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U.S. Securities and Exchange Commission


LITIGATION RELEASE NO. 16592 / June 15, 2000

Securities and Exchange Commission v. Internet Telecommunications Albany System SMR, et al., Civil Action No. 1:99CV00539 (CKK) (D.D.C.)


The Securities and Exchange Commission announced that on May 31, 2000, the Honorable Colleen Kollar-Kotelly, United States District Court Judge for the District of Columbia, granted the Commission's application for default judgments against defendants Charles D. King, Michael E. Murray, Ronald L. Tobin, Richard B. Parnell, California Financial Services, Inc. (CFS), Internet Telecommunications Albany System SMR (Albany), Internet Telecommunications Reno System SMR (Reno) and Internet Telecommunications Anchorage System SMR (Anchorage). The final judgements ordered the defendants to pay the following sums: (1) King, Murray, Tobin and CFS, jointly and severally, $582,455 disgorgement, $207,212 prejudgment interest and $582,455 penalty; (2) Parnell $43,951 disgorgement, $24,649 prejudgment interest and $43,951 penalty; (3) Albany $389,940 disgorgement, $142,630 prejudgment interest and $389,940 penalty; (4) Reno $182,365 disgorgement, $64,877 prejudgment interest and $182,365 penalty; and (5) Anchorage $59,150 disgorgement, $33,866 prejudgment interest and $59,150 penalty. The judgments against Albany, Reno and Anchorage hold King, Murray, Tobin and CFS jointly and severally liable for the respective amounts of disgorgement, interest and penalty. The Court found that the disgorgement amounts represented the amount of investor funds received by the defendants as a result of their unlawful conduct.

As alleged in the Commission's complaint, which was filed on March 2, 1999, the Court enjoined these eight defendants from violating the securities registration provisions of Sections 5(a) and (c) of the Securities Act and enjoined defendants King, Murray, Tobin and CFS from violating the antifraud provisions of Section 17(a) of the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5 in connection with the offer and sale to the public of securities designated as partnership units in Albany, Reno and Anchorage, general partnerships, formed to develop specialized mobile radio (paging) systems. Further, the Court enjoined defendant Parnell from violating the broker-dealer registration provisions of Section 15(a) of the Exchange Act. According to the complaint, King, Murray, Tobin and others, controlled defendant CFS through which they managed the fund raising and operations of the three partnerships, and disseminated sales materials that contained material misrepresentations and omissions. Parnell, and his company One Touch Marketing, Inc., among others, functioned as a broker in selling the securities without first having registered as such as required by applicable securities laws. These defendants failed to answer, plead or otherwise respond to the Commission's complaint.

See also Lit. Rel. No. 16073