SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 17472 / April 16, 2002
SEC ALLEGES FRAUD AGAINST WEST PALM BEACH INTERNET CASINO IN CONNECTION WITH UNREGISTERED SECURITIES OFFERING
SECURITIES AND EXCHANGE COMMISSION v. THE GAMING FACTORY, INC., A PANAMANIAN CORPORATION, THE GAMING FACTORY, INC., A FLORIDA CORPORATION, RICHARD ONORATO AND VICTOR SELENOW, Case No. 02-80331-CIV-MIDDLEBROOKS (S.D. Fla., filed April 15, 2002).
The Securities and Exchange Commission ("SEC" or the "Commission") announced that on April 15, 2002 it filed an emergency federal civil action against The Gaming Factory, Inc., a Panamanian corporation, The Gaming Factory, Inc., a Florida corporation (collectively, "TGF"), Richard Onorato, TGF's president and Victor L. Selenow, a TGF sales representative in connection with an alleged fraudulent unregistered offering. TGF operates an Internet website that offers casino gaming and sports wagering. On April 15, 2002, the Honorable Donald M. Middlebrooks, United States District Judge for the Southern District of Florida entered, among other things, a temporary restraining order and an asset freeze to halt the alleged on-going fraudulent unregistered offering of securities by TGF, Onorato and Selenow. The Court also entered an order appointing a Receiver over TGF.
According to the SEC's complaint ("complaint"), TGF, Onorato and Selenow have been offering and selling securities from its offices located in West Palm Beach, Florida. Moreover, the complaint alleges that, unbeknownst to investors, TGF and Onorato paid its sales representatives commissions ranging from 13% to 18% of the money raised. The SEC further alleges that TGF, Onorato and Selenow, among other things, misled the public about TGF's licenses with the Panamanian government, the safety and security of the investment and TGF's current profitability.
As a result, the Commission charges TGF, Onorato and Selenow with violations of Sections 5(a), 5(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 SEC is also seeking in its lawsuit preliminary and permanent injunctions, disgorgement of ill-gotten profits and a civil money penalty against Onorato and Selenow.