Edward S. Digges, Jr.; Nexstar Communications, LLC; TMT Equipment Company, LLC; TMT Management Group, LLC; POSA, LLC; POSA TMT, LLC; Televest Communications, LLC; Televest Group, LLC; and Spin Drift, LLC

U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 19866 / October 13, 2006

SEC v. Edward S. Digges, Jr.; Nexstar Communications, LLC; TMT Equipment Company, LLC; TMT Management Group, LLC; POSA, LLC; POSA TMT, LLC; Televest Communications, LLC; Televest Group, LLC; and Spin Drift, LLC, Civil Action No. 6:06-CV-137-Orl-19KRS (MD Fla.)

On October 12, 2006, the Honorable Karla R. Spaulding, United States Magistrate Judge for the Middle District of Florida, entered an order to show cause why defendant Edward S. Digges ("Digges") should not be held in contempt for his violation of the Court's February 23, 2006 order freezing assets ("Asset Freeze Order"). The order to show cause schedules a hearing before Judge Spaulding at 8:30 a.m. on October 16, 2006.

The Commission's motion for an order to show cause argues that Digges violated the Asset Freeze Order by selling or otherwise encumbering certain real estate that he controlled. The Commission's motion also argues that Digges subsequently concealed his conduct by testifying, falsely, at his deposition that he had not conveyed the real estate at issue.

In the pending litigation, the Commission alleges that Digges operated a ponzi scheme from April 2003 until February 2006. Pursuant to the scheme, Digges fraudulently sold at least $15 million in an investment in which investors purchased a point-of-sale credit card terminal from one of the defendants and then leased the terminal to another defendant purportedly for placement in a retail store to generate service fee revenue. Digges represented to the salespeople, and through them to investors, that these obligations were "assured," and that he would maintain a "reserve fund" to cover six months of monthly lease payments and a "sinking fund" to cover the eventual repurchase of the terminals. The complaint alleges that Digges had no basis to assure investors of either their lease payments or the repurchase of the terminals, and the defendants never created or maintained a reserve fund or a sinking fund.

See also: L. R. 19554 (February 3, 2006); and L. R. 19574 (February 23, 2006).