U.S. Securities and Exchange Commission
Litigation Release No. 17926 / January 13, 2003
SEC v. Waage, Case No. C-01-3386 WHA (N.D. Cal.).
Richard Alyn Waage and Haarlem Universal Corporation Enjoined in "Tri-West Investment Club" Prime Bank Scheme
On December 19, 2002, federal judge William H. Alsup, sitting in San Francisco, issued a judgment against Richard Alyn Waage and Haarlem Universal Corporation for violating the federal securities laws in an investment scam known as the "Tri-West Investment Club." Waage, a Canadian citizen, was recently extradited from Costa Rico to the United States to face related criminal charges in federal court in Sacramento.
In the civil action brought by the Commission, the court enjoined Waage from future violations of the antifraud and registration provisions of the securities laws, and ordered him to disgorge $58 million in proceeds, plus interest, and pay a civil penalty of $120,000. Haarlem, a corporation based in Panama, was named in the action as a relief defendant and was also ordered to disgorge $58 million.
The Commission's complaint alleged that during 1999 and 2000, Waage used the Internet to solicit investors for the Tri-West Investment Club. The club was promoted as an investment program to trade in fictitious "prime bank" securities. Investors were encouraged to make checks payable to Haarlem and send the checks to various locations in California, Belize, and Costa Rica. The Commission alleged that the program was a fiction, designed only to enrich Waage. Neither Waage nor Haarlem responded to the complaint in the action. The court granted judgment upon default against each defendant.
The Court requested and received assistance from the governments of Costa Rica, Panama and Mexico. The Commission thanks the governments of Canada and Latvia and the Federal Bureau of Investigation and United States Attorney for their assistance in the matter.
The Commission's action against Waage alleged violations of Sections 5(a) and (c) and Section 17(a) of the Securities Act of 1933, and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5.