SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 16374 / November 30, 1999
FEDERAL COURT ORDERS DEFENDANTS IN SEC ACTION TO DISGORGE OVER $2.5 MILLION IN ILL-GOTTEN GAINS AND TO PAY CIVIL PENALTIES TOTALLING $400,000
Securities and Exchange Commission v. Shane T. Vaessen, et al., Civil Action No. 98-1964-CIV-T-26F (M.D. Florida, Tampa Div.)
The Securities and Exchange Commission (SEC) announced that on November 23, 1999, the United States District Court for the Middle District of Florida entered an Order of Disgorgement plus Prejudgment Interest and Civil Money Penalties against Shane T. Vaessen, Veronika M. Vaessen, Taft Womack, and Frank Gaines. The Court ordered the Vaessens to disgorge $2,459,683 plus prejudgment interest, Womack to disgorge $87,364 plus prejudgment interest, and Gaines to disgorge $15,000 plus prejudgment interest. The Court also ordered Shane Vaessen, Veronika Vaessen, Womack, and Gaines, each to pay a civil money penalty of $100,000 for their violations of the federal securities laws.
On July 28, 1999, the Court had entered a Default Judgment of Permanent Injunction and Other Relief against Shane Vaessen, Veronika Vaessen, Womack, and Gaines (Default Judgment). The Default Judgment enjoined the Vaessens, Womack, and Gaines from violating Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933 and Section 10(b) and Rule 10b-5 of the Securities Exchange Act of 1934 (Exchange Act). The Default Judgment also enjoined Womack and Gaines from violating Section 15(a)(1) of the Exchange Act.
The SEC sued Shane and Veronika Vaessen, Womack, Gaines, and others, in September 1998 alleging that they had violated the federal securities laws in connection with a Ponzi scheme organized by Shane Vaessen and his wife, Veronika. The SEC alleged that the Vaessens and their sales agents fraudulently sold unregistered securities of the Vaessens' purported company, International Capital Corporation 2000 (ICC 2000). According to the SEC's complaint, ICC 2000 raised over $3.3 million from over 100 investors in several states by misrepresenting how investors' funds would be used. Contrary to the representations of the Vaessens and ICC 2000 sales agents, investor funds were primarily used to pay interest and principal to earlier investors, to pay sales commissions, and for the Vaessens' personal expenses.
The Vaessens' last known address was in Las Vegas, Nevada. Womack's last known address was in St. Petersburg, Florida. Gaines is now in jail in Lebanon, Indiana.