SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. Litigation Release No. 16073 / March 2, 1999 Securities and Exchange Commission v. Internet Telecommunications Albany System SMR, et al., (D.D.C. Civil Action No. 99CV00539) SEC FILES SUIT IN $1.2 MILLION SPECIALIZED MOBILE RADIO FRAUD The Commission today filed a complaint in the U.S. District Court for the District of Columbia alleging fraud in the nationwide sale of unregistered securities by unregistered brokers in three general partnerships organized to develop specialized mobile radio systems, i.e., paging systems, in Albany, New York, Reno, Nevada and Anchorage, Alaska. The Commission seeks disgorgement of the $1.2 million raised from investors from defendants John C. Trimpin, Michael E. Murray, Charles D. King, Ronald L. Tobin, Frederic A. Gladle, John Larson, Richard B. Parnell and several entities owned and controlled by these parties. The defendant partnerships are: Internet Telecommunications Albany System SMR, Internet Telecommunications Reno System SMR and Internet Telecommunications Anchorage System SMR (the SMR partnerships). The complaint seeks permanent injunctions and disgorgement, together with prejudgment interest, from all the defendants, and civil money penalties from all the defendants except the SMR partnerships. According to the complaint, Trimpin, acting through defendant Marjet Corp., a company he controlled, acquired specialized mobile radio licenses that he subsequently transferred to the Albany and Reno partnerships at grossly inflated prices. Another company, defendant California Financial Services (CFS), originally owned and controlled by Trimpin and thereafter by King, Murray and Tobin, managed the fund raising and operations of the SMR partnerships. CFS disseminated sales materials, prepared under Trimpin’s direction, that contained material misrepresentations and omissions regarding, among other things, the technology to be employed by the SMR partnerships, the use of the proceeds from the sale of the partnership units, control of the licenses and projected returns to investors. According to the complaint, during the period of the offering, from August l994 to August 1996, Larson, Gladle and Parnell, and their respective companies, defendants Commonwealth Communications Group, (CCG) TrendsGroup International, Inc. (TrendsGroup) and One Touch Marketing, Inc., functioned as brokers in selling the securities without first having registered as such as required by applicable securities laws. Moreover, according to the complaint, in marketing the partnership units, CCG, TrendsGroup and their principals, Larson and Gladle, used high pressure, “boiler room„ sales tactics and materially misrepresented the nature of the SMR partnerships’ operations, their projected costs of development and the projected returns in telephone conversations with investors interested in acquiring partnership units, as well as in documents sent to potential and actual investors. According to the complaint, at the time the sales effort ended in August l996, none of the SMR partnerships had become commercially operational, obtained any customers or generated any revenues. The situation remains unchanged as of the date of the filing of the complaint.