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U.S. Securities and Exchange Commission


LITIGATION RELEASE NO. 16557 \ May 17, 2000


Case Nos. 7:99-CR-013R and 7:99-CR-014R

SECURITIES AND EXCHANGE COMMISSION v. GARY LANDON DAVENPORT, dba Southwest Family Trust Service, Financial Marketing Service and Liberty Marketing Service, RUSSELL REEVES, dba Enterra Marketing Service, RICHARD EARL RUSSELL and GREGORY MONROE ROBERTS Case No. 7:99-CV-185-R, USDC, NDTX (Wichita Falls Division)

The Commission announced that on May 12, 2000, Judge Jerry Buchmeyer, United States District Judge for the Northern District of Texas, sentenced Gary Landon Davenport and Richard Earl Russell for securities and mail fraud in an investment scheme targeting senior citizens that had been ongoing since 1992. Under a statute which allows for enhanced penalties for targeting the elderly, the Court, on its own motion, upwardly departed from the federal sentencing guidelines and sentenced Davenport, the scheme's ringleader, to the maximum of 15 years on one count of mail fraud and five years on one count of securities fraud. Noting the egregious nature of the offense and its effect on the elderly victims, Judge Buchmeyer announced that Davenport's sentence would be served consecutively for a total of 20 years. The Court, noting Russell's assistance in the criminal and civil investigations, sentenced him to 52 months for his part in the fraud. In addition, the Court ordered the defendants to pay $2,605,938 in restitution to the victims of the fraud.

Previously, on September 9, 1999, Judge Buchmeyer granted the Commission's request for a preliminary injunction in its civil action against Davenport, Russell and their two other co-Defendants. The Commission's Complaint alleged that approximately 100 elderly individuals were defrauded of over $2.5 million in Davenport's scheme. The indictments of the four defendants followed on October 20, 1999. Under the guise of providing estate and financial planning services, the defendants solicited information about the senior citizens' assets and investments. Upon obtaining this information, the defendants encouraged the senior citizens to liquidate their retirement investments and to invest the proceeds in phony promissory notes offering higher rates of return. In fact, according to the Commission's Complaint, the issuers of the notes had no real business or did not exist and the defendants misappropriated, or stole, most of the elderly investors' funds.