U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 19354 / August 31, 2005
Securities and Exchange Commission v. Mobile Billboards of America, Inc., International Payphone Company, Reserve Guaranty Trust, Michael A. Lomas and Michael L. Young, Civil Action No. 1:04-CV-2763 (NDGA September 20, 2004)
The Securities and Exchange Commission ("Commission") announced that on August 26, 2005, it filed an Application for an Order to Show Cause Why Defendant Michael A. Lomas Should Not Be Held in Civil Contempt For Failing to Comply with the Court's Orders Freezing Assets in the United States District Court for the Northern District of Georgia. The Application for an Order to Show Cause alleges that Michael A. Lomas withdrew over $382,800 from accounts that he controlled after the Court entered an Order freezing his assets on September 21, 2004. The application seeks to have Lomas held in civil contempt for his violation of the order freezing his assets and for the Court to compel Lomas to return these funds to the frozen accounts.
Previously, the Commission filed a civil injunctive action against Mobile Billboards of America, Inc. ("Mobile Billboards"), International Payphone Company ("International Payphone") itself and doing business as Outdoor Media Industries ("Outdoor Media"), Reserve Guaranty Trust ("Reserve Guaranty"), Michael A. Lomas ("Lomas") and Michael L. Young ("Young") on September 21, 2004. The complaint alleged that from 2001 through September 2004, Lomas, the chairman of the board of Mobile Billboards, and others operated a Ponzi scheme involving the sale and leaseback of mobile billboards, selling more than $60.5 million of mobile billboard investments to more than 700 investors nationwide in violation of the federal securities laws.
The complaint charged the defendants with violations of Sections 5(a), 5(c) and 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 ("Exchange Act") and Rule 10b-5 thereunder and Lomas and Young with aiding and abetting violations of Section 15(a) of the Exchange Act,. The complaint sought, among other relief, injunctions against future violations, disgorgement of all ill-gotten gains with prejudgment interest, and the imposition of civil penalties against defendants. On the same day the complaint was filed, Lomas and the other defendants consented to orders permanently enjoining the defendants from future violations, freezing the assets of defendants, ordering accountings by Lomas and Young, and appointing a Receiver for the assets of Mobile Billboards, International Payphone, itself and doing business as Outdoor Media, and Reserve Guaranty.