Litigation Release No. 19516 / December 28, 2005

United States of America v. Larry Stockett, No. CR-S-03-0430-HDM-PAL (USDC D. Nevada)

Securities and Exchange Commission v. Larry A. Stockett, No. CV-S-02-1446-KJD-LRL (USDC D. Nevada)

The Securities and Exchange Commission ("Commission") announced that on December 20, 2005, a federal jury convicted Larry Stockett ("Stockett"), a former Las Vegas resident, of multiple counts of wire and securities fraud. He faces up to 20 years in prison and a $5,000,000 fine on the securities fraud charge, and up to 20 years in prison and a $250,000 fine on each wire fraud charge. From about October 1999 to March 2004, Stockett devised a "pump and dump" scheme to defraud individuals of money and property by inducing them to invest in a company called "Hightec" and its wholly-owned subsidiary "U.S. Cement," both controlled solely by Stockett. The scheme involved the dissemination of false and misleading positive information about the companies through an internet site, press releases, emails and "infomercials." These false and misleading advertisements stated that U.S. Cement had an established cement distribution network, access to millions of dollars in financing, and prominent retail customers.

As a part of the scheme, from August 2000 to September, Stockett and another individual induced a Canadian couple to loan Stockett approximately $700,000 to purchase cement and a warehouse for U.S. Cement. They loaned the money based on the false misrepresentations and omissions made about U.S. Cement's ability and capability to purchase, import and distribute cement. Within weeks of receiving the monies from the Canadian couple, Stockett had purchased a $750,000 residence in Henderson, Nevada, a Jaguar automobile, and other items of luxury, and paid monies toward the purchase of a boat in the Virgin Islands.

The Commission filed a civil complaint against Stockett in April 2002 alleging that he orchestrated a fraudulent scheme regarding Hightec and The S.I.N.C.L.A.R.E. Group, Inc., a second former publicly traded company he controlled, in which Stockett, among other things, issued numerous false press releases and other public statements concerning the companies and unlawfully sold his restricted shares of Hightec stock in unregistered transactions. A final judgment in the Commission's litigation was entered against Stockett on March 4, 2004, permanently enjoining him from violating numerous provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934, prohibiting him from acting as an officer or director of a public company, ordering disgorgement and prejudgment interest totaling $1,836,181.56, and ordering a civil penalty of $120,000. After Stockett's scheme to defraud was uncovered, he fled from the United States to St. Maarten, Netherlands Antilles, and later to Costa Rica. Stockett was indicted on the criminal charges in August 2003, and arrested in Costa Rica in February 2004. He was extradited from Costa Rica and returned to Las Vegas to answer the criminal charges in February 2005. Stockett is scheduled to be sentenced in the criminal case in March 2006.