U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 19489 / December 8, 2005
United States of America v. Colin Nathanson, United States District Court for the Central District of California, Criminal No. 05-972
Securities And Exchange Commission v. Colin Nathanson, Individually and Doing Business as Nathanson Investment Trust, Giant Golf Company, Play Big Enterprises, Inc., Starquest Management, Inc., Whitehawk Consulting Group, Inc., Leafhead Consultants, Inc., Nettel Consulting Corp., Yrmac Consulting Services, Inc., and Millennium Technical Group, Inc. Case No. 6:04 CV-112 ORL-18-JGG (M.D. Fla.)(filed January 27, 2004)
Architect Of $28.4 Million Investment Scheme Indicted
The Securities and Exchange Commission announced today that on December 5, 2005, the United States Attorney's Office for the Central District of California unsealed an indictment against Colin Nathanson, age 56, of Ladera Ranch, California, charging him with six counts of mail fraud.
The indictment alleges that from January 2000 through March 2004, Nathanson used telemarketing "boiler rooms" to fraudulently induce several hundred people to invest $28.4 million with the "Nathanson Investment Trust." Victims were told that they would acquire an ownership interest in an "internet based technological company." According to the indictment, Nathanson first claimed that the private internet company was about to conduct an initial public offering, but later told investors that the company had instead elected to pursue merger negotiations with a large, unnamed publicly-held company. Nathanson claimed that he could not disclose the identity of the private internet company due to the existence of a confidentiality agreement.
The indictment further alleges that Nathanson, rather than investing in a private internet company, used investor monies to finance the unprofitable business operations of Nathanson's golf companies, Giant Golf Company and Play Big Enterprises, Inc. The indictment also alleges that Nathanson used investor funds to pay for extravagant personal expenses, including gambling expenses, and the payment for three houses located in Orange County, California.
The criminal indictment followed the Commission's civil case against Nathanson. On March 25, 2004, the Commission filed an emergency action against Nathanson and his various business entities alleging that since 2001, Nathanson and his companies raised $29.5 million from over 1800 investors nationwide through four fraudulent investment schemes. The court granted a temporary restraining order against Nathanson and his companies, and appointed a receiver over the defendant entities. On April 5, 2004, the Commission obtained a preliminary injunction against all of the defendants, and on August 26, 2004, the court entered a final judgment against all of the defendants pursuant to their consents.