UNITED STATES SECURITIES AND EXCHANGE COMMISSION
LITIGATION RELEASE NO. 16605 / June 22, 2000
SECURITIES AND EXCHANGE COMMISSION v. NATIONAL INSTITUTE COMPANIES OF AMERICA, INC., et al. (United States District Court, W.D. Pa., Civil Action No. 00CV1216) (RJC)
The Securities and Exchange Commission ("Commission") announced that today it filed a complaint in the United States District Court for the Western District of Pennsylvania against National Institute Companies of America, Inc. ("NICA"), Raymond P. Sobieralski ("Sobieralski"), John A. D'Onofrio ("D'Onofrio"), Robert C. Walters ("Walters"), Dennis J. Oslosky ("Oslosky") and Jason J. Riley ("Riley"). NICA is located in Washington, PA, and was previously named Mortgage Bankers Holding Corp. ("Mortgage Bankers"). The individual defendants reside in Western Pennsylvania.
Sobieralski was Mortgage Bankers' Chief Executive Officer, and its majority shareholder. D'Onofrio is an attorney and was an officer and director of Mortgage Bankers, as well as president of Mortgage Bankers' subsidiary, Commonwealth Capital Investment Corp. ("Commonwealth Capital"). The Commission's complaint alleges that Mortgage Bankers, a mortgage broker, through Sobieralski and D'Onofrio, devised a fraudulent scheme to raise money, ostensibly to provide working capital for Mortgage Bankers, by selling investors unregistered shares of Mortgage Bankers common and preferred stock, as well as unregistered subordinated notes of Commonwealth Capital. In addition to soliciting and selling these investments, Sobieralski and D'Onofrio enlisted Walters, Oslosky and Riley to solicit investors, many of whom are elderly and retired.
The complaint alleges that, from August 1996 through August 1998, defendants fraudulently raised more than $2.3 million from approximately 250 investors in Western Pennsylvania and elsewhere. As part of the scheme, defendants made material misrepresentations and omissions to investors concerning, among other things, the risk of the investment, the poor financial condition of the issuers, and the use of proceeds. The individual defendants misappropriated approximately $650,000 of the funds raised for their personal use, and the remainder was used for salaries, operating expenses, payments to other investors, and to keep Mortgage Bankers afloat. The complaint further alleges that Sobieralski, D'Onofrio, Walters and Oslosky were acting as unregistered broker-dealers during the offerings.
The complaint seeks to permanently enjoin the defendants from future violations of Sections 5(a), 5(c) and 17(a) of the Securities Act of 1933, and Section 10(b) of the Securities Exchange Act of 1934 ("Exchange Act") and Rule 10b-5 thereunder, and to permanently enjoin Sobieralski, D'Onofrio, Walters and Oslosky from future violations of Section 15(a) of the Exchange Act. The complaint also seeks disgorgement, together with prejudgment interest, and civil penalties against each of the defendants, and an officer and director bar against Sobieralski and D'Onofrio.http://www.sec.gov/litigation/litreleases/lr16605.htm