U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 18680 / April 26, 2004
UNITED STATES v. LARRY W. TYLER, (U.S.D.C., Northern District of Texas, Dallas Division, Criminal Action No. 3-04-CR-145-H)
SECURITIES AND EXCHANGE COMMISSION v. LARRY W. TYLER, ADVANCED FINANCIAL SERVICES, INC., ET AL. , (U.S.D.C., Northern District of Texas, Dallas Division, Civil Action No. 3:02-CV-0282-P)
The Commission announced that on April 21, 2004, a federal grand jury in Dallas, Texas returned a two-count indictment against Larry W. Tyler charging him with securities fraud and wire fraud. The indictment charges Tyler with deceiving his clients in connection with the offer and sale of securities. It is anticipated that Tyler, a former stockbroker, will surrender to federal authorities in Dallas within the next week.
Previously, the Commission filed a civil suit against Tyler on February 11, 2002. In its complaint, the Commission alleged that Tyler raised at least $30 million from investors, and personally realized over $5.2 million in undisclosed commissions, by fraudulently enticing more than 480 mostly elderly investors into purchasing investments issued by his company, Advanced Financial Services, Inc. According to the complaint, Tyler deceived the elderly investors with false guarantees about the investment's liquidity, above-market interest rates and "fixed" maturity dates. Tyler used investors' funds to buy viaticals, which rendered the guarantees false because viaticals are illiquid investments with no fixed maturity dates and uncertain rates of return. Tyler hid the fact that the underlying viaticals could not fulfill the promises that he had made to investors and that the investors had to rely on him and his company to carry through on the promises of guaranteed returns, fixed maturities and liquidity. Two weeks before the Commission filed its suit, Tyler and his company both filed for bankruptcy.
On February 21, 2002, Judge Jorge Solis of the United States District Court for the Northern District of Texas granted the Commission's application for a preliminary injunction and the appointment of a receiver against Tyler and his company, Advanced Financial Services, Inc. The Commission's case against Tyler is pending and litigation is ongoing.