U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 20648 / July 18, 2008
SEC v. U.S. Sustainable Energy Corp. and John H. Rivera, et al., Civil Action No. 5:08-CV-245 DCB-JMR
SEC Charges Biofuel Company and its CEO with Fraud
The Securities and Exchange Commission (Commission) announced today that it filed a complaint in the United States District Court for the Southern District of Mississippi, Western Division, against U. S. Sustainable Energy Corp. (USSE) and John H. Rivera (Rivera), defendants, and Alice M. Price (Price) relief defendant. The complaint alleges that Rivera is USSE's Chairman and CEO and that USSE is a Nevada corporation, headquartered in Natchez, Mississippi.
The complaint further alleges that, between October 2006 and February 2007, Rivera caused USSE to issue false and misleading press releases regarding the company's business and technology to convert soybeans into biofuel. The Commission also alleges that during the same period, Rivera made false and misleading oral statements regarding USSE. Specifically, the Commission's complaint alleges that USSE and Rivera made material misrepresentations by claiming that USSE owned patents or pending patents; that USSE's cost to produce biofuel was $0.50 per gallon; that USSE had contracts for the sale of its product; that USSE had a fully operational plant; and that USSE's technology, when combined with the technology of another company with which it had agreed to merge, had an immediate market value of between 9 and 12 billion dollars. The complaint also alleges that after the press releases and false statements were issued, Price, who resided with Rivera at the time, sold USSE stock at artificially inflated prices, thereby profiting at least $721,000.
The complaint alleges that USSE and Rivera violated Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The Commission seeks permanent injunctions against future violations; disgorgement of ill-gotten gains plus prejudgment interest; imposition of civil penalties against USSE and Rivera; and a penny stock bar and an officer and director bar against Rivera. The Commission's complaint also names Price as a relief defendant, and seeks disgorgement of her ill-gotten gains plus prejudgment interest.