LITIGATION RELEASE NO. 16942 / March 23, 2001
SECURITIES AND EXCHANGE COMMISSION v. NANCY J. CHEAL, individually and d/b/a RELIEF ENTERPRISE, et al. (United States District Court for the District of Massachusetts, C.A. No. 00 CV 10182-EFH) (January 31, 2000)
Alleged Promoter Of Fraudulent Trading Scheme Criminally Indicted On 5 Counts of Mail Fraud and 2 Counts of Wire Fraud
The Securities and Exchange Commission announced that, on February 28, 2001, Nancy J. Cheal ("Cheal") was indicted in the District of Massachusetts on 7 criminal charges, including 5 counts of mail fraud and 2 counts of wire fraud. On March 2, 2001, Cheal was arrested and was released on a $100,000 secured bond. The criminal charges allege that Cheal executed a false scheme by which she defrauded thousands of people of more than $2.1 million through her operation of a purported international bank debenture trading program. The criminal charges alleged that Cheal represented that she was the president of a business named "Relief Enterprise", which was operated from two of Cheal's trailer homes in Florida. Victims of the scheme were allegedly promised that they would receive a 100% return per week for twelve consecutive weeks.
On January 31, 2000, the Commission filed a Complaint against Cheal (d/b/a Relief Enterprise) and against Richard L. Birmingham ("Birmingham"), a relief defendant, alleging that Cheal violated the general antifraud and securities registration provisions of the federal securities laws (Sections 5(a) and (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. The Commission's allegations arose from the same underlying factual conduct described in the criminal allegations. On February 1, 2000, the United States District Court for the District of Massachusetts granted the Commission's motion for an ex parte order and, among other things, temporarily restrained the fraudulent activities, froze assets of Cheal and Birmingham and froze the proceeds of the offering. On February 15, 2000, after a hearing, the Court entered a Preliminary Injunction and Order for Other Equitable Relief against Cheal (d/b/a Relief Enterprise) and against Birmingham. Among other things, the Order continued the asset freeze.
On April 27, 2000, the United States District Court for the District of Massachusetts granted a motion brought by the United States Attorney's Office to stay the proceedings in the case brought by the Commission.
For further information, please see Litigation Releases No. 16440 (February 17, 2000) and Litigation Release No. 16424 (February 3, 2000).