SECURITIES AND EXCHANGE COMMISSION
Litigation Release No.17188 / October 15, 2001
SEC v. Jamie P. Piromalli, et al., Civil Action No. C2-00 622, (S.D. OH)
On June 13, 2001, the Honorable Terence P. Kemp, Magistrate Judge of the U.S. District Court for the Southern District of Ohio, entered Final Judgments against defendants Steven Brewer, A. Michael Jaillett and Richard Mann, by default, for their participation in a nationwide Ponzi scheme, involving the offer and sale of unregistered nine-month promissory notes issued by World Vision Entertainment, Inc. ("World Vision"), a company located in Altamonte Springs, Florida.
The Commission's Complaint, filed on June 1, 2000, alleged that from June 1996 to August 1999, Jamie P. Piromalli, Brewer, Jaillett, Mann and Seth Miller (collectively, "the Defendants"), through World Vision, raised at least $64 million from approximately 1,200 investors in 33 states from the sale of promissory notes. The Defendants offered and sold securities in the form of nine-month promissory notes without registering them with the Commission. In furtherance of the scheme, the Defendants, directly and indirectly, through a nationwide sales network, made numerous false and misleading statements to investors about the World Vision notes. For example, the Defendants misrepresented that the notes were unconditionally guaranteed and insured and that all of the proceeds of the offering would be used to develop World Vision's products. In reality, the notes were not guaranteed and the Defendants used the proceeds of the note offering to pay for the personal and business expenses of company officers and directors, to cover interest and principal payments to investors and to pay large, undisclosed commissions to the sales network.
Brewer, Jaillett and Mann were permanently enjoined from future violations of Sections 5(a), 5(c) and 17(a) of the Securities Act of 1933, Section 10(b) of the Exchange Act of 1934 ("Exchange Act") and Rule 10b-5 thereunder. The Commission seeks disgorgement of their ill-gotten gains, including prejudgment interest, in the amount of $689,560 from Brewer, $332,148 from Jaillett and $2,012,988 from Mann. In addition, the Commission seeks civil penalties of $110,000 each against Brewer, Jaillett and Mann.
For additional information, see Litigation Release No. 16577 (June 1, 2000).