U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 19011 / December 22, 2004
SEC v. Claude Lefebvre et al., (United States District Court for the Northern District of California, C.A. No. C-02-3704-JSW)
United States v. Claude Lefebvre and Dennis S. Herula, (U.S.D.C., District of Colorado) Criminal Action No. 02-CR-485-RB
Defendant in SEC Fraud Case Convicted of Wire Fraud and Money Laundering
Co-Defendant Pleads Guilty
The Commission announced today that, on December 6, 2004, Claude Lefebvre was found guilty of wire fraud and engaging in illegal monetary transactions for his role in a scheme that misappropriated several million dollars from investors. The criminal charges against Lefebvre arose out of the same fraudulent scheme for which the Commission instituted a securities fraud action against Lefebvre and others in 2002.
The U.S. Attorney's Office for the District of Colorado indicted Lefebvre and Dennis Herula – who the Commission also named in the related securities fraud action filed against Lefebvre in 2002 – in a Second Superseding Indictment dated August 25, 2004. The Indictment alleged that Lefebvre and Herula devised a scheme to defraud investors and obtain money and property from those investors by means of materially false and fraudulent pretenses, representations and promises. The Indictment also alleged that Lefebvre and Herula misappropriated several million dollars of those investor funds. For his role in the scheme, Herula pled guilty and his guilty plea was accepted by U.S. District Court Judge Robert Blackburn on October 26, 2004. Herula is scheduled to be sentenced on February 11, 2005. After a bench trial, Judge Blackburn found Lefebvre guilty on all 15 counts of the Indictment. Lefebvre is scheduled to be sentenced on February 25, 2005.
On July 31, 2002, the Commission filed a civil injunctive action against Lefebvre, Herula and others, alleging that they participated in a fraudulent offering of securities that raised at least $40 million from investors in July 2002. The Commission alleged that Lefebvre falsely promised investors exorbitant returns, such as 100% per week, through a fraudulent prime bank-type trading program. The Commission further alleged that in the span of several weeks after obtaining the $40 million, Lefebvre, Herula and others spent at least $4 million of investor funds on personal and luxury items such as cars, jewelry and large hotel bills. On April 12, 2004, a San Francisco federal court entered a default judgment against Lefebvre, permanently enjoining Lefebvre from future violations of the antifraud provisions of the federal securities laws and ordering him to pay approximately $6 million in disgorgement, prejudgment interest and a civil penalty.
For further information, please see Litigation Release No. 18676 (April 23, 2004) [default judgment entered against Lefebvre and RMO Assets Management SA]; Litigation Release No. 17759 (October 1, 2002) [civil contempt charges against Lefebvre and RMO Assets Management SA for violating the court's August 1, 2002 temporary restraining order]; Litigation Release No. 17729 (September 17, 2002) [Lefebvre arrested and charged in parallel criminal action]; and Litigation Release No. 17652 (August 2, 2002) [temporary restraining order and asset freeze against Lefebvre, Herula and others].