U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 19788 / August 2, 2006
SEC v. ETS Payphones, Inc., and Charles E. Edwards, Defendant, Civil Action File No. 1:00-CV-2532-JTC (N.D. Ga.).
On July 6, 2006, the Honorable Jack T. Camp, U. S. District Judge for the Northern District of Georgia, entered a final judgment of permanent injunction as to defendant Charles E. Edwards ("Edwards"), founder of ETS Payphones, Inc. ("ETS").
The final judgment enjoined Edwards from future violations of Sections 5(a), 5(c) and 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. Edwards consented to the entry of the final judgment without admitting or denying any of the allegations of the Commission's Complaint.
The Complaint, filed on September 30, 2000, alleged that Edwards and ETS engaged in fraud in the offer and sale of unregistered securities in the form of investment contracts, and alleged that the defendants promoted a massive fraudulent scheme through the use of insurance agents and over the internet, in which ETS raised more than $300 million from more than 10,000 investors. The investments involved the sale of payphones, which were leased back from the investors in exchange for a fixed rate of return. In fact, the investment program was a Ponzi scheme. On February 23, 2006, Edwards was sentenced to 13 years incarceration and restitution of $320,397,837 based on his earlier conviction on 83 counts of wire fraud, money laundering and conspiracy to commit money laundering.
Investors are advised to read the SEC's "Cyberspace" Alert before purchasing any investment promoted on the Internet. The free publication, which alerts investors to the telltale signs of online investment fraud, is available on the Investor Assistance and Complaints link of the SEC's Home Page on the World Wide Web www.sec.gov. It can also be obtained by calling 800-SEC-0330. Investors are encouraged to report suspicious Internet offerings (or other suspicious offerings) via e-mail to email@example.com. A user-friendly form to assist you in making a report is available at the Enforcement Complaint Center on the Enforcement Division link of the SEC Home Page www.sec.gov. Investors can also mail a report to the SEC Complaint Center, 100 F Street, NE, Washington, D.C. 20549-0213, or send a fax to 202-772-9295.