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U.S. Securities and Exchange Commission


Litigation Release No. 16577 / June 1, 2000

SEC v. Jamie P. Piromalli, Steven Brewer, A. Michael Jaillett, Richard Mann and Seth Miller, Case No. C2-00622 (S.D. Ohio, filed June 1, 2000)

On June 1, 2000, the Securities and Exhange Commission ("SEC") filed an action in the United States District Court for the Southern District of Ohio, Eastern Division, charging that Jamie P. Piromalli, Steven Brewer, A. Michael Jaillett, Richard Mann and Seth Miller (collectively, "the Defendants") engaged in a nationwide Ponzi scheme through the offer and sale of unregistered nine-month promissory notes issued by World Vision Entertainment, Inc. ("World Vision"), a company located in Altamonte Springs, Florida. The Complaint alleges that from June 1996 through July 1999 World Vision, through the Defendants, raised at least $64 million from approximately 1,200 investors in 33 states from the sale of promissory notes.

The Complaint alleges that the Defendants offered and sold securities in the form of nine-month promissory notes without registering them with the Commission. In furtherance of the scheme, the Complaint alleges that the Defendants, directly and indirectly, through a nationwide sales network, made numerous false and misleading statements to investors about the World Vision notes. The Defendants misrepresented that the notes were unconditionally guaranteed and insured and that all of the proceeds of the offering would be used to develop World Vision's products. In reality, the Defendants allegedly used the proceeds of the note offering to pay for the personal and business expenses of company officers and directors, to cover interest and principal payments to investors and to pay large, undisclosed commissions to the sales network.

The Complaint alleges that each Defendant played an integral role in the fraud. Piromalli and Brewer initially prepared fraudulent offering materials with the assistance of Mann, a veteran of at least one prior nine-month note program. Piromalli, Brewer, Mann and Jaillett then distributed the fraudulent offering materials to the sales network throughout the country. Each of the Defendants also allegedly disseminated false and misleading information about World Vision notes to sales representatives and investors in road shows, correspondence and over the phone. The Complaint further alleges that Mann and Miller acted as unregistered broker-dealers through their recruitment and management of the sales network. Among other things, Mann and Miller distributed the fraudulent offering materials to the sales network for use in the solicitation of investors, processed note transactions and were paid a commission on each note sold or renewed by the sales network.

Based on the foregoing, the SEC's Complaint charges that the Defendants violated the antifraud and securities registration requirements of the federal securities laws, Sections 5(a), 5(c) and 17(a) of the Securities Act of 1933, Section 10(b) of the Exchange Act of 1934 ("Exchange Act") and Rule 10b-5 thereunder, and that Mann and Miller violated Sections 15(a) and 15(c) of the Exchange Act and Rules 15c1-2 thereunder, the broker-dealer registration and antifraud provisions. The Complaint seeks the entry of orders of permanent injunction against the Defendants, as well as disgorgement of their ill-gotten gains, plus prejudgment interest, and civil penalties.