U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 20048 / March 19, 2007
SEC v. Archie Paul Reynolds a/k/a Dr. A. Paul Reynolds, and Success Trust and Holding LLC, Civil Action No. 1:06-CV-1801-RWS (NDGA)
Commission Moves that Defendant Archie Paul Reynolds be Held In Civil Contempt for Violating Asset Freeze
On March 16, 2007 the Commission filed a motion for an order to show cause and order holding Archie Paul Reynolds in civil contempt for violating the preliminary injunction and asset freeze entered by the Court on August 24, 2006. According to the Commission's motion, Reynolds sold a Mercedes-Benz automobile for $37,000 in December 2006. The car had originally been purchased in February 2006 using $57,000 in investor funds from a bank account in the name of Success Trust and Holding LLC. However, the car was titled in Reynolds' name. The application seeks to have Reynolds held in civil contempt for his violation of the order freezing his assets; an order requiring him to pay the $37,000 proceeds from the sale of the car to the Receiver; and an order requiring him to pay the $5,980 difference between the proceeds from the sale of the car and its fair market value at the time of the sale to the Receiver.
Previously, the Commission filed a complaint against Reynolds and Success Trust and Holding LLC (Success Trust) on August 2, 2006. The complaint alleged that, from as early as May 2005 through the present, Reynolds and Success Trust have raised millions of dollars from at least 500 investors by fraudulently offering and selling interests in three investment programs. The complaint alleged that the investment scheme is comprised of three separate Programs: a Real Estate Program, a Best Efforts 480% Annual Return Program, and a Private Party Loan Agreement. The largest program, the Real Estate Program, in which more than $2 million was invested, projected exorbitant returns from investments in vaguely described "banking processes" which do not in fact exist. In addition, the complaint alleged that Success Trust's Programs resemble "Prime Bank" frauds.
The complaint charged the defendants with violations of Sections 5(a), 5(c) and 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The complaint sought, among other relief, injunctions against future violations, disgorgement of all ill-gotten gains with prejudgment interest, and the imposition of civil penalties against defendants.
For further information, please see Litigation Release No. 19793 (August 3, 2006).