U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 21756 / November 24, 2010

Securities and Exchange Commission v. Charles William Petty, II, et al., , Case No. 1:10-CV-3842 (N.D. Ga.)

SEC Charges Atlanta Resident with Securities Fraud

The United States Securities and Exchange Commission ("Commission") announced the filing of a civil injunctive action in Atlanta, Georgia on November 22, 2010, alleging that Charles William Petty, II and the companies he operates, Visionary Publishing International, LLC ("Visionary") and Virtual Properties Worldwide, Inc. ("Worldwide"), are engaging in an ongoing offering fraud in violation of the antifraud and securities provisions of the federal securities laws.

The Commission's complaint alleges that since at least 2007 to the present, Petty has offered and sold at least $236,000 of promissory notes (Notes) issued by the Visionary companies to at least eleven investors in Georgia, North Carolina, Texas, California, New Jersey, and Canada. The complaint alleges that the defendants generally told investors that the Notes were "safe and high-yielding" and that the Note proceeds would be invested in real estate or "real estate related projects." The defendants also told investors that each Note would be secured by a mortgage security deed on a particular property in Georgia, Tennessee, Alabama, North Carolina, or South Carolina at a loan to value ratio of no more than 60 to 75%. The complaint alleges that these representations were false because no mortgage security deeds on properties were ever created, and Petty admitted that the Note proceeds were not invested in real estate or real estate related projects. The complaint further alleges that the defendants' scheme is ongoing and that as recently as November 16, 2010, the defendants were posting messages on various Google Groups that solicit investors to purchase three month Notes that pay 18% quarterly which Petty describes as "72% Annualized Returns."

In its Complaint, the Commission alleges that the defendants violated Sections 5(a) and (c) and 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. Also on November 22, 2010, the court issued an order temporarily restraining defendants from violating these provisions, freezing their assets, providing for expedited discovery, prohibiting the destruction of documents and directing that they provide an accounting for the funds received. A hearing on the Commission's request for a preliminary injunction will be held on December 6, 2010.

 
http://www.sec.gov/litigation/litreleases/2010/lr21756.htm

Last modified: 11/24/2010