United States Securities and Exchange Commission
Litigation Release No. 18217 / July 7, 2003
Securities and Exchange Commission v. Benjamin Franklin Cook et al. #3-99CV05701-R, USDC, NDTX (Dallas Division)
The Securities and Exchange Commission announced that on June 27, 2003, Judge Greg Martin of the Maricopa County Superior Court in Phoenix, Arizona sentenced Benjamin Franklin Cook III, 55, to 17 ½ years in prison for his role in master-minding Dennel Finance Limited, a nationwide securities fraud that targeted elderly citizens and religious groups. Cook pled guilty to three counts of theft, after being indicted on 37 counts of fraud, theft and racketeering.
Cook's criminal conviction is based on the same conduct as a civil action against Cook and others brought by the Commission. Securities and Exchange Commission v. Benjamin Franklin Cook et al. #3-99CV05701-R, USDC, NDTX (Dallas Division) In its Complaint, filed March 16, 1999, the Commission alleged that Cook, doing business as Dennel Finance Limited, developed and operated a fraudulent Ponzi scheme involving the offer and sale of nonexistent "prime bank" securities. The fraudulent scheme raised more than $45 million from approximately 300 investors throughout the United States, resulting in losses to investors in excess of $25 million. In December 2000, District Judge Jerry Buchmeyer entered a final judgment against Cook in the Commission's action, enjoining him from further violations of the federal securities laws, ordering him to pay disgorgement of $36,724,494 plus prejudgment interest of $5,616,807, and imposing a civil penalty of $110,000 on him.
In October 1999, Cook was arrested by federal marshals in a Las Vegas, Nevada casino, after Judge Buchmeyer issued a warrant based on his finding that Cook was in contempt of the Court. Cook remained incarcerated for contempt at Seagoville Federal Detention Center in Seagoville, Texas, for more than one year before he was extradited to Arizona to face the state criminal charges.
The Commission has worked closely with several other government agencies in this matter, including the Arizona Attorney General's Office, the Arizona Corporations Commission, the Arizona Department of Public Safety, the United States Customs Department and the Office of the United States Attorney. Through the combined efforts of these agencies, the Receiver appointed in the Commission's action has already distributed $13 million to defrauded investors. The process of collecting assets and distributing funds to investors is on-going.