Securities Exchange Act of 1934
Release No. 46247 / July 24, 2002
Administrative Proceeding File No. 3-10844
Commission Institutes Administrative Proceedings Against Richard Mann
On July 24, 2002, the Commission instituted an administrative proceeding against Richard Mann (Mann), based on the fact that he has been enjoined and criminally convicted for violations of the federal securities laws. On April 8, 2002, Mann was permanently enjoined for violations of the antifraud provisions of the federal securities laws arising from his role in a massive Ponzi scheme in which World Vision Entertainment, Inc. (World Vision) raised $64 million through the sale of nine-month promissory notes to over 1,000 investors. In its complaint, the Commission alleged, among other things, that Mann orchestrated the World Vision Ponzi scheme, distributed fraudulent offering materials and promoted World Vision to an extensive sales network, which was primarily recruited by Mann. The complaint also alleged that Mann acted as an unregistered broker-dealer in: introducing the company's officers to sales contacts; aiding in the preparation of offering materials; recruiting note marketers; distributing offering materials to the World Vision sales force; processing note applications and interest checks for the notes; and receiving transaction-based compensation from World Vision for his efforts. In that action, the Court ordered Mann to pay disgorgement of $1,587,353.84 plus prejudgment interest of $529,517, and imposed a civil penalty of $110,000. On November 30, 2001, Mann was convicted of conspiracy to commit federal securities fraud in an unrelated nine-month promissory note case. He was sentenced to eighteen months and is currently incarcerated in Estill Federal Correction Institution in Estill, South Carolina.
A hearing will be scheduled before an administrative law judge to determine whether the allegations contained in the Order are true, to provide Mann an opportunity to dispute these allegations, and to determine whether it is necessary and appropriate in the public interest to bar Mann from associating with a broker or dealer pursuant to Section 15(b) of the Exchange Act.