U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 20239 / August 13, 2007
Securities and Exchange Commission v. Tri Energy, Inc., H & J Energy Company, Inc., Marina Investors Group, Inc., Lowell Decker, Robert Jennings, Henry Jones, Arthur Simburg, Mildred Stultz, DJM, LLC, Financial MD, Inc., Financial MD and Associates, Inc., Daniel J. Merriman, Global Village Records, and La Vie D'Argent, as defendants, and R.P.J. Investment Group, Inc., T.M.A. Investment Enterprises, Thomas Avery, and Wing NGA Lau, a/k/a Adrienne Lau, as relief defendants, Case No. ED CV 05-00351 AG(MANx) (C.D. California)
SEC Settles Against Tri Energy, Inc. and Defendants Arthur Simburg, Robert Jennings, Daniel Merriman, Mildred Stultz and Relief Defendant Adrienne Lau in a Massive Affinity Fraud And Ponzi Scheme
The Securities and Exchange Commission ("Commission") announced today that the Honorable Andrew Guilford, U.S. District Judge for the Central District of California, entered Final Judgments on August 9, 2007, as to defendants Tri Energy, Inc., H & J Energy Company, Inc., Robert Jennings, Arthur Simburg, and La Vie D'Argent (collectively the "Tri Energy Defendants"), and also against Daniel J. Merriman and his companies DJM, LLC, Financial MD, Inc., and Financial MD and Associates (collectively the "Merriman Defendants"). A final judgment was also entered against defendant Mildred Stultz on May 17, 2007, and against relief defendant, Nga Wing Lau a/k/a Adrienne Lau, on August 9, 2007. The Tri Energy Defendants, the Merriman Defendants, and Stultz were each permanently enjoined from future violations of Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933 ("Securities Act"), and Section 10(b) of the Securities Exchange Act of 1934 ("Exchange Act") and Rule 10b-5 thereunder. The Tri Energy Defendants, the Merriman Defendants, and Stultz, who each consented to the entry of the judgments without admitting or denying the allegations of the Commission's Amended Complaint, are specifically enjoined from soliciting investments of the type at issue in the Commission's lawsuit. The Court also ordered the Tri Energy Defendants to pay civil penalties, disgorgement, and pre-judgment interest to be determined by the Court at a later date. The Merriman Defendants were ordered to pay disgorgement in the aggregate amount of $101,500 plus pre-judgment interest of $16,371 and a $75,000 civil penalty. Stultz was ordered to pay disgorgement of $174,100 and pre-judgment interest of $25,098.84, which were waived based on her financial condition. Finally, Lau was ordered to pay disgorgement of $200,000 plus pre-judgment interest of $20,000.
The Commission's Amended Complaint, filed on August 10, 2006, alleged that the aforementioned defendants, and others, perpetrated a massive affinity fraud and ponzi scheme involving a purported coal mine venture and a so-called international "gold deal." The Complaint alleged that defendants had been telling investors that these extraordinary profits were to be generated in part by helping an unnamed Saudi Arabian prince move gold from Israel through Luxembourg to the United Arab Emirates. In reality, according to the Complaint, although some money had been paid out to investors, those funds appeared to have come from new investor money, and substantial amounts of investor funds had been transferred to bank accounts controlled by some of the defendants and relief defendants. Defendants recruited potential victims through claims that their investments were aimed, at least in part, at raising money for humanitarian and religious efforts. The defendants promised their victims outlandish returns on their investments of 100-1000% in as little as 60 days. Over 500 investors lost over tens of millions of dollars in the scheme.