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Litigation Release No. 20582 / May 16, 2008

Securities and Exchange Commission v. Safevest, LLC, et al., (C.D. Cal.), Civil Action No. SACV08-00473 JVS (MLGx)

Preliminary Injunction Entered in $25 Million Dollar Fraud Action in Orange County

On May 12, 2008, the Honorable James V. Selna, United States District Court Judge for the Central District of California, entered an order preliminary enjoining Laguna Hills, California based Safevest, LLC and its principals, Jon G. Ervin, Sr., age 61 and a resident of Mission Viejo, California, and John V. Slye, age 68 and a resident of Arlington, Virginia, from future violations of the antifraud provisions of the federal securities laws. In addition to the preliminary injunction, the order continues the previously imposed asset freeze and appoints Thomas A. Seaman as permanent receiver over defendant Safevest, LLC.

The Commission's complaint, filed in federal court in Santa Ana, California on May 1, 2008, alleges that since at least May 2007, the defendants have raised more than $25 million from more than 500 investors, including many from the Christian community, misrepresenting that investor funds would be pooled and invested in commodity futures trading, that the investment would generate daily profits ranging from 1.5% to 1.9%, and that investors could receive their money back within 72 hours of requesting it. In reality, according to the complaint, no investor money was invested in futures trading, and requests by investors for withdrawal of their funds have either not been honored or have only been partially honored. The complaint further alleges that, undisclosed to investors, the defendants paid more than $18 million to investors in Ponzi-like fashion. The defendants also allegedly misappropriated investor funds for the personal use of Ervin, Slye, and their family members.

Pursuant to the order entered May 12, 2008, defendants Safevest, Ervin, and Slye are preliminarily enjoined from future violations of the antifraud provisions of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The Commission seeks permanent injunctions, disgorgement, and civil penalties against all defendants.

Investors may direct their inquiries to the permanent receiver, Thomas A. Seaman, at (949) 222-0305 or at mail@safevestreceiver.com.

For further information, see Litigation Release No. 20552 (May 2, 2008).



Modified: 05/16/2008