service or otherwise, and each of them from, directly or indirectly, engaging in the transactions, acts, practices or courses of business described above, or in conduct of similar purport and object, in violation of Sections 5(a), 5(c),17(a)(1), 17(a)(2) and 17(a)(3) of the Securities Act [15 U.S.C. 77e(a), 77e(c), 77q(a)(1), 77q(a)(2) and 77q(a)(3)], Section 10(b) of the Exchange Act [15 U.S.C. 78j(b)] and Rule 10b-5 [17 C.F.R. 240.10b-5] promulgated thereunder.

III.

Issue a Temporary Restraining Order, an Order of Preliminary Injunction, and an Order of Permanent Injunctions, in forms consistent with Rule 65(d) of the Federal Rules of Civil Procedure, permanently restraining and enjoining defendants BENNY G. MORRIS, DARIN W. ROBERTS, UNIVERSAL FINANCIAL LEASING, INC. and their officers, agents, servants, employees, attorneys and those persons in active concert or participation with them who receive actual notice of the Order, by personal service or otherwise, and each of them from, directly or indirectly, engaging in the transactions, acts, practices or courses of business described above, or in conduct of similar purport and object, in violation of Sections 5(a), 5(c),17(a)(1), 17(a)(2) and 17(a)(3) of the Securities Act [15 U.S.C. 77e(a), 77e(c), 77q(a)(1), 77q(a)(2) and 77q(a)(3)], Sections 10(b) and 15(a) of the Exchange Act [15 U.S.C. 78j(b ) and 78o(a)] and Rule 10b-5 [17 C.F.R. 240.10b-5] promulgated thereunder.

IV.

Issue an Order requiring all of the DEFENDANTS to disgorge the ill-gotten gains that they received as a result of their wrongful conduct, including prejudgment interest.

V.

Issue an Order imposing appropriate civil penalties against PATRICK BALLINGER, KOSTA S. KOVACHEV, LEE E. LARSCHEID, BENNY G. MORRIS, LINDA M. SEARS, DARIN W. ROBERTS, TODD F. WALKER, DENNIS R. WEAVER, OZARK TICKET AND TRAVEL, INC., and UNIVERSAL FINANCIAL LEASING, INC. in accordance with 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)].

VI.

Issue an Order temporarily restraining and enjoining defendants PATRICK BALLINGER, KOSTA S. KOVACHEV, LEE E. LARSCHEID, BENNY G. MORRIS, DARIN W. ROBERTS, LINDA M. SEARS, TODD F. WALKER, DENNIS R. WEAVER, BRANSON CITY LIMITS, INC., OZARK TICKET AND TRAVEL, INC., RESORT HOTELS, INC. and UNIVERSAL FINANCIAL LEASING, INC. and their respective officers, agents, servants, employees, attorneys and those persons in active concert or participation with them who receive actual notice of the Order, by personal service or otherwise, and each of them from, directly or indirectly:

A. transferring, selling, assigning, pledging, dissipating, concealing or otherwise disposing of, in any manner, any funds, assets, accounts or other property belonging to PATRICK BALLINGER, KOSTA S. KOVACHEV, LEE E. LARSCHEID, BENNY G. MORRIS, DARIN W. ROBERTS, LINDA M. SEARS, TODD F. WALKER, DENNIS R. WEAVER, BRANSON CITY LIMITS, INC., OZARK TICKET AND TRAVEL, INC., RESORT HOTELS, INC. or UNIVERSAL FINANCIAL LEASING, INC., or directly or indirectly, in these defendants' respective possession, custody or control, or in which defendants PATRICK BALLINGER, KOSTA S. KOVACHEV, LEE E. LARSCHEID, BENNY G. MORRIS, DARIN W. ROBERTS, LINDA M. SEARS, TODD F. WALKER, DENNIS R. WEAVER, BRANSON CITY LIMITS, INC., OZARK TICKET AND TRAVEL, INC., RESORT HOTELS, INC. and UNIVERSAL FINANCIAL LEASING, INC. has a beneficial interest, wherever located;

B. transferring, selling, assigning, pledging, dissipating, concealing or otherwise disposing of in any manner, any funds, assets, accounts or other property into which BRANSON CITY LIMITS, INC. or RESORT HOTELS, INC. investor funds were deposited; and

C. destroying, mutilating, concealing, altering or disposing of, in any manner, any of the books, records, documents, correspondence, brochures, manuals, obligations, belonging to, or directly or indirectly in the possession, custody or control of PATRICK BALLINGER, KOSTA S. KOVACHEV, LEE E. LARSCHEID, BENNY G. MORRIS, DARIN W. ROBERTS, LINDA M. SEARS, TODD F. WALKER, DENNIS R. WEAVER, BRANSON CITY LIMITS, INC., OZARK TICKET AND TRAVEL, INC., RESORT HOTELS, INC. and UNIVERSAL FINANCIAL LEASING, INC., in whatever form, including electronic, and wherever located.

VII.

Issue a Temporary Restraining Order and Orders of Preliminary and Permanent Injunction, in a form consistent with Rule 65(d) of the Federal Rules of Civil Procedure, restraining and enjoining defendants PATRICK BALLINGER, KOSTA S. KOVACHEV, LEE E. LARSCHEID, BENNY G. MORRIS, DARIN W. ROBERTS, LINDA M. SEARS, TODD F. WALKER, DENNIS R. WEAVER, BRANSON CITY LIMITS, INC., OZARK TICKET AND TRAVEL, INC., RESORT HOTELS, INC. and UNIVERSAL FINANCIAL LEASING, INC., their officers, agents, servants, employees, attorneys and those persons in active concert or participation with them who receive actual notice of the Order, by personal service or otherwise, and each of them from, directly or indirectly, soliciting, accepting, or receiving any funds from individuals or entities for the purpose of investment.

VIII.

Grant such other and further relief as the Court deems appropriate.

IX.

Retain jurisdiction of this action in accordance with the principles of equity and the Federal Rules of Civil Procedure in order to implement and carry out the terms of all orders and decrees that may be entered and entertain any suitable application or motion for additional relief within the jurisdiction of this Court.

Dated: November 10, 2003

Respectfully submitted,

SECURITIES AND EXCHANGE COMMISSION

By:_______________________________
Alexander T. Moore, IL Bar No. 6220656
Christopher K. Veatch, IL Bar No. 6276097
175 West Jackson Boulevard, Suite 900
Chicago, Illinois 60604
Tel: (312) 353-7390
Fax: (312) 353-7398


http://www.sec.gov/litigation/complaints/comp18450.htm


Modified: 11/13/2003