SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 16935 / March 16, 2001
SEC HALTS $6 MILLION DOLLAR FRAUDULENT SCHEME BASED IN WEST PALM BEACH, FLORIDA
SECURITIES AND EXCHANGE COMMISSION V. HAWA CORPORATION, HAWA COMMUNICATIONS, INC., HAWA MED, INC., ILONA ALEXIS MANDELBUAM, ROBERT E. DUKE, AND SARA GOMEZ DE FERRO, Case No. 01-8220-CIV-HURLEY (S.D. Fla.)
The Securities and Exchange Commission (SEC) announced that on March 15, 2001, the Honorable Daniel T.K. Hurley of the United States District Court for the Southern District of Florida entered multiple emergency Orders to halt an ongoing, fraudulent sale of unregistered securities issued by Hawa Corporation ("Hawa"), Hawa Communications, Inc. (HawaCom"), and Hawa Med, Inc. ("Hawa Med"). The SEC was provided assistance in its investigation by both the Comissao de Valores Mobiliarios, Brazil's securities commission, and the Comision Nacional de Valores, Venezuela's securities authority.
After reviewing the SEC's Complaint and application to the Court for a temporary restraining order, which the Court granted, it issued several additional orders at the SEC's request. The Court issued orders freezing the Defendants' assets, directing Defendants to perform an accounting, directing Defendants to repatriate any assets transferred offshore, and ordering Defendants to preserve any documents in their possession. Finally, the Court ordered that a receiver be appointed to take possession of Defendants' assets. In its Complaint, the SEC alleged that Hawa, HawaCom, and Hawa Med have raised over $6 million from investors in the United States through a fraudulent stock offering. The other named defendants are Ilona Alexis Mandelbaum and Sara Gomez de Ferro, both of West Palm Beach, Florida, and Robert E. Duke, of Miami, Florida. Ms. Mandelbuam is the Chairwoman and President of Hawa, HawaCom, and HawaMed, and Ms. Gomez de Ferro is one of HawaCom's controlling shareholders. Mr. Duke directed the sales force that fraudulently raised the $6 million.
According to the SEC's Complaint, Hawa, HawaCom, Hawa Med, and the other named defendants claimed that Hawa, HawaCom, and Hawa Med, all affiliates, owned over $160 million in assets comprised mainly of their acquisitions of three "well-established telecommunications and technology firms" located in South America. In addition, HawaCom claimed to have developed a revolutionary data compression technology that achieves a rate of compression unparalleled in the industry. The SEC's complaint alleges that, in reality, Hawa, HawaCom, and Hawa Med either do not own the South American companies, or that such companies are either in bankruptcy or liquidation. The SEC's 20 page complaint also alleges that HawaCom's purported data compression technology does not exist or is grossly exaggerated.
The SEC's complaint also names Rothschild Reserve International, Inc., Sam Sara Investments, and Shava Corporation as Relief Defendants. The SEC alleges that the Relief Defendants, which are controlled by Ms. Mandelbaum and Mr. Duke, received investor funds to which investors are entitled. The Court ordered that the Relief Defendants' assets be frozen pending a hearing on the SEC's motion for preliminary injunction on March 15, 2001.
The Commission seeks a final judgment: permanently enjoining Hawa, HawaCom, Hawa Med, Ilona Alexis Mandelbaum, Robert E. Duke, and Sara Gomez de Ferro from violating Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933 ("Securities Act") and Section 10(b) of the Securities Exchange Act of 1934 ("Exchange Act") and Rule 10b-5 thereunder, the provisions dealing with securities registration and fraud, and Robert E. Duke from violating Section 15(a)(1) of the Exchange Act, the broker-dealer registration provision, in connection with the offer and sale of the securities of Hawa, HawaCom, and Hawa Med; ordering Defendants Hawa, HawaCom, Hawa Med, Ilona Alexis Mandelbaum, Robert E. Duke, Sara Gomez de Ferro, and Relief Defendants Rothschild Reserve International, Inc., Sam Sara Investments, Inc., and Shava Corporation to disgorge their unjust enrichment; assessing civil penalties against them pursuant to Section 20(d) of the Securities Act and Section 21(d) of the Exchange Act.