U.S. Securities & Exchange Commission
SEC Seal
Home | Previous Page
U.S. Securities and Exchange Commission


Litigation Release No. 17362 / February 14, 2002

Securities and Exchange Commission v. Clif Goldstein, formerly known as Clifford Dixon Noe, Paul Howe Noe, also known as Paul Noe Randall, Carolyn M. Kaplan, Noel Alelov, Russell B. Gerstein, Nuell W. Paschal, Great American Trust Company, Inc., and Great American Trust Corporation, Inc. (Civil Action No. 302048517) (D. SC, Columbia Div.) (February 14, 2002).

S.E.C. Charges Two Brothers and Four Others With Running Fraudulent Prime Bank Scheme

The United States Securities and Exchange Commission announced today that it has filed a securities fraud lawsuit against Clif Goldstein, formerly known as "Clifford Noe" and also known as "Dr. Noe," Goldstein's brother Paul Howe Noe, and four other individuals and two entities in connection with an alleged prime bank fraud that has raised at least $1.1 million from more than 20 investors. Goldstein and Noe each have extensive prior criminal records. Goldstein, age 72, has prior criminal convictions, for among other crimes, wire fraud, mail fraud and forgery, while Paul Noe has prior convictions, for, among other crimes, embezzlement, larceny and wire fraud.

According to Commission's complaint filed today in the federal district court for the District of South Carolina, the Commission alleges that the defendants targeted both cash-poor companies unable to obtain funding through conventional means, and individual investors who desired to earn high investment returns quickly. Goldstein and Noe and their "Great American Trust" companies served as the primary offerors of the investment programs that comprised the fraud scheme, while the other defendants served as "finders" or selling agents, locating and luring potential investors to Goldstein and Noe and receiving finders' fees.

The programs, which were promoted via the Internet and an intricate network of so-called consultants or finders, featured the use of so-called prime bank instruments, wholly fictional securities purportedly traded on an equally fictitious secondary market.

The Venture Capital Financing Program

In this program, Goldstein and Noe offered, at a price of $10,000 per each $1,000,000 of financing sought by the investor, so-called prime bank guarantees and standby letters of credit, promising that the purchasers of these instruments could use them as collateral to secure much larger bank loans. After obtaining the bank loans, the alleged victims were required to provide the loan proceeds to Goldstein and Noe, who promised to place the funds in a high-yield investment program or "HYIP." Goldstein and Noe promised that the HYIP would, through private financing transactions with unknown foreign persons or entities, not only generate returns sufficient to pay back the original bank loan, but also generate millions of dollars in additional returns. The Commission's Complaint alleges that the Venture Capital Financing Program was simply a sham, through which Goldstein and Noe would appropriate investor funds for their own personal use.

The 100% Return High-Yield Program

The Complaint further alleges that Goldstein and Noe also offered to place investor funds into a series of complex (and wholly fabricated) trading programs that involved obtaining letters of credit, selling those letters of credit at a discount, and then using the proceeds from these sales to fund a high-yield trading program that promised astronomical returns of up to 100% per week. The Complaint alleges that this program was also a total sham that only profited Goldstein, Noe and the other defendants.

Concurrently with the SEC action, the Office of the United States Attorney for the District of South Carolina has filed criminal charges against Goldstein and Noe for their roles in the investment scheme, and the Federal Bureau of Investigation has arrested those individuals.

In its Complaint, the Commission alleges that the defendants violated the antifraud provisions of the federal securities laws, Section 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 seeks permanent injunctions against future violations of the anti-fraud provisions, disgorgement of defendants' ill-gotten gains plus prejudgment interest, and civil penalties.

The Commission acknowledges the assistance of the South Carolina offices of the Federal Bureau of Investigation and the United States Attorney.

For more information about prime bank frauds, visit the SEC's "Prime Bank Information Center" at http://www.sec.gov/divisions/enforce/primebank.shtml. To report suspicious activity involving possible Internet fraud, visit http://www.sec.gov/complaint.shtml.

*  SEC Complaint in this matter.


Modified: 02/14/2002