SECURITIES AND EXCHANGE COMMISSION
LITIGATION RELEASE NO. 16897 / February 14, 2001
UNITED STATES OF AMERICA v. EDWARD J. PARADIS, JR. AND WALTER R. SNYDER, JR. (Criminal No. 4:01-CR-40006-NMG (USDC., D.MA))
TWO ARRESTED IN $600,000 PRIME BANK SCHEME
On February 8, 2001, Edward J. Paradis, Jr., of Sturbridge, Massachusetts, and Walter R. Snyder, Jr., of Southbridge, Massachusetts, were arrested on charges of mail fraud, wire fraud and conspiracy in connection with a prime bank scheme conducted between January 1995 and March 1998 in which they raised more than $600,000 from four individuals. The arrests followed the unsealing of an indictment against Paradis and Snyder that was returned by a federal grand jury in the District Court for the District of Massachusetts on February 1, 2001.
According to the indictment, Paradis and Snyder falsely told the individuals that they could obtain funding for business projects by acquiring letters of credit from international "prime banks." Paradis and Snyder falsely represented that the business funding could be obtained only if the individuals made substantial up-front payments to Snyder and Paradis. According to the indictment, the individuals were told that these payments -- which ranged as high as $200,000 -- were to pay fees charged by the "prime banks" issuing the letters of credit. The individuals were assured that the payments would be maintained in escrow accounts administered by Snyder, who was a licensed attorney in Massachusetts, and refunded if the promised financing did not materialize within seven to thirty days. Contrary to these assurances, the funds were withdrawn from the escrow accounts shortly after being deposited. Paradis and Snyder used the funds for their own benefit and that of their relatives, and to pay for items such as rent, clothing, gas and a hairdressing salon.
In an earlier, related proceeding, the Securities and Exchange Commission filed a civil enforcement action against Paradis and Snyder on April 13, 1998 alleging that they violated the antifraud provisions of the federal securities laws in connection with the scheme described above. On March 11, 1999 and June 22, 1999, the United States District Court for the District of Massachusetts entered final judgments against Snyder and Paradis permanently enjoining them from violating Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities and Exchange Act of 1934 and Rule 10b-5 thereunder, requiring them to disgorge their ill-gotten gains and imposing monetary penalties. In addition, Snyder was disbarred by the Massachusetts Board of Bar Overseers of the Supreme Judicial Court on March 25, 1999.
For further information, please see Litigation Release Numbers 16201 (June 30, 1999), 15732 (May 6, 1998) and 15706 (April 14, 1998).http://www.sec.gov/litigation/litreleases/lr16897.htm