U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 20543/ April 29, 2008
Securities and Exchange Commission v. Elfindepan, S.A., et al., United States District Court for the Middle District of North Carolina, Civil Action No. 1:00CV00742
Final Judgments Entered Against Elfindepan S.A., Strategic Asset Funds S.A., and Southern Financial Group for Fraudulent High-Yield Investment Scam
The Securities and Exchange Commission announced that the U.S. District Court for the Middle District of North Carolina entered final judgments on April 15, 2008 against defendants Elfindepan, S.A., Strategic Asset Funds, S.A. (SAF), and Southern Financial Group (SFG) for their roles in a high-yield investment scheme. Elfindepan, a defunct Costa Rican company, SAF, a defunct Panamanian company, and SFG, a de facto trust, were controlled by defendant Tracy Dunlap. Without admitting or denying the allegations in the Commission's complaint, Elfindepan, SAF, and SFG each consented to the entry of final judgments permanently enjoining them 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. The Court also ordered Elfindepan, SAF, and SFG to pay disgorgement of $5,577,855.05, $618,332.07, and $220,935.47 respectively. The disgorgement obligations of both Elfindepan and SFG are deemed satisfied by the corresponding amounts that the receiver recovered from each pursuant to the Court's March 23, 2001 order. SAF's disgorgement obligation is deemed satisfied by the corresponding amount that the receiver recovered from SAF pursuant to the Court's July 24, 2001 order.
On August 10, 2000, the Commission filed a complaint, which was amended on August 30, 2002, alleging that Elfindepan, SFG, SAF, and others defrauded investors nationwide of approximately $30 million in connection with a high-yield investment scheme involving the unregistered offer and sale of Securities of Elfindepan, a purported Costa Rican financial company. The complaint alleges that Elfindepan made numerous materially false and misleading statements including promising investors that their investments were secure and would yield returns of as much as 40% to 50% per month. Investors were not told that proceeds from later investors were being used to pay earlier investors and distributors in classic ponzi-scheme fashion. According to the complaint, SAF perpetrated a variation of the Elfindepan scheme through the internet. In 2001, the Court appointed a receiver for Elfindepan, SFG, and SAF. The receiver has distributed proceeds derived from the Commission's suit along with other funds collected during the litigation to defrauded investors.
For further information, please see Litigation Release Nos. 16649 (Aug. 10, 2000); 16892 (Feb. 8, 2001); 16977 (April 26, 2001); 17723 (Sept. 12, 2002); and 19206 (April 27, 2005).