Litigation Release No. 17600 / July 8, 2002

Securities and Exchange Commission v. FoneCash, Inc., and Daniel E. Charboneau, Civil Action No. 1:02CV00651RJL (D.D.C. April 8, 2002)

The Securities and Exchange Commission ("Commission") announced that on June 26, 2002, the Honorable Richard J. Leon, United States District Judge for the District of Columbia, entered an order of preliminary injunction and other relief as to defendants FoneCash, Inc. ("FoneCash") and Daniel E. Charboneau ("Charboneau"). The order restrained and enjoined FoneCash and Charboneau from violating Section 17(a) of the Securities Act of 1933, Sections 10(b) and 13(a) of the Securities Exchange Act of 1934 ("Exchange Act") and Rules 10b-5, 12b-20, 13a-1 and 13a-13 thereunder. The order further restrained and enjoined Charboneau from violating or aiding and abetting violations of Sections 16(a) of the Exchange Act and Rules 16a-2 and 16a-3 thereunder.

FoneCash and Charboneau consented to the entry of this order without admitting or denying the allegations set forth in the Commission's complaint, filed on April 8, 2002. The complaint alleged that a registration statement and amendments, filed with the Commission by FoneCash in December 2001, January 2002 and March 2002, and signed by Charboneau, contained material misrepresentations and omissions. Such misrepresentations included, among other things, the claim that FoneCash manufactured credit card terminals under a specified patent to which it obtained the exclusive rights in 1997, when in fact, the patent had lapsed in 1993. The complaint further alleged that Fonecash maintained a website which grossly misrepresented the company's business and, through Charboneau, had distributed via the internet several misleading press releases which falsely described various mergers and acquisitions.

For tips on how to avoid Internet "pump-and-dump" stock manipulation schemes, visit http://www.sec.gov/investor/online/pump.htm. For more information about Internet fraud, visit http://www.sec.gov/divisions/enforce/internetenforce.htm. To report suspicious activity involving possible Internet fraud, visit http://www.sec.gov/complaint.shtml.

See also: L.R. 17464 (April 10, 2002)