U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 18557 / January 29, 2004
SECURITIES AND EXCHANGE COMMISSION V. W.L. WARE ENTERPRISES, INC., ET AL. AND WARREN L. WARE, Case No. 6:04 CV-112 ORL-18-JGG (M.D. Fla., filed January 27, 2004)
SEC SUES ORLANDO-BASED W. L . WARE ENTERPRISES AND INVESTMENTS, INC. AND WARREN L. WARE FOR $16.5 MILLION AFFINITY FRAUD AIMED AT AFRICAN AMERICANS AND CHRISTIANS
The Securities and Exchange Commission (SEC) announced that on January 27, 2004, it filed an emergency action to halt an affinity fraud conducted by Orlando-based W.L. Ware Enterprises and Investments, Inc. ("Ware Enterprises") and its principal, Warren L. Ware ("Ware"), that has raised at least $16.5 million. According to the SEC's Complaint, the affinity fraud targeted African Americans and Christians, and has been ongoing since at least 2000. Also on January 27, 2004, Judge G. Kendall Sharp, U.S. District Judge for the Middle District of Florida, issued various emergency orders against the defendants, including temporary restraining orders, asset freezes, and other emergency relief.
The SEC's Complaint alleges that Ware Enterprises and Ware falsely guarantee investors 10% monthly interest payments on their investments for the first ten months followed by a 5% perpetual monthly return. According to the SEC's Complaint, Ware entices potential investors portraying the Company as a "private clientele group investment firm" whose Dreamkeeper Program is "engineered for the not so wealthy to have a chance to make the same type of percentages on their money that the wealthy have been enjoying for centuries." The defendants also falsely represent that Ware Enterprises has over $100 million in assets, when, according to the SEC's Complaint, its bank account records actually reflect balance of only $2 million.
The SEC's complaint also alleges that, although Ware Enterprises and Ware claim to generate returns for investors by making investments in, among other things, commercial and residential real estate, small businesses, and the "markets of the world," in reality, the defendants conducted a typical Ponzi scheme by using new investors' investments to make interest payments to existing investors.
The SEC's complaint charges Ware Enterprises and Ware with violating Sections 5(a), 5(c) and 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and Ware with violating Sections 206(1) and 206(2) of the Investment Advisers Act of 1940. Those sections and rules prohibit certain transactions in securities not registered with the Commission, prohibit fraud in the offer and sale, and in connection with the purchase and sale, of securities, and prohibit investment advisers from defrauding clients.
Investors are advised to read the SEC's "Affinity Fraud" Investor Alert, which provides tips on how to avoid being a victim in an affinity fraud. This and other investor alerts can be found on the SEC's web site, at www.sec.gov.