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U.S. Securities and Exchange Commission

U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 20362 / November 13, 2007

SEC v. Secure Investment Services, Inc., American Financial Services, Inc., Lyndon Group, Inc., Donald F. Neuhaus, and Kimberly A. Snowden, Case No. 2:07-CV-01724-LEK-CMK (E.D. Cal. August 23, 2007)

Commission Obtains Preliminary Injunction in Alleged $25 Million Ponzi Scheme

On November 7, 2007, the U.S. District Court for the Eastern District of California granted the Securities and Exchange Commission's request and issued a preliminary injunction order prohibiting defendants Donald Neuhaus, Kimberly Snowden, and three corporations they controlled from engaging in future violations of antifraud and registration provisions of the securities laws. The order includes provisions freezing Neuhaus and Snowden's assets except for future income up to a specific monthly pre-tax amount. The preliminary injunction order will remain in place until trial or further order of the Court.

The Commission's complaint alleges that Neuhaus of Redding, Calif., his daughter Snowden, and their company Secure Investment Services, Inc., orchestrated a Ponzi scheme that falsely promised safe and profitable "viatical" investments in life insurance policies while failing to disclose the dire financial condition of the investment venture. According to the complaint, many investors were elderly and invested their retirement savings. The complaint further alleges that Neuhaus and Snowden misled investors by providing them with life expectancy estimates certified by a convicted felon who falsely held himself out as a physician, and by representing that the investments were protected by bonding companies that were, in fact, unlicensed overseas firms with adverse regulatory histories.

When the Commission initiated the case, the Court appointed Michael J. Quilling as temporary receiver over Secure Investment Services, Inc. and the two other corporate defendants. On October 30, 2007, the Court issued an order appointing Mr. Quilling as permanent receiver. Investors seeking information may visit his website at www.secreceiver.com.

For more information on the case and to view the Commission's complaint, see Litigation Release No. 20252 (August 23, 2007).

 

http://www.sec.gov/litigation/litreleases/2007/lr20362.htm


Modified: 11/13/2007