U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 18966 / November 12, 2004
SECURITIES AND EXCHANGE COMMISSION V. AQUA VIE BEVERAGE CORP., THOMAS J. GILLESPIE, AND JOSEPH J. WOZNIAK, , 18966 / November 12
MAJOR SHAREHOLDER OF AQUA VIE BEVERAGE CORP. SETTLES UNREGISTRERED OFFERING CHARGES
The Commission announced today that Defendant Joseph J. Wozniak, a major shareholder of Aqua Vie Beverage Corp., agreed to the entry of a final judgment on consent (the "Judgment"), in Securities and Exchange Commission v. Aqua Vie Beverage Corp., Thomas J. Gillespie, and Joseph J. Wozniak, CV-04-414-S-EJL (D. Idaho). The Court entered the Judgment as to Defendant Joseph J. Wozniak on October 25, 2004.
The Commission filed its civil injunctive action against Wozniak, Aqua Vie, and Aqua Vie's CEO, Thomas Gillespie, on February 23, 2004, following the Commission's 10-day suspension of trading in Aqua Vie common stock on May 2, 2003. The Commission's complaint alleges that Aqua Vie and Gillespie fraudulently promoted Aqua Vie's common stock by means of millions of false and misleading tout sheets faxed to homes and businesses. In addition, from November 2002 through May 2003, Wozniak offered millions of shares of Aqua Vie common stock publicly, without any registration statement in effect as to the offering, in violation of Section 5 of the Securities Act of 1933.
The unregistered public offering by Wozniak, done at the request of Aqua Vie and Gillespie, paid for a massive distribution of promotional faxes touting Aqua Vie stock and also provided cash to Aqua Vie. The purpose of the fax campaign was to create and strengthen the market for Aqua Vie stock. Wozniak provided the 2.75 million shares used to pay the fax disseminator, Fax.com, Inc. In addition, Wozniak sold 3.2 million shares in his own account and transferred $1.2 million of those proceeds to Aqua Vie. This two-pronged unregistered offer and sale effectively kept afloat a struggling company that was far more successful at marketing its stock that its only product, bottled water.
The Judgment entered by the Court on October 25, 2004 barred Wozniak from participating in an offering of penny stock for a period of two years and ordered him to pay a civil penalty of $35,000. In addition, the Court permanently enjoined Wozniak from violating Section 5 of the Securities Act of 1933. The Court also ordered Wozniak, in lieu of disgorgement, to turn over (a) $35,000 shares of Aqua Vie common stock to Aqua Vie's transfer agent and (b) 514.63 shares of Aqua Vie Series J Preferred Stock convertible into 5,146,300 shares of common to Aqua Vie with a direction that they be cancelled. These shares are approximately equal to the amount of shares Wozniak received from Aqua Vie as replacements for the shares he sold and transferred on its behalf.
The Commission continues to litigate its case against the remaining defendants, Aqua Vie and Gillespie.