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U.S. Securities and Exchange Commission


Litigation Release No. 17235 / November 15, 2001

Securities and Exchange Commission v. Mustang Development Corporation, Tower Operating Company, Neal B. Stein, Cary S. Greene and Samuel Embras, Jr., Civil Action No. 97-0440 JGD (CTx) (C.D. Cal.)

United States of America v. Cary S. Greene, CR 00-167-MMM (C.D. Cal.)

The United States Attorney for the Central District of California announced that on November 9, 2001, a Studio City man was sentenced on federal criminal charges arising out of a fraudulent oil and gas offering scheme. Cary S. Greene, age 40, of Studio City, California, was sentenced to 46 months for securities fraud and tax evasion following his guilty plea to the charges in May 2000.

The U.S. Attorney's Office prosecuted Greene for his participation in a fraudulent "Ponzi" scheme that offered and sold oil and gas limited partnership interests. Greene was an officer, director and part owner of Mustang, which raised about $139 million from thousands of investors nationwide. While investors were told that their funds would be used to purchase oil and gas properties, in fact, Greene: 1) commingled the assets of the partnerships; 2) operated a Ponzi scheme by using millions of dollars from new investors to pay old investors their purported "returns;" and 3) misappropriated millions of dollars from investors for personal uses.

In April 1997, Greene was permanently enjoined in a civil action by the Securities and Exchange Commission based on the same underlying conduct. See Litigation Release 15359, May 5, 1997. Greene was also barred from the securities industry in a related Commission administrative proceeding. See Administrative Proceeding File No. 3-9445, September 29, 1997.

Earlier this month, the U.S. Attorney's Office and the Commission filed criminal and civil contempt proceedings against Greene for violating the permanent injunction entered in the Commission's Mustang action. The U.S. Attorney's and Commission's court filings allege that Greene violated the Commission's civil judgment by making fraudulent statements in the offer of stock in Broadband Concepts & Technologies, Inc. Greene is presently incarcerated pending trial on the criminal contempt charges.


Modified: 11/16/2001