Steven C. Roberts

UNITED STATES SECURITIES AND EXHANGE COMMISSION

LITIGATION RELEASE NO.16796 \ November 8, 2000

UNITED STATES v. STEVEN C. ROBERTS
U.S. District Court for the Southern District of Texas Case No 4:00-CR-140

On October 30, 2000, a judgment of conviction was entered against Steven C. Roberts. Based on Roberts' guilty plea to 7 counts of mail fraud, Judge David Hittner sentenced Roberts to 7 concurrent terms of 27 months imprisonment, ordered Roberts to make restitution of $3,373,000, imposed a 3 year special parole term at the end of Roberts' term of imprisonment and added a $100 special assessment. Roberts was one of the masterminds of a $15 million "prime bank" scheme that preyed on unsophisticated investors in Texas and elsewhere. Roberts and his co-conspirators, including Robert Cord, alias Robert F. Schoonover, Jr. (who earlier was sentenced to 60 months imprisonment and a $25,000 fine: 4:98-CR-101 in S.D. Tex.), promised investors returns of up to 30% per month purportedly guaranteed either by a major European bank or by a Caribbean-based insurer. Because there was no real investment, some investors received partial, "Ponzi" payments, and others received nothing. Much of the monies taken in by Roberts, Cord and the others were used to purchase or improve house, acquire automobiles and watercraft and support lavish life styles.

On November 13, 1998, in the United States District Court for the Northern District of Texas at Dallas the SEC obtained a temporary restraining order against Roberts, Cord and the others' fraudulent activities and obtained an asset freeze and the appointment of a receiver for those assets (SEC v. Funding Resource Group, Case No. 4:98-CA-2689). After a November 30, 1998 hearing, Judge Joe Kendall transformed the temporary restraining order into a preliminary injunction. Information derived from the TSSB and SEC investigations was used by the FBI and the United States Attorney to develop the case against Roberts. That investigation continues.