Securities and Exchange Commission
Litigation Release No. 17715 / September 6, 2002
Securities and Exchange Commission v. Harral Dunbar, Jr., Individually and d/b/a Ghost International, Civil Action Number 02-233-B-M1 (M.D. La.)
Order Setting Disgorgement, Prejudgment Interest and Civil Penalty Issued Against Harral Dunbar, Jr. for Securities Fraud Conducted on Internet and Registration Violations
The Securities and Exchange Commission ("Commission") announced today that on August 28, 2002, Judge Frank J. Polozola of the United States District Court for the Middle District of Louisiana issued an order setting disgorgement, prejudgment interest and a civil penalty against Harral Dunbar, Jr., in his individual capacity and d/b/a Ghost International, an Internet website operation. In an earlier order, the Court permanently enjoined Dunbar from antifraud and registration violations of the federal securities laws and found that Dunbar, of Baton Rouge, Louisiana, owned the Ghost International website and used it to solicit investors in investment contracts by promises of inordinate amounts of guaranteed returns and promises of no-risk investing, and further found that investors have received little or no return despite several months of promises by Dunbar that returns would be paid. In its recent order, the Court ordered Dunbar to pay disgorgement in the amount of $9,600, along with prejudgment interest thereon, and ordered Dunbar to pay a "third tier" statutory civil penalty in the amount of $120,000.
The Commission's complaint alleged that between mid-2001 and March 2002, Dunbar obtained funds from investors by touting Ghost International's "private contribution and investment program" which allegedly paid, for example, $100,000 on a $200 investment over a few weeks. Dunbar made various promises of returns, including ones up to 1000 percent. Dunbar made various representations to fraudulently induce investors including that his company dealt in "high yield investments" and that funds were to be placed in offshore bank accounts, which would pay promised returns for five months of a supposed seven-month program. The complaint also alleged that Dunbar lulled investors by making promises that payments would be made shortly. However, when the time elapsed, the promised payments were not forthcoming.
The complaint charged Dunbar with, and the Court, by earlier order, permanently enjoined Dunbar from, 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 Court's August 28, 2002 order directed that Dunbar pay disgorgement, prejudgment interest, and civil penalties into the registry of the Court within thirty days from the entry of the Order.