Litigation Release No. 19296 / July 11, 2005

SECURITIES AND EXCHANGE COMMISSION v. William L. Atkinson, II and James R. Walker, Civil Action No. 04cv1477 (W.D. Pa.)


On July 11, 2005, the Securities and Exchange Commission announced that it has settled its previously filed civil injunctive action against former Family Heritage Estate Portfolio, Inc. (Family Heritage) officers and owners William L. Atkinson, II and James R. Walker. Without admitting or denying the allegations in the complaint, Atkinson and Walker each consented to the entry of a Final Judgment, permanently enjoining them from further violations of the antifraud and registration provisions of the federal securities laws. In addition, Walker agreed to pay disgorgement totaling $100,000, which monies will be paid to Family Heritage investors, through the Family Heritage receivership established by the Court of the Common Pleas of Allegheny County, Pennsylvania. The Court entered Final Judgment against Atkinson on June 9, 2005, and Final Judgment was entered against Walker on July 8, 2005. The Commission's complaint, filed in September 2004, in the United States District Court for the Western District of Pennsylvania, in Pittsburgh, alleged fraud in the offer and sale of unregistered investments in automatic teller machines (ATMs).

Specifically, the complaint alleged that, from 1998 through April 2003, Atkinson and Walker defrauded investors through the offer and sale of unregistered securities, in the form of investment contracts issued by Family Heritage. Directly and through salespersons, the defendants fraudulently induced individuals to purchase securities by making numerous misrepresentations and omissions of material facts. The complaint alleges that the defendants misled investors about the risks of the investment and Family Heritage's use of new investor funds to make monthly payments to other investors. The complaint also alleges that Walker falsely told investors that they could not lose their investment and that their money could be withdrawn at any time. In total, the defendants fraudulently raised $6.34 million from more than 320 investors.

The Commission's complaint alleged that the sale of unregistered investment contracts by Atkinson and Walker violated Sections 5(a) and 5(c) of the Securities Act of 1933 (Securities Act); and that the defendants' fraudulent omissions and misrepresentations in connection with the sales of those investment contracts violated Sections 17(a) of the Securities Act and Section 10(b) of the Securities Exchange Act of 1934, and Rule 10b-5 thereunder.