U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 20459 / February 15, 2008
Securities and Exchange Commission v. Ameer Khan, Case No. 08-60221-CIV-Graham (S. D. Fla.) (February 15, 2008.)
Securities and Exchange Commission v. Raquel Kohler, Case No.-08-60219-CIV-Dimitrouleas (S. D. Fla.) (February 15, 2008.)
Securities and Exchange Commission v. Stephen Ziegler, Case No. 08-60220-CIV-Seitz (S. D. Fla.) (February 15, 2008.)
The Securities and Exchange Commission announced today that it filed complaints against Defendants Ameer Khan, Raquel Kohler and Stephen Ziegler, charging them with violations of the federal securities laws arising from their involvement in Mutual Benefits Corp.'s ("Mutual Benefits") offering fraud which raised more than $1 billion from approximately 30,000 investors. Khan served as the titular president and sole shareholder of Viatical Services, Inc., a purportedly independent company that claimed to track policies sold to Mutual Benefits' investors. Kohler was the former chief financial officer of Mutual Benefits and is a licensed certified public accountant. Ziegler served as Mutual Benefits' regulatory counsel.
The Commission's complaints charge Khan and Kohler with violating Section 10(b) of the Securities Exchange Act of 1934 ("Exchange Act") and Rule 10b-5 thereunder, and further charge Khan with violating Sections 5(a), 5(c) and 17(a) of the Securities Act of 1933. The Commission's complaint against Ziegler charges him with aiding and abetting Mutual Benefits' violations of Section 10(b) and Rule 10b-5 under the Exchange Act. The Commission seeks permanent injunctive relief against all three defendants. Khan and Kohler have consented to the entry of Final Judgments providing for full injunctive relief.
In addition to the civil actions against the defendants, on February 15, 2008, the Commission issued Orders pursuant to Rule 102(e)(2) of the Commission's Rules of Practice forthwith suspending Kohler and Ziegler from appearing or practicing before the Commission, based on the entries of a felony conviction against each of them.
On September 24, 2007, the Honorable Paul C. Huck, United States District Judge for the Southern District of Florida, sentenced Khan, Kohler, and Ziegler each to five years in prison, to be followed by three years of supervised release, and ordered each defendant to pay restitution in the amounts of $470 million (Kohler) and $826 million (Khan and Ziegler), jointly and severally with their convicted co-conspirators. On May 3, 2004, the Commission filed an emergency federal civil action seeking to halt Mutual Benefits' fraudulent securities offering.
All named defendants in the Commission's Mutual Benefits' action have settled, consenting to final judgments of permanent injunction and other relief, any paying $30 million in disgorgement and penalties.
For additional information, see Litigation Release No. 18698 (May 6, 2004), Litigation Release No. 19274 (June 20, 2005), Litigation Release No. 19480 (December 1, 2005), Litigation Release No. 19978 (January 24, 2007), and Litigation Release No. 20151 (June 13, 2007).