U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 19267 / June 14, 2005
SEC v. Tri-West Investment Club, Alyn Richard Waage, and Haarlem Universal Corporation, Case No. C-01-3386 WHA (N.D. Cal.)
ALYN RICHARD WAAGE AND THREE ASSOCIATES SENTENCED TO A COMBINED 24 ½ YEARS IN PRISON FOR THEIR ROLES IN THE $60 MILLION "TRI-WEST INVESTMENT CLUB" PRIME BANK SCHEME
On March 11, 2005, federal judge Edward J. Garcia, sitting in Sacramento, California, sentenced Alyn Richard Waage ("Waage") to 120 months in prison for his role as the mastermind of the Tri West Investment Club, an Internet-based investment fraud scheme that netted almost $60 million, according to Department of Justice press releases. In a civil action brought by the Securities and Exchange Commission ("Commission") in federal court in San Francisco, the court had already enjoined Waage on December 19, 2002 from future violations of the antifraud and registration provisions of the securities laws, and ordered him to disgorge $58 million in proceeds, plus interest, and to pay a civil penalty of $120,000. Haarlem Universal Corporation, a corporation based in Panama that Waage used to perpetrate the Tri-West scheme, was named as a relief defendant in the Commission's civil action and was also ordered to disgorge $58 million.
The Commission's complaint alleged that Tri-West was promoted as an investment program to trade in fictitious "prime bank" securities. Investors were encouraged to send checks to various locations in California and Belize, and promised an annualized return of 120 percent. However, none of the investors' money was invested as promised. Instead, according to Department of Justice press releases, it was used to purchase millions of dollars worth of real property in Mexico and Costa Rica, as well as high-priced items such as a yacht, helicopter, and numerous late-model cars.
Three of Waage's associates have also been sentenced for their roles in the Tri-West scheme. Cary Alyn Waage, Waage's son, was sentenced to 50 months in prison and ordered to pay a $250,000 fine; Keith Nordick, who assisted Waage with a variety of Tri West-related business, was sentenced to 65 months in prison; and James Michael Webb, Tri-West's web page designer, was sentenced to 59 months in prison.
The United States Attorney's Office in Sacramento, which prosecuted the criminal cases, has also instituted civil and criminal actions seeking the forfeiture of millions of dollars in assets connected to the Tri-West scheme. The United States Attorney's Office has recovered over $2 million in forfeited assets from abroad, according to papers filed in the criminal case against Alyn Waage. Efforts continue to repatriate Tri West assets to the United States for eventual distribution to Tri-West investors from around the world.