Washington, DC

Litigation Release No. 15724 / April 28, 1998

State of Ohio v. Theodore Mong, Common Pleas Court, Licking County, Ohio, Case No. 97 CR 207

The Commission today announced that on April 16, 1998 Ted E. Mong (Mong), who is a defendant in a pending Commission action, was convicted by a Licking County, Ohio jury on 78 counts of Ohio criminal law violations. Mong was convicted of securities fraud, receiving stolen property, engaging in a pattern of corrupt activity, selling unregistered securities and acting as an unlicensed dealer of securities in violation of the Ohio Revised Code. On April 23, 1998, the Court sentenced Mong to a prison term of 15 to 35 years.

The charges against Mong stemmed from his sale of promissory notes to investors through certain Ohio-based corporations under his control, including McKenzie-Matthew, Inc. (McKenzie) and Liberty Bell Association, Inc. (Liberty Bell). Most of the investors who bought promissory notes from Liberty Bell and McKenzie reside in central Ohio. The Ohio indictment charged that Mong made such sales through fraudulent representations and practices. The Commission, in its pending action against Mong captioned, SEC v. Ted E. Mong, et al., S.D. Ohio, Case No. C2-96-989, also alleges that Mong employed misrepresentations in his sale of promissory notes to Liberty Bell and McKenzie investors by misrepresenting the risk of investing, the return investors would receive and the use of investor proceeds. The Commission further alleges that Mong raised more than $1.6 million from Liberty Bell and McKenzie investors and nearly all of the investors lost their entire investment. The Commission has alleged that Mong's conduct violated the antifraud provisions of the federal securities laws. In addition, the Commission has alleged that Mong sold securities without being registered with the Commission in any capacity in violation of the broker-dealer registration provisions of the federal securities laws.