Release No. 7697 / July 7, 1999

File No. 3-9892

In the Matter of

Gary J. Pierce and C.S.I. Ag.,



On May 11, 1999, the U.S. Securities and Exchange Commission ("Commission") issued an Order Instituting Public Cease-and-Desist Proceedings ("Order Instituting") pursuant to Section 8A of the Securities Act of 1933 ("Securities Act") against Gary J. Pierce ("Pierce") and C.S.I. Ag. ("CSI").

Pierce has submitted an Offer of Settlement ("Offer") which the Commission has determined to accept. Solely for the purpose of these proceedings and any other proceedings brought by or on behalf of the Commission or to which the Commission is a party, prior to a hearing pursuant to the Commission's Rules of Practice, 17 C.F.R. Section 201.100 et seq., and without admitting or denying the findings contained in this Order, except those pertaining to the jurisdiction of the Commission over him and over the subject matter of these proceedings, which are admitted, Pierce consents to the entry of this Order Making Findings and Imposing Cease-and-Desist Order.

II. On the basis of this Order Making Findings and Imposing Cease-and-Desist Order, the Order Instituting and the Offer submitted by Pierce, the Commission finds 1 that:

A. Pierce, age 48, resides in Studio City, California.

B. CSI at one time was a Turks & Caicos corporation in the British West Indies. At all times relevant to this matter, Pierce was the owner, sole shareholder, president and chief executive officer of CSI.

C. At all times relevant to this matter, Government of Free Vietnam ("GFV") was an unincorporated political association operating out of Garden Grove, California, the purported objective of which is to promote freedom and democracy in Vietnam.

D. From at least July 1997 to February 1999, Pierce and CSI solicited investors to participate in a $500 million unregistered bond offering on behalf of GFV. Pierce and CSI solicited investments in the bond offering by preparing and providing to GFV promotional materials and other documents which were posted on GFV's Internet website and published in GFV's newspaper, which was distributed throughout the U.S. and overseas.

E. Pierce's and CSI's offering materials invited potential investors to participate in CSI's "Gold Reserves Bond Offering." The materials promised investors who made an initial $10,000 minimum investment a 5.5% annual return, plus double their original investment at the end of five years, resulting in an overall average annual return of at least 19.6%. Pierce prepared other documents which indicated that GFV, CSI and/or Pierce intended to generate that return through an unspecified "yield rich trading program" run by a Pierce-related entity.

F. Pierce and/or CSI were to be compensated in an amount equal to six percent of each investment in the bond offering.

G. In their offering materials, Pierce and CSI made and delivered materially false or misleading statements or omitted to state material facts necessary to make the statements made, in the light of the circumstances under which they were made, not misleading, including, but not limited to, the following:

    1. Pierce and CSI represented that the bond offering was collateralized by $500 million of CSI's gold reserves in Chile, the total value of which was in excess of $20 billion, when, in fact, they had no reasonable basis for assigning any value to any such gold reserves, and to extract any existing gold would require millions of dollars and years of development, thereby significantly diminishing the value of CSI's gold reserves as "collateral," and materially undermining the safety of the investment; and
    2. Pierce and CSI failed to disclose the use of the proceeds, including the amount of their compensation and the fact that only 30% of the investment would be used to generate the returns promised to investors, thereby requiring GFV, CSI and/or Pierce to generate an average annual rate of return on those funds in excess of 56% to pay investors their promised average annual return of 19.6%.

H. Pierce and CSI knew or were reckless in not knowing that their materials contained the above-described false or misleading statements or omissions.

I. The bonds offered for sale by Pierce and CSI are securities under Section 2(a)(1) of the Securities Act. No registration statement has ever been filed with the Commission for the offering. In addition, Pierce's and CSI's activities constitute an "offer to sell" as defined in Section 2(c)(3) of the Securities Act.

J. Pierce and CSI made use of the means or instruments of transportation or communication in interstate commerce or of the mails in connection with the above-described conduct to offer to sell securities, to employ a device, scheme or artifice to defraud and to engage in any transaction, practice, or course of business which operated or would operate as a fraud or deceit upon the purchaser.

K. By virtue of the above-described conduct, Pierce violated Sections 5(c), 17(a)(1) and 17(a)(3) of the Securities Act.


In view of the foregoing, the Commission deems it appropriate to impose the sanction specified in the Offer submitted by Pierce.

Accordingly, IT IS HEREBY ORDERED, pursuant to Section 8A of the Securities Act, that Pierce cease and desist from committing or causing any violation and any future violation of Sections 5(c), 17(a)(1) and 17(a)(3) of the Securities Act.

For the Commission, by its Secretary, pursuant to delegated authority.

Jonathan G. Katz



The findings herein are made pursuant to Pierce's Offer of Settlement and are not binding on any other person or entity in this or any other proceeding.