SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 16963 / April 16, 2001
SEC v. ERIC E. RESTEINER, ET AL., Civil Action No. 01-10637 (PBS) (D. Mass.) (U.S. District Court for the District of Massachusetts - Filed April 16, 2001)
SEC FILES EMERGENCY ENFORCEMENT ACTION TO HALT FRAUDULENT TRADING SCHEME THAT TARGETED MANY CHRISTIAN SCIENTISTS.
The Securities and Exchange Commission announced today that it filed an emergency civil fraud action against four individuals and two Massachusetts-based companies involved in a fraudulent trading scheme that raised approximately $22 million from at least 50 investors, many of whom were members of the Christian Science Church. The Commission has asked the court to enter an immediate temporary restraining order against Voldemar A. VonStrasdas of Nassau, the Bahamas, Charles G. Dyer of Manchester, Massachusetts, and two Danvers, Massachusetts-based companies controlled by Dyer, Resource F, LLC and Bunker Hill Aviation, LLC, to prohibit them from engaging in further fraudulent activity or continuing to accept or deposit additional investor funds. The Commission's complaint also charges two other individuals, Eric E. Resteiner, most recently of Nassau, the Bahamas, and Miles M. Harbur of Jupiter, Florida, for their participation in the fraudulent trading scheme, and seeks to immediately freeze the assets of all the Defendants.
According to the complaint, the Defendants fraudulently offered and sold securities in an international bank-related financial instrument trading program that was completely fictitious. The Defendants promoted their trading program under various names, including Swiss Asset Management, Wall Street South, and Resource F. The Commission alleged that Resteiner, Harbur, VonStrasdas, and Dyer solicited investors using misrepresentations typical of "Prime Bank"-type investment frauds, including that the investment involved high-quality debt instruments of very large international banks, that the investors' principal was never at risk and could be returned after one year, and that investors would receive profits of approximately 4-5% every month (or 48-60% annually). The Commission further alleged that Dyer and Resource F funneled investor funds to bank accounts in the Bahamas controlled by one or more of the Defendants, and Bunker Hill Aviation received payments for administering the investment scheme. In addition, the Commission alleged that Dyer misappropriated at least $795,000 of investor funds, and used those funds to, among other things, buy a golf course in Georgia, finance the purchase of an airplane by one of his creditors, and purchase an interest in a restaurant in Boston, Massachusetts.
During the initial stages of the fraud, investors received monthly payments that the Defendants represented were "profits" on their investment. However, monthly payments to Resource F investors ceased around May 2000. To date, although requested, no investors are known to have received the return of their investment, as promised by the Defendants. Furthermore, since the cessation of monthly payments, VonStrasdas has regularly sent lulling letters to investors making excuses for the cessation of payments, and making the falsestatements that he expected trading and monthly payments to investors to resume soon. More recently, VonStrasdas and Dyer have each solicited investors to contribute money to purported legal efforts to obtain the return of investors' funds.
According to the complaint, Resteiner, Harbur, VonStrasdas, Dyer, Resource F, and Bunker Hill Aviation, variously, violated the antifraud, securities registration, and broker registration provisions of the federal securities laws, including Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933, and Sections 10(b) and 15(a) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The Commission seeks a temporary restraining order against Defendants VonStrasdas, Dyer, Resource F, and Bunker Hill Aviation, to prohibit them from engaging in further fraudulent activity or continuing to accept or deposit additional investor funds. The Commission further seeks to freeze assets of each of the Defendants to ensure that they will be preserved to pay investors their lost principal, to enjoin each of the Defendants from continuing to violate relevant provisions of the federal securities laws, repatriation of investor funds funneled to foreign bank accounts, disgorgement of monies fraudulently received by the Defendants, plus prejudgment interest, and civil monetary penalties from each of the Defendants.