U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 18537 / January 9, 2004

Securities and Exchange Commission v. FoneCash, Inc., and Daniel E. Charboneau Civil Action No. 1:02CV00651RJL (D.D.C.)

On January 6, 2004, the Honorable Rosemary M. Collyer, U. S. District Judge for the District of Columbia, entered a Default Judgment against defendant FoneCash, Inc. (FoneCash), restraining and enjoining FoneCash from further violations of Section 17(a) of the Securities Act of 1933, Sections 10(b) and 13(a) of the Securities Exchange Act of 1934 and Rules 10b-5, 12b-20, 13a-1 and 13a-13 thereunder. The Court also ordered disgorgement and prejudgment interest against FoneCash in the respective amounts of $49,150 and $12,677, and imposed a civil penalty against FoneCash of $49,150.

The Commission's complaint, filed on April 8, 2002, alleged that a registration statement and amendments, filed with the Commission by FoneCash in December 2001, January 2002 and March 2002, and signed by Daniel E. Charboneau (Charboneau), the president of FoneCash, contained material misrepresentations and omissions. Such misrepresentations included, among other things, the claim that FoneCash manufactured credit card terminals under a specified patent to which it obtained the exclusive rights in 1997, when in fact, the patent had lapsed in 1993. The complaint further alleged that Fonecash maintained a website which grossly misrepresented the company's business and, through Charboneau, had distributed via the internet several misleading press releases which falsely described various mergers and acquisitions.

For tips on how to avoid Internet "pump-and-dump" stock manipulation schemes, visit http://www.sec.gov/investor/online/pump.htm. For more information about Internet fraud, visit http://www.sec.gov/divisions/enforce/internetenforce.htm. To report suspicious activity involving possible Internet fraud, visit http://www.sec.gov/complaint.shtml.

See also: L.R. 17464 (April 10, 2002)