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United States Securities and Exchange Commission

Litigation Release No. 17468 / April 11, 2002

United States of America v. Edward J. Paradis, Jr. and Walter R. Snyder, Jr. (Criminal No. 01-CR-40006-NMG (USDC., D.MA))

Court Sentences Two Massachusetts Men in $600,000 Prime Bank Scheme

The Commission announced that, on April 4, 2002, judgments of criminal conviction were entered against Edward J. Paradis, Jr., of Sturbridge, Massachusetts, and Walter R. Snyder, Jr., of Southbridge, Massachusetts, by the federal district court for the District of Massachusetts in connection with a criminal matter brought against them by the U.S. Attorney for the District of Massachusetts as a result of their participation in a fraudulent "prime bank" offering scheme between January 1995 and March 1998. Judge Nathaniel M. Gorton sentenced Paradis, based on his guilty plea to one count of conspiracy to defraud, to 24 months' imprisonment, to be followed by two years of supervised release. Judge Gorton sentenced Snyder, based on his guilty plea to one count of conspiracy to defraud, to 14 months' imprisonment, to be followed by two years of supervised release. In addition, Judge Gorton ordered Paradis and Snyder to make restitution to victims in a total amount of $277,769.

According to the indictment filed in this matter, Paradis and Snyder raised more than $600,000 from four individuals between January 1995 and March 1998 by falsely claiming that they could obtain funding for business projects by acquiring letters of credit from international "prime banks." Paradis and Snyder falsely represented that the business funding could be obtained only if the individuals made substantial up-front payments to Snyder and Paradis. According to the indictment, the individuals were told that these payments — which ranged as high as $200,000 — were to pay fees charged by the "prime banks" issuing the letters of credit. The individuals were assured that the payments would be maintained in escrow accounts administered by Snyder, who was a licensed attorney in Massachusetts, and refunded if the promised financing did not materialize within seven to thirty days. Contrary to these assurances, the funds were withdrawn from the escrow accounts shortly after being deposited. Paradis and Snyder used the funds for their own benefit and that of their relatives, and to pay for items such as rent, clothing, gas and a hairdressing salon.

In an earlier, related proceeding, the Securities and Exchange Commission filed a civil enforcement action against Paradis and Snyder on April 13, 1998 alleging that they violated the antifraud provisions of the federal securities laws in connection with the scheme described above. On March 11, 1999 and June 22, 1999, the United States District Court for the District of Massachusetts entered final judgments against Snyder and Paradis permanently enjoining them from violating Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities and Exchange Act of 1934 and Rule 10b-5 thereunder, requiring them to disgorge their ill-gotten gains and imposing monetary penalties. In addition, Snyder was disbarred by the Massachusetts Board of Bar Overseers of the Supreme Judicial Court on March 25, 1999.

For further information, please see Litigation Release Numbers 16897 (February 14, 2001), 16201 (June 30, 1999), 15732 (May 6, 1998) and 15706 (April 14, 1998).

 

http://www.sec.gov/litigation/litreleases/complr17468.htm


Modified: 04/11/2002