U.S. SECURITIES & EXCHANGE COMMISSION
LITIGATION RELEASE NO. 17790 / October 17, 2002
COMMISSION OBTAINS DEFAULT JUDGMENTS AGAINST MAX TANNER, DENNIS EVANS, AND MICHAEL BOSTON IN MARKET MANIPULATION SCHEME
SECURITIES AND EXCHANGE COMMISSION V. TANNER, ET AL., 02-CIV-0306 (S.D.N.Y.)
The Securities and Exchange Commission ("Commission") announced that the Honorable William H. Pauley, United States District Judge for the Southern District of New York, entered Default Judgments against Dennis Evans ("Evans") on July 29, 2002, Max C. Tanner ("Tanner") on August 12, 2002, and Michael Boston ("Boston") on October 10 , 2002 in connection with a market manipulation scheme.
The Commission's Complaint alleges that Tanner, Evans, Boston, and others engaged in a scheme to manipulate the stock price of Maid Aide, Inc. ("MDAN"), a publicly traded shell company. To facilitate the scheme, the defendants gained control of MDAN, set up two boiler room operations, and directed unlicensed brokers to sell unregistered stock at artificially inflated prices, using high-pressure sales tactics, in exchange for undisclosed kickbacks. Through this scheme, the defendants defrauded investors out of more than $3.7 million.
The judgments enjoin Tanner, Evans, and Boston from future violations of Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933 ("Securities Act"), Section 10(b) of the Securities Exchange Act of 1934 ("Exchange Act"), and Rule 10b-5 promulgated thereunder. In addition, the Court ordered Tanner to pay $2,145,167.65 in disgorgement, $616,149.47 in prejudgment interest, and a $350,000 civil penalty. Evans must pay $119,396.67 in disgorgement, $37,250.56 in prejudgment interest, and a $126,500 civil penalty. Boston must pay $150,000 in disgorgement, $53,745.49 in prejudgment interest, and a $175,000 civil penalty. Tanner and Evans also are barred from ever serving as an officer or director of a public company.
In November 2001, Tanner and Evans were convicted by a jury in a related criminal case. Tanner was convicted of 37 counts of securities fraud, mail and wire fraud, tax fraud, and money laundering. Evans was convicted of securities fraud.