SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 16905 / February 22, 2001
U.S. ATTORNEY INDICTS FOUR PEOPLE IN CONNECTION WITH FRAUDULENT FOREIGN CURRENCY INVESTMENT SCHEME HALTED BY SEC.
United States v. Kenneth T. Tripoli, et al., Civil Action No.01-00010-CR-JORDAN
The Securities and Exchange Commission ("SEC") announced that on January 11, 2001, the United States Attorney's Office ("USAO") unsealed an indictment charging four individuals with, among other things, having engaged in mail and wire fraud and money laundering in connection with a fraudulent foreign currency investment scheme. The SEC had previously halted the foreign currency trading scheme, International Capital Management, Inc. ("ICM"), by obtaining emergency civil relief on September 30, 1998. The USAO announced the indictment during a press conference held at the SEC's Southeast Regional Office in Miami to publicize the launch of a new Securities Fraud Initiative designed to enhance criminal enforcement against violators of the federal securities laws.
The indictment charges Kenneth T. Tripoli ("K. Tripoli"), his brother, Lawrence T. Tripoli, K. Tripoli's brother-in-law, Nelson N. Schembari, and Jared L. D'Argenio with having fraudulently offered and sold securities in ICM's foreign exchange market investment program between July 1997 and September 1998. The indictment further charges the defendants with, among other things, having prepared false and misleading offering materials for use in soliciting investors. Among other things, the fraudulent offering materials falsely described how ICM would use investor funds, lied about the profits ICM had generated for its investors, and untruthfully claimed that ICM administered investor funds in segregated accounts. In addition, the defendants omitted to disclose, among other things, that in 1997 the SEC had barred K. Tripoli from association with any broker, dealer, municipal securities dealer, investment adviser or investment company.
On September 30, 1998, the SEC filed a complaint for emergency relief, alleging that ICM violated the securities registration provisions of the federal securities laws and raised investor funds by means of false and misleading statements. Without admitting or denying the SEC's allegations, ICM consented to the entry of a permanent injunction against 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 and Rule 10b-5 thereunder. ICM also consented to an asset freeze and the appointment of a receiver over its operations.
For additional information, see SEC Release No. 15922 (October 2, 1998).