U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 19934 / December 5, 2006

Securities and Exchange Commission v. International Fiduciary Corp., S.A., et al., U.S. District Court for Eastern District of Virginia (Civil Action No. 1:06CV1354)

SEC Files Emergency Enforcement Action To Halt $18.2 Million Prime Bank Scheme

Arlington, Virginia Company Solicited Investors in British Columbia and Pacific Northwest

The U.S. Securities and Exchange Commission yesterday filed an emergency action against Daniel Eric Byer, Malcolm Cameron Boyd Stevenson, Preston David Pinkett II, and International Fiduciary Corp., S.A. ("IFC"), alleging that the defendants defrauded over 180 investors in a fraudulent "Prime Bank" scheme which appears to have raised at least $18.2 million to date. IFC is a Virginia corporation with offices in Arlington, Virginia. Pinkett, who also lists an Arlington, Virginia address, is IFC's chairman and CEO. Byer and Stevenson are Canadians.

The Complaint alleges that defendants solicited investors in the Pacific Northwest, primarily in the Canadian province of British Columbia, including Abbotsford, B.C. According to the SEC's pleadings, investors were requested to, and did, send their investments to a bank in Arlington, Virginia.

The SEC's pleadings allege from July 2003 to the present, Defendants solicited from investors a minimum investment of $100,000 in what was promised to be a risk-free program with a monthly rate of return in 2006 of 6% per month, or 72% per year. In actuality, the "1st tier medium term bank notes" that this program purportedly invested in do not exist. Instead, the complaint alleges that defendants used investor funds to pay the monthly returns in a classic pyramid or ponzi scheme and wired money to banks and entities unrelated to the purported investment program.

On Nov. 1, 2006, the BCSC issued a Temporary Order and Notice of Hearing ordering the defendants to cease trading the IFC investments to residents of British Columbia.

The Commission alleged that the defendants violated the registration and antifraud provisions of the Securities Act of 1933 ("Securities Act") and the antifraud provisions of the Securities Exchange Act of 1934 ("Exchange Act"). For permanent relief, the Commission requested injunctions against future violations, disgorgement, prejudgment interest and civil penalties as to all defendants.

The Court subsequently entered an order, among other things, temporarily restraining defendants from violating Section 10(b) of the Exchange Act (15 U.S.C. § 78j(b)), Rule 10b-5 (17 C.F.R. § 240.10b-5) and Sections 5 and 17(a) of the Securities Act (15 U.S.C. §§ 77(e) and 77q(a)); freezing investors' funds wherever located and all assets of the defendants; prohibiting the defendants from accepting or depositing additional funds from actual or potential investors; requiring an immediate accounting; preventing document alteration or destruction; expediting discovery; and requiring defendants to repatriate all investor funds into the United States.

The Commission thanks the BCSC and the Virginia State Securities Commission for their assistance in this ongoing investigation.

The Commission has provided information warning investors about Prime Bank investment scams. See http://www.sec.gov/divisions/enforce/primebank.shtml.

SEC Complaint in this matter