SECURITIES AND EXCHANGE COMMISSION
LITIGATION RELEASE NO. 17007 / May 16, 2001
SECURITIES AND EXCHANGE COMMISSION V. PAUL SHINGLEDECKER (United States District Court for the Western District of Michigan, 5:01-CV-283)
The Commission announced today the filing and simultaneous settlement of a civil fraud action in the United States District Court for the Western District of Michigan against Paul Shingeldecker of Marcellus, Michigan for his participation in a widespread fraudulent "prime bank" scheme known as The Gateway Association. The Commission's complaint alleges that from approximately November 1997 and continuing through about December 1998, Shingeldecker solicited investors to invest in an alleged overseas bank debenture trading program involving medium-term bank debentures. Shingledecker participated in several meetings in the Michigan area, and at least one meeting in the Minnesota area, where he described to investors a 1,250% rate of return on a ten-month investment. Shingledecker detailed a payout schedule promising a ten percent compounded monthly return on a $100,000 investment, with a $759,768 balloon payment at the end of the ten months. Shingledecker directed investors to either send their checks to the Gateway office or to wire their funds directly to one of several bank accounts. Shingledecker offered and sold these non-existent securities to at least eleven investors and raised over $500,000 for Gateway. Shingledecker, through his insurance company, received approximately $140,000 in funds from Gateway.
Without admitting or denying the allegations in the complaint, Shingledecker consented to the entry of an Order that: (1) enjoins him from violating Sections 5(a), 5(c) and 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder; (2) orders him to pay disgorgement in the amount of $140,000 plus prejudgment interest of $25,148.86; and (3) waives disgorgement in excess of $25,000 and does not impose a civil penalty based upon Shingledecker's sworn statements demonstrating his inability to pay.