SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 16349 / November 10, 1999
SECURITIES AND EXCHANGE COMMISSION v. GRANT R. CURTIS, LEO MANGAN, TIMOTHY H. MASLEY, JAMES W. NEAREN, RAIMOND IRNI, PEDRO DIBRITO GOMEZ, DONALD E. KESSLER, DAVID R. BEHANNA, ANDREA VARSI, JONATHAN D. LYONS, KENNETH A. ORR, LILLIAN M. VINCI, ANN MARIE NOEL, MICHAEL V. LIPKIN, JOSHUA S. SHAINBERG, PHILLIP J. MILLIGAN, AND ROBERT L. SHATLES, 99 Civ. 7357 (NG) (E.D.N.Y.)
The Securities and Exchange Commission filed suit today in the United States District Court for the Eastern District of New York against 17 individuals who participated in a fraudulent scheme to illegally retail stock at inflated prices. The Commission simultaneously submitted to the court Final Judgments of Permanent Injunction and Consents, consented to by five defendants.
Named in the complaint are:
GRANT R. CURTIS ("Curtis"), age 39, of Danville, California;
LEO MANGAN ("Mangan"), age 43, of Lindenhurst, New York;
TIMOTHY H. MASLEY ("Masley"), age 38, of Lindenhurst, New York;
JAMES W. NEAREN ("Nearen"), age 45, of Littleton, Colorado;
RAIMOND IRNI ("Irni"), age 48, of Brooklyn, New York;
PEDRO DIBRITO GOMEZ ("Gomez"), age 40, of Waterbury, Connecticut;
DAVID R. BEHANNA ("Behanna"), age 41, of Stony Brook, New York;
DONALD E. KESSLER ("Kessler"), age 55, of Deer Park, New York;
ANDREA VARSI ("Varsi"), age 42, of Hoboken, New Jersey;
JONATHAN D. LYONS ("Lyons"), age 37, of Old Brookville, New York;
KENNETH A. ORR ("Orr"), age 34, of Old Westbury, New York;
LILLIAN M. VINCI ("Vinci"), age 31, of Staten Island, New York.
ANNE MARIE NOEL ("Noel"), age 34, of Queens, New York;
MICHAEL V. LIPKIN ("Lipkin"), age 52, of New Jersey;
JOSHUA S. SHAINBERG ("Shainberg"), age 43, of New York, New York;
PHILLIP J. MILLIGAN ("Milligan"), age 35, of Fort Lee, New Jersey; and
ROBERT L. SHATLES ("Shatles"), age 31, of Northport, New York.
In its complaint, the Commission alleges that, from 1994 through 1996, Curtis, Mangan and Masley exercised undisclosed control over three public companies, Windswept Environmental Group, Inc.("Windswept"), ICIS Management Group, Inc. ("ICIS"), and Pilot Transport, Inc. ("Pilot"). Using that control, Curtis, Mangan and Masley caused these companies to issue more than eight million shares of stock, in most cases for little or no consideration, to various nominees, and then caused over five million shares of that stock, all of which was unregistered or improperly registered, to be sold to the public. The scheme generated illicit proceeds of more than $8 million.
The Commission further alleges that Nearen participated in this scheme by preparing false and misleading public filings; Irni and Gomez participated by acting as conduits and disposing of the fraudulently issued stock using phony foreign corporations, paying undisclosed compensation to brokers and buying and selling stock in foreign and domestic brokerage accounts, usually through the use of nominees; Kessler, Behanna, and Varsi furthered the fraud by concealing who controlled the companies, by signing documents authorizing the issuance of stock to nominees and by signing false and misleading public filings; and Lipkin, Shainberg, Orr, Lyons, Vinci, Noel, Milligan and Shatles retailed the fraudulently issued stock to the public and were paid undisclosed kickbacks.
The Commission alleges that, by engaging in the foregoing conduct:
The Commission seeks final judgments permanently enjoining the defendants from violating the above provisions of the securities laws, ordering an accounting and disgorgement of funds illegally obtained, plus prejudgment interest, assessing civil penalties, and other relief.
Simultaneous with the filing of the complaint, the Commission submitted to the court proposed Final Judgments by Consent, which have been consented to by Mangan, Nearen, Gomez, Kessler, and Varsi.
Curtis, Mangan, Masley, Nearen, Irni, Gomez, Kessler and Milligan have pleaded guilty in the United States District for the Eastern District of New York to charges relating to the conduct described in the complaint. In addition, on November 3, 1999, Orr was indicted by a grand jury sitting in the Eastern District of New York on charges stemming from the conduct described in the complaint.
The litigation is pending.http://www.sec.gov/litigation/litreleases/lr16349.htm