Tee To Green Golf Parks, Inc., Steven Blumhagen, Susan Blumhagen, David Trotter, Hanover Financial Group, Inc., Donald W. Owens and Financial Security Group Insurance Agency, Inc

U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.

Litigation Release No. 16575 / May 31, 2000

SEC SUES SEVEN IN CONNECTION WITH FRAUDULENT $12 MILLION PROMISSORY NOTE OFFERING

Securities and Exchange Commission v. Tee To Green Golf Parks, Inc., Steven Blumhagen, Susan Blumhagen, David Trotter, Hanover Financial Group, Inc., Donald W. Owens and Financial Security Group Insurance Agency, Inc., Civil Action No. 00 CV 0478 (W.D.N.Y.)

The Securities and Exchange Commission ("Commission") announced that, on May 31, 2000, it filed a Complaint in the United States District Court for the Western District of New York against Tee To Green Golf Parks, Inc. ("Tee To Green") and others in connection with a fraudulent scheme arising from the sale of at least $12 million in nine-month promissory notes to investors. The Commission's complaint names the following defendants:

Tee To Green, a Delaware corporation, which operates a golf practice facility located in Buffalo, New York.
Steven Blumhagen, age 49, a resident of North Tonawanda, New York.
Susan Blumhagen, age 49, a resident of North Tonawanda, New York.
David Trotter, age 53, a resident of Windermere, Florida.
Hanover Financial Group, Inc. ("Hanover Financial"), a Florida corporation, based in Windermere, Florida.
Donald W. Owens, age 44, a resident of Hamilton, Ohio.
Financial Security Group Insurance Agency, Inc. ("Financial Security Group"), an Ohio
corporation, based in Hamilton, Ohio.

The complaint alleges as follows: At the direction of Steven Blumhagen, Tee To Green's president, Tee To Green falsely represented to investors that the promissory notes it issued were guaranteed and reinsured through a syndicate of high quality insurance companies. In fact, the notes were not guaranteed or reinsured. Investors were told that proceeds from the note sales would be used in the development of golf practice facilities. In fact, Steven and Susan Blumhagen, a director and 70% shareholder of Tee To Green, diverted at least $3.45 million for their personal expenses and investments. Additionally, Tee To Green used at least $1.8 million to pay commissions to sales agents, although Tee To Green never disclosed that it was paying commissions to facilitate the sales of its notes.

Steven Blumhagen hired David Trotter and his company, Hanover Financial, to organize and manage the offering and sale of the notes. Over 350 investors in at least six states (including Ohio, Oregon, North Carolina, South Carolina, Mississippi and Pennsylvania) purchased Tee To Green notes during 1997. Donald Owens and his company, Financial Security Group, recruited agents in Ohio, the state where the largest volume of notes were sold, and also sold notes directly to investors. Tee To Green paid these sales agents significant undisclosed commissions.

The Commission charged Tee To Green, Steven Blumhagen, David Trotter and Hanover Financial with committing securities fraud in violation of Section 17(a) of the Securities Act of 1933 ("Securities Act"), and Section 10(b) of the Securities Exchange Act of 1934 ("Exchange Act") and Rule 10b-5 thereunder. The Commission charged Susan Blumhagen with committing securities fraud in violation of Section 17(a) of the Securities Act, and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder, or, alternatively, with aiding and abetting violations of Section 10(b) of the Exchange Act and Rule 10b-5 thereunder. The Commission charged Tee To Green, Steven Blumhagen, Donald Owens and Financial Security Group with violations of Sections 5(a) and 5(c) of the Securities Act, and also charged Donald Owens and Financial Security Group with acting as unregistered brokers in violation of Section 15(a) of the Exchange Act. The Commission seeks a permanent injunction, disgorgement, prejudgment interest and civil monetary penalties against Tee To Green, Steven Blumhagen, Susan Blumhagen, David Trotter and Hanover Financial, and also seeks an accounting from Tee To Green, and seeks a permanent injunction and civil monetary penalties against Donald Owens and Financial Security Group.