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U.S. Securities and Exchange Commission


LITIGATION RELEASE NO. 16902 / February 16, 2001

SECURITIES AND EXCHANGE COMMISSION v. Advance Local Development Corp., et. al., CV01-0897 (E.D. N.Y.)

The Commission yesterday filed an action in federal court and obtained an emergency asset freeze against Advance Local Development (Advance) and three of its officers for operating a prime bank fraud. The complaint alleges that from February 1999 through April 2000 Advance raised $16.5 million from investors by promising annualized rates of return as high as 2,600 percent per year, with no risk to capital. According to the complaint, Advance represented that investor funds would be placed into a federally approved "bank to bank" trading program with Advance's share of the profits used to promote humanitarian efforts. The complaint alleged that investor funds were never placed into a trading program, as no such program exists. Instead, investor funds were used to make undisclosed payments to the proposed defendants, placed in a brokerage account where they financed unsuccessful day trading activities, and for Ponzi payments to investors.

Judge John Gleeson in the United States District Court for the Eastern District of New York ordered that Advance's assets be frozen to protect funds for the benefit of investors pending determination of the matter on the merits. The complaint named as defendants Advance and its officers, Edmund Burton of Brooklyn, New York, and Thomas Wescott, and Ralph Odom both of Las Vegas, Nevada. The Commission alleged that Advance, Burton, Wescott, and Odom violated Section 10(b) and Rule 10b-5 of the Securities Exchange Act of 1934 and Section 5(a), 5(c), and 17(a) of the Securities Act of 1933. In addition to the emergency relief granted by the Court, the action seeks preliminary and permanent injunctions, disgorgement plus prejudgment interest, and civil penalties. The complaint also seeks an accounting of investor funds and the appointment of a special officer to preserve assets and repay investors.