Securities and Exchange Commission
Litigation Release No. 17805 / October 24, 2002
Final Judgments of Permanent Injunction Entered Against
Defendants Accused of Fraudulent Payday Advance Scheme
Securities and Exchange Commission v. Starcash, et al., Case No. 02-80456-Civ-Middlebrooks/Vitunac (S.D. Florida, filed May 16, 2002)
The Securities and Exchange Commission ("Commission") announced that on September 23, 2002, the United States District Court for the Southern District of Florida entered final judgments of permanent injunction against Jean B. Leclercq ("Leclercq"), Kip Marsique ("Marsique"), and Frederick J. Shapiro ("Shapiro") for fraud and for selling unregistered securities. This follows the Court's permanent injunction of August 8, 2002 entered against Starcash, Inc ("Starcash") and Infinity Consulting Services, Inc. ("Infinity"), both Florida corporations. Leclercq, Shapiro, Marsique, Starcash, and Infinity, without admitting or denying the SEC's allegations, consented to the Court Order that permanently enjoins them from violating Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933 and Sections 10(b) and 15(a) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder.
In its Complaint filed on May 16, 2002, the SEC alleged that Starcash, based in Boca Raton, and Ft. Lauderdale, Florida, conducted a fraudulent unregistered offering to raise investor funds for the purported purpose of funding payday advances in the form of short-term loans. The SEC alleged that between October 2001 and May 2002, the Starcash defendants raised more than $6 million from investors nationwide through a network of boiler rooms to allegedly fund short-term payday loans. According to the SEC's complaint, the Starcash defendants falsely represented that investor funds would be used to fund advance payday loans, and that the investments were virtually risk free and were secured by the purported loans. In fact, Starcash paid exorbitant commissions to the boiler rooms from investor monies, and the loans were unsafe and grossly undersecured. In addition, the Complaint alleged that Starcash made baseless predictions to investors that its payday advance business could generate up to $80 million in revenue a year.
On May 17, 2002, the Court entered, among other things, a temporary restraining order and an asset freeze against all defendants and relief defendants. On May 28, 2002, the Court entered an Order Granting Motion for Preliminary Injunction of Asset Freeze as to the relief defendants. On May 28, 2002, the Court entered a Preliminary Injunction and other relief against all defendants by consent, without admitting or denying the charges.