SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 16727 / September 27, 2000
SEC v. Terry V. Koontz, et al., Civil Action No. 98cv11904NG (D. Mass., Sept. 17, 1998)
The Securities and Exchange Commission ("Commission") announced today that on September 20, 2000, the U.S. Attorney's Office for the Middle District of Florida (Tampa) filed an information against Terry V. Koontz, charging Koontz with conspiracy, securities fraud, and wire fraud in relation to a scheme in which he orchestrated the sale of $23 million of fraudulent securities, together with Koontz's plea agreement, which waived indictment to the charges and agreed to forfeit various assets purchased with proceeds of the fraud.
The charges arise out of a vast prime bank Ponzi scheme investigated by the Commission. Koontz and others conducted this scheme, in which they induced more than 80 individuals in 16 states to invest over $20 million in a fictitious "international bank debenture trading" program called Private Pool, LLC. On September 17, 1998, the Commission filed an emergency action against Koontz and others in the U.S. District Court for the District of Massachusetts, alleging that Koontz orchestrated this scheme and utilized various sales agents to solicit investments from unwary investors, promising them a return of 1% per week for a forty-week period. Upon filing, the Court granted the Commission's request for a temporary restraining order and an asset freeze against Koontz and others. In October 1998, the Court granted the Commission's request for a preliminary injunction against Koontz and others.
The SEC action further alleged that Koontz falsely represented himself to be affiliated with Barclays Bank and that he traded "international bank debentures." In fact, international bank debentures do not exist, and Koontz was not affiliated with Barclays. The complaint also alleged that Koontz provided others with various fraudulent documents for distribution to investors. Moreover, the complaint alleged that Koontz used the invested funds to pay other investors and sales commissions and that he dissipated at least $9.9 million of investor funds for personal purposes.
Koontz is the fifth defendant to be charged by the Tampa U.S. Attorney as a result of this scheme. Stewart Koral (false statements), Joseph Papasidero (misprision of a felony), Richard J. Fulcher (mail fraud), and Jeffrey A. DeVille (securities and wire fraud) have all previously entered guilty pleas in U.S. District Court in Tampa, Florida. In addition, the District Court in Massachusetts has entered judgments in the Commission's action against defendants Fulcher, Walter Lapp, Lawrence Seppanen, and Thomas Dolan, all of whom acted at sales agents. The Commission's action is continuing as to Koontz and other defendants.
SEC v. Terry V. Koontz, et al., Civil Action No. 98cv11904NG (D. Mass.), Lit. Rel. No. 15892. Contact Person: Linda B. Bridgman, (617) 424-5929.