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U.S. Securities and Exchange Commission

U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 17108 / August 27, 2001

SECURITIES AND EXCHANGE COMMISSION v. ALPHA TELCOM, INC., AMERICAN TELECOMMUNICATIONS COMPANY, INC., STRATEGIC PARTNERSHIP ALLIANCE, LLC, SPA MARKETING, LLC, PAUL S. RUBERA, ROBERT A. MCDONALD, ROSS S. RAMBACH and MARK E. KENNISON (D.ORE.) (CV-01-1283 HA)

The United States Securities and Exchange Commission ("Commission") announced that on August 27, 2001, the Honorable Owen M. Panner, United States District Judge for the District of Oregon, issued a temporary restraining order halting an ongoing $100 million securities fraud by Paul S. Rubera ("Rubera"), Robert A. McDonald ("McDonald"), Ross S. Rambach ("Rambach"), Mark E. Kennison ("Kennison") and entities controlled by them. The Court: (1) granted the Commission's application for a temporary restraining order and receiver; (2) froze the assets of the defendants; (3) prohibited the destruction of documents by the defendants; (4) ordered accountings from the defendants; and (5) granted expedited discovery. A hearing on whether a preliminary injunction should be issued against the defendants is scheduled for September 6, 2001.

The Commission's complaint, filed today, alleges that since 1997, Rubera, McDonald, Rambach and Kennison, and entities controlled by them (Alpha Telcom, Inc. ("Alpha"), American Telecommunications Company, Inc. ("ATC"), Strategic Partnership Alliance LLC ("SPA") and SPA Marketing, LLC ("SPA Marketing")) have raised at least $100 million from over 7,000 investors nationwide, purportedly for investments in pay telephones, and promising investors a 14% annual return. In fact, Rubera, McDonald, Rambach and Kennison, and the entities controlled by them, are operating a massive Ponzi-like scheme in which Alpha and ATC's payphone operations are losing money, but the defendants are making payments to existing investors with the money that they obtain from new investors. In addition, the complaint alleges that Rambach, Kennison, SPA and SPA Marketing have been acting as unregistered brokers in connection with the offer and sale of investments in the defendants' scheme.

The Commission obtained an order temporarily restraining the defendants from committing securities fraud in violation of Section 17(a) of the Securities Act of 1933 ("Securities Act"), Section 10(b) of the Securities Exchange Act of 1934 ("Exchange Act") and Rule 10b-5 thereunder. The Court's order also temporarily restrains the defendants from committing violations of the securities registration provisions of Sections 5(a) and 5(c) of the Securities Act. The Court's order further temporarily restrains Rambach, Kennison, SPA and SPA Marketing from committing violations of the broker-dealer registration provisions of Section 15(a) of the Exchange Act. In addition to the interim relief granted today, the Commission seeks a final judgment against the defendants enjoining them from future violations of the foregoing securities registration and antifraud provisions, and against Rambach, Kennison, SPA and SPA Marketing enjoining them from future violations of the foregoing broker-dealer registration provisions, and ordering the defendants to disgorge all ill-gotten gains, and assessing civil penalties against them.

The Commission would like to acknowledge the assistance of the State of Oregon Division of Finance and Corporate Securities in the investigation of this matter.


http://www.sec.gov/litigation/litreleases/lr17108.htm

Modified: 08/28/2001