U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 20782 / October 16, 2008
United States of America v. Michael P. Luckett, Criminal Action No. 1:08-CR-10087-WGY (D. Mass.)
SEC v. Transnational Fund, Inc., a/k/a National Savings, and Michael Luckett, Civil Action No. 07-CA-11774-RWZ (D. Mass.)
Defendant in SEC Enforcement Action Sentenced on Related Criminal Charges in Connection With Fraudulent Offering of CD-Like Securities
The Securities and Exchange Commission announced today that on October 15, 2008, Michael P. Luckett, 37, a former resident of Boston, Massachusetts currently residing in Gainesville, Georgia and a defendant in a previously-filed Commission enforcement action, was sentenced by U.S. District Judge William G. Young to 36 months imprisonment, plus three years of supervised release, and was ordered to pay restitution of $97,387 in a prosecution brought by the U.S. Attorney for the District of Massachusetts. Luckett had previously pled guilty to four counts of mail fraud in connection with a scheme to defraud investors through the offer of so-called "Transnational Certificates" that Luckett promoted as though they were high-yield certificates of deposit.
The Commission previously filed a civil injunctive action against Luckett and Transnational Fund, Inc. ("Transnational"), based on similar conduct. The Commission filed its complaint on September 21, 2007, and obtained a temporary restraining order, asset freeze, and other relief that same day. The Commission's complaint alleges that, from July 20, 2007, through the date of the complaint, Transnational and Luckett conducted a fraudulent offering of unregistered securities known as "Transnational Certificates" using Transnational's websites, which the court ordered Luckett and Transnational to cease operating. According to the Commission's complaint, the defendants promised to pay investors at a rate of 6.35% annual percentage yield in nine months. The complaint alleges that at least 15 investors in six different states, including Arizona, Kansas, Michigan, Missouri, Pennsylvania, and Texas, purchased these Certificates for at least $432,400. The Complaint further alleges that, in soliciting investors, Transnational and Luckett made material misrepresentations and omissions in that they: (1) failed to disclose to investors and potential investors that Luckett would use investor funds for personal purposes; (2) misrepresented that Transnational was just like a bank; and (3) misrepresented that Transnational had been in business for years. The Complaint alleges that Luckett took thousands of dollars from at least one Transnational bank account into which he had deposited investor funds and used the money to pay, among other things, rent on a luxury condominium in Boston and the lease on a Toyota automobile. According to the Complaint, he also used bankcards issued on bank accounts holding investor funds for various personal living expenses.
The Commission's civil injunctive action remains pending.
For further information, please see: Litigation Release No. 20294 (September 24, 2007).