Jeanette B. Wilcher

On October 22, 2003, the United States Attorney for the District of Arizona announced that a federal grand jury returned an indictment of Jeanette B. Wilcher, a resident of Scottsdale, Arizona, charging her with intentionally defrauding investors out of more than $3 million dollars in connection with a high yield investment scheme and charging her with wire fraud for her role in a "pump and dump" scheme involving the stock of Hitsgalore.com, Inc. The indictment charges Wilcher with eight counts of wire fraud and six counts of money laundering.

Hitsgalore was a publicly-traded Internet company located in Rancho Cucamonga, California, that maintained a website providing an Internet search engine and leasing advertising space to consumers. On November 28, 2001, the Commission filed an action against Wilcher and Life Foundation Trust along with Hitsgalore and its former president, Stephen J. Bradford. The complaint charged Hitsgalore and Bradford with fraud in connection with several press releases issued by the company between April 16 and May 10, 1999 that contained false and misleading statements about a purported investment in Hitsgalore by Life Foundation Trust. The fraudulent press releases caused a dramatic rise in the price of Hitsgalore's stock, quoted on the OTCBB, from $6.3125 to a high of $20.125. The complaint also charged Life Foundation Trust, a Scottsdale, Arizona, for-profit trust, and its trustee Wilcher, with aiding and abetting Hitsgalore's fraud and illegally selling Hitsgalore stock. The Commission settled its claims against Bradford and Hitsgalore.

On July 29, 2002, the Honorable Gary L. Taylor, United States District Judge for the Central District of California, granted summary judgment in favor of the Commission against Life Foundation Trust and Wilcher. Among other relief, the Court held Life Foundation Trust and Wilcher jointly liable for disgorgement of the $1,024,418.50 that Life Foundation Trust made in profits on the illegal sale of Hitsgalore stock; ordered Life Foundation Trust to pay a civil penalty of $1,024,418.50; and ordered Wilcher to pay a civil penalty of $110,000.

The Commission applied for a contempt order after Wilcher and Life Foundation Trust failed to pay the ordered disgorgement. On March 24, 2003, the Court held Life Foundation Trust and Wilcher in civil contempt for their failure to pay disgorgement. The March 24 Order required that Wilcher be incarcerated and forced to surrender her passport for failure to disgorge the illegal profits, and required Life Foundation Trust to pay an escalating daily fine of $1,000, doubling every day thereafter until Life Foundation Trust pays the ordered disgorgement. Wilcher and Life Foundation Trust have not complied with the March 24 Order.

Wilcher remains incarcerated awaiting trial in the criminal proceeding.

For further information, see related Litigation Release Nos. 18052, 18024, 17646, and 17249.