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U.S. Securities and Exchange Commission

Litigation Release No. 18208 / July 2, 2003

Securities and Exchange Commission v. K.C. Smith, Civil Action No. 2:03-CV-173 (E.D. Tenn.) (May 12, 2003)

United States v. K. C. Smith, (E.D. Tenn.)(June 30, 2003)

Spammer Sued by SEC Pleads Guilty to Criminal Securities Fraud

The Securities and Exchange Commission announced today that on June 30, 2003 K. C. Smith pled guilty to two felony informations charging securities fraud, each charge carrying a maximum penalty of twenty years imprisonment and fines of up to $5 million. In factual summaries submitted to the court, Smith admitted to conducting two fraudulent investment schemes through websites and spam email during 2002. Smith is scheduled to be sentenced on October 6, 2003.

On May 12, 2003, the SEC charged Smith with fraudulently raising $102,554 by falsely guaranteeing double-digit monthly returns on two websites and in approximately nine million spam e-mail messages. Without admitting or denying the allegations made by the Commission, Smith consented to an order requiring him to pay $107,510 in disgorgement and pre-judgment interest and enjoining him from violating Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder.

The criminal case was prosecuted by the U.S. Attorney's offices for the Eastern District of Tennessee and the Eastern District of Virginia. Additional information can be found in Litigation Release No. 18130.

 

http://www.sec.gov/litigation/litreleases/lr18208.htm


Modified: 07/02/2003