UNITED STATES SECURITIES AND EXCHANGE COMMISSION
LITIGATION RELEASE NO.16688/ September 6, 2000
SECURITIES AND EXCHANGE COMMISSION v. LEE E. GAHR AND CHILL TECH INDUSTRIES, INC., Civ. No. CV-S-00-1088-KJD-RJJ (USDC Nevada)
The Securities and Exchange Commission announced today that it filed a federal court action against Chill Tech Industries, Inc. ("Chill Tech"), a Nevada corporation, and its chief operating officer, Lee E. Gahr ("Gahr"), a Vancouver, British Columbia resident. The Commission's complaint alleges that between September 1998 and May 2000, Chill Tech and Gahr made numerous false and misleading statements through the company's Internet website (www.chilltech.com), various press releases, phony unsolicited faxes, and a magazine article. According to the complaint, these statements concerned: (1) the "environmentally friendly" nature of, purported testing, and Chill Tech's ability to manufacture, the "Arctic Can," purportedly a self-cooling beverage can; (2) supposed sales presentations of the Arctic Can to various well-known companies and governmental entities and related revenue and earnings projections; (3) financial and stock projections, and predictions of future listing of Chill Tech's common stock on the Nasdaq Stock Market, Inc. ("Nasdaq"); and (4) Chill Tech's receipt of financing commitments and agreements to acquire substantial assets. This information was false and misleading because the Arctic Can contained Freon, an environmentally banned substance, Chill Tech neither tested nor had the ability to manufacture the Arctic Can; the company's sales "presentations" at best consisted of unsolicited correspondence. The financial projections lacked a reasonable basis because, among other reasons, they were predicated on fictitious business relations and undermined by Chill Tech's developmental stage status, lack of a viable product, and lack of significant assets or revenues. Further, Gahr sold his personal holdings of Chill Tech common stock into the resulting inflated market for profits of at least $278,738. This action is part of the fourth nationwide Internet fraud sweep conducted by the Commission since October 1998.
The Commission's complaint charges that Gahr and Chill Tech violated Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The Commission further alleges that Gahr also violated Sections 17(a)(1), 17(a)(2), 17(a)(3), 5(a) and 5(c) of the Securities Act of 1934. The Commission seeks disgorgement and civil penalties against Gahr and permanent injunctions against both Gahr and Chill Tech.
For tips on how to avoid Internet "pump-and-dump" stock manipulation schemes, visit http://www.sec.gov/consumer/iemmtips.htm . For more information about Internet fraud, visit http://www.sec.gov/enforce/intrela.htm . To report suspicious activity involving possible Internet fraud, visit http://www.sec.gov/enforce/comctr.htm . For a description of other SEC enforcement actions involved in this Internet Market Manipulation Sweep, visit http://www.sec.gov/news/extra/intmm.htm .