U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 19822 / September 6, 2006

SEC v. Jon W. James; J.W. James & Associates; J.W. James Borrowing Entity, LLC; J.W. James Investment Group Fund One, LLC; The James Company Fund I, LLC; The James Company Borrowing Entity, LLC; Virtual Cash Flow Corporation; The Cloaking Device, Inc.; and J.W. James Acquisitions, LLC, No. CV 06 4966 (FMC) (FFMx) (C.D. Cal.)

Permanent Receiver Named and Temporary Restraining Order Extended for Six Weeks

The Securities and Exchange Commission announced that on August 24, 2006, the Honorable Florence-Marie Cooper, United States District Judge for the Central District of California, named Edythe L. Bronston as the permanent receiver over the assets of J.W. James & Associates ("JWJA"); J.W. James Borrowing Entity, LLC; J.W. James Investment Group Fund One, LLC; The James Company Fund I, LLC; The James Company Borrowing Entity, LLC; Virtual Cash Flow Corporation; The Cloaking Device, Inc; and J.W. James Acquisitions, LLC. The Court further extended until October 10, 2006, the temporary restraining order previously issued and ordered the continuation of the asset freeze, requirement of an accounting, prohibition on document destruction, and expedited discovery.

According to the Commission's complaint, since at least January 2004, defendant Jon W. James, through JWJA, has solicited investors with direct mail invitations to free dinner seminars focusing on retirement planning, and fraudulently raised over $22 million. As alleged in the complaint, investors are falsely told that their funds will be used for profitable real estate transactions that will provide returns, which were represented to be as high as 24%. The complaint alleges that the defendants offered and sold promissory notes and, later, interests in limited liability companies.

The Commission's complaint alleges that, throughout 2004 and 2005, defendants did not purchase any real estate or real estate related assets from which to pay investor returns. Additionally, the complaint alleges that the defendants misrepresented to investors that their investments would be secured by real property or by monies owed to JWJA from real estate transactions. The complaint also alleges that defendants fraudulently failed to disclose that they used new investor money to pay returns to previous investors.

The Commission continues to seek preliminary and permanent injunctions, return of ill-gotten gains with prejudgment interest, and penalties against all defendants.

A hearing on whether a preliminary injunction should be issued against the defendants is scheduled for October 10, 2006.

Investors may direct their inquiries to the permanent receiver, Edythe L. Bronston, at (818) 528-2893, or visit the receiver's website at www.jamesreceivership.com.

For additional information, see Litigation Release No. 19801.