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U.S. Securities and Exchange Commission


Litigation Release No. 16915 / February 28, 2001

SEC v. John E. Brinker, Jr., Gary J. Bentz, Castlerock Consulting, LLC, Guardian First Limited, Inc. (a Nevada corporation), Guardian First Limited, Inc. (a Grenada corporation), Wellington Bank and Trust, Ltd., Wellington Capital Holdings Ltd., Inc., Wellington Capital Holdings, Ltd., Wellington International Investments, Inc., Wellington First International Investments, Inc. and all subsequently numbered Wellington International Investments, Inc. entities, Alpha Advantage II, Inc., Eleven Eighty-Five, LP, and Steadfast Ministries, Inc., Civil Action No. IP01-0259 C-H/G.

The U.S. Securities and Exchange Commission ("Commission") announced today that a federal court in Indianapolis has entered an order permanently enjoining Wellington Bank and Trust, Ltd ("Wellington Bank"), John E. Brinker, Jr. ("Brinker"), Gary J. Bentz ("Bentz"), and entities they control or with which they are associated, from engaging in fraud, unregistered sales of securities, and acting as unregistered brokers, in violation of federal securities laws. The order also freezes the assets of the defendants and relief defendants. Finally, the order appoints an examiner to determine how funds of allegedly defrauded investors were distributed and spent. The Court will determine later the amount of ill-gotten gains, if any, defendants and relief defendants must disgorge and the amount of civil penalties, if any, to be paid by defendants.

In its complaint, the Commission alleges that the defendants operated a "Ponzi" scheme that raised approximately $7.1 million from over 200 investors in eleven states. Most investors are Indiana residents and several are elderly. Specifically, the complaint alleges that from the Cincinnati, Ohio offices of Castlerock Consulting, LLC ("Castlerock"), Brinker and Bentz sold unregistered securities in an investment program offered by Wellington Bank, which is based in the nation of Grenada. According to the complaint, Brinker and Bentz represented to investors that the program would generate annual returns of 50% or more through trading in "prime bank" instruments. Numerous government agencies, including the Commission, the Federal Deposit Insurance Corporation and the Board of Governors of the Federal Reserve System, however, have warned the public that trading programs in prime bank instruments do not exist and are fraudulent. The complaint further alleges that of the $7.1 million they raised, Brinker and Bentz diverted at least $5.4 million to themselves, entities they control, and others with no relation to a legitimate investment purpose.

Besides Brinker, Bentz, Castlerock, and Wellington Bank, the defendants are several U.S., Grenadan, and Bahamian corporate entities that helped facilitate the scheme. The complaint also names as relief defendants three companies associated with Brinker and Bentz, Alpha Advantage II, Inc., Eleven Eighty-Five, LP and Steadfast Ministries, Inc., that received investor money.

The defendants and relief defendants consented to the court's order without admitting or denying the allegations in the complaint. Specifically, the order: (1) permanently enjoins all defendants from engaging in fraud or the sale of unregistered securities in violation 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; (2) and permanently enjoins Castlerock, Wellington Capital Holdings Limited, Inc., Wellington Capital Holdings, Ltd., Brinker, and Bentz from acting as unregistered brokers in violation of Sections 15(a) and 15(c) of the Securities Exchange Act of 1934 and Rule 15c1-2 thereunder. The order was entered on February 27, 2001, by U.S. District Judge David F. Hamilton, in S.E.C. v. John E. Brinker, Jr., et. al., (Case No. IP01 0259 C-H/G).

The Commission acknowledges the assistance of the Indiana Securities Division, the Kentucky Division of Securities, and the Delaware Division of Securities in this matter.