SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 16408 / January 14, 2000
United States v. John Lauer, et al., (N.D. Ill., Case No. 99 CR 0874, Filed November 17, 1999)
The Securities and Exchange Commission (Commission) and the United States Attorney for the Northern District Of Illinois (U.S. Attorney) announce the filing of a three count criminal information against John D. Lauer (Lauer) of Chicago, Illinois for among other things engaging in acts which violated a prior Commission injunction. Lauer, the former director of risk management for the Chicago Housing Authority (CHA), had previously been enjoined by the Commission on October 24, 1995, for investing more than $14 million of CHA pension funds in fictitious "prime-bank" instruments in exchange for more than $4 million dollars in undisclosed payments made to him and companies he controlled by the promoters of the prime-bank note program. Also in October 1995, the U.S. Attorney convicted Lauer for mail fraud, wire fraud and obstructing the Commission's investigation relating to the CHA fraud.
The current information, charges Lauer with two counts of mail fraud and one count of wire fraud for engaging in three additional schemes to defraud pending the beginning of his criminal sentence for his prior scheme. Specifically, Lauer is alleged to have solicited investors to invest in a purported paint coating equipment reselling business by misrepresenting and omitting to state material facts regarding, among other things, his use of investor funds to pay other investors and his own personal and business expenses. Lauer is also alleged to have solicited investors to invest in a business whose purpose was purportedly to manufacture ceramic mugs and clocks while misrepresenting and omitting to state material facts regarding the risks and returns associated with the investment. Finally, Lauer is alleged to have defrauded the owner of a $635,000 lake front home and others by misrepresenting his ability to pay for the property, obtaining a loan for the earnest money deposit under false pretenses and paying for personal property associated with the home with a check he knew to be drawn on an account with insufficient funds.
Lauer is currently serving a 38 month prison term for his prior conviction. On November 30, 1999, Lauer pleaded guilty to the acts alleged in the information and is scheduled to be resentenced for his original crimes, his new activity and his violation of the Commission's injunction.http://www.sec.gov/litigation/litreleases/lr16408.htm