U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 16345 / October 29, 1999
SEC v. Yes Entertainment, LLC, Yes Entertainment Network, LLC, Yes Entertainment Network, Inc., Ronald T. Mulhall and Eugene M. Carriere A/K/A Gene Carrier, Civil Action No. 99-11280 RAP (AJWx)
The United States Securities and Exchange Commission today announced that it has filed an emergency lawsuit in federal court to halt an ongoing fraud by Ronald Mulhall, Eugene Carriere, and entities controlled by them, in which more than $8.8 million has been raised from more than 600 investors in a scam involving Internet website-based "channels". The Court ordered the defendants to immediately cease their fraudulent activities and placed a freeze on their assets for 10 days pending a hearing to determine the full extent of their fraudulent conduct. The Complaint was filed and the Court's order was issued on October 28 but was sealed until today, in order to avoid alerting the defendants of law enforcement interest until the Federal Bureau of Investigation and U.S. Postal Inspectors could execute search warrants they had obtained for the premises of the defendants and boiler rooms located in the Los Angeles area.
The Complaint alleges that the defendants are selling unregistered securities in Yes Entertainment, LLC, a Nevada limited liability company which operates Internet website-based "channels". The defendants represent to investors that sales commissions are 12% when, in fact, they are 45%, and that Mulhall, the President and Chief Executive Officer of Yes Entertainment Network, Inc., is a "highly successful lawyer" when, in fact, he has been disbarred by the State Bar of California for misappropriating client funds. In addition, the defendants have diverted substantial sums for personal use and have wired almost $3.2 million to Hong Kong.
Defendants are selling securities in Yes Entertainment, LLC to investors located throughout the country through at least two boiler rooms, one in Beverly Hills and the other in Lake View Terrace. Mulhall, age 53, is a resident of El Segundo, California and Carriere, age 50, is a resident of Westminster, California. Yes Entertainment Network, Inc. is a Nevada corporation with offices in Century City.
The lawsuit, which was filed in the United States District Court for the Central District of California, charges the defendants with violating the antifraud provisions of Section 17(a) of the Securities Act of 1933 (Securities Act) and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. In addition, it charges the defendants with violating Sections 5(a) and 5(c) of the Securities Act.