United States Securities and Exchange Commission
Litigation Rel. No. 17713 / September 5, 2002
Commission Obtains Default Judgments Against Eric Resteiner and Voldemar VonStrasdas in Connection with $22 Million Fraudulent Trading Scheme
SEC v. Eric E. Resteiner, et al., (United States District Court for the District of Massachusetts, C.A. No. 01-10637(PBS))
The Commission announced today that, on August 19, 2002, the Massachusetts federal district court entered default judgments against Eric E. Resteiner and Voldemar A. VonStrasdas in connection with an alleged $22 million fraudulent trading scheme. The Honorable Patti B. Saris of the United States District Court for the District of Massachusetts entered final judgments ordering Resteiner and VonStrasdas, jointly and severally, to pay disgorgement plus prejudgment interest of $25,930,895.26. In addition, the Court ordered Resteiner and VonStrasdas to each pay civil penalties of $4.4 million and permanently enjoined each of them from violating the antifraud and other provisions of the federal securities laws.
The Commission's complaint against Resteiner and VonStrasdas, filed on April 16, 2001, alleged that, from 1997 through 2000, Resteiner, VonStrasdas, and others participated 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. According to the complaint, Resteiner and VonStrasdas promoted their trading scheme under various names, including Swiss Asset Management, Wall Street South, and Resource F, and 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).
Resteiner and VonStrasdas were specifically enjoined from violating Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 ("Exchange Act") and Rule 10b-5 thereunder. VonStrasdas was also permanently enjoined from violating Section 15(a) of the Exchange Act. The remaining defendants in the case are Miles M. Harbur; Charles G. Dyer; Resource F, LLC; and Bunker Hill Aviation, LLC.
Unscrupulous promoters continue to victimize the public with Prime Bank schemes. Accordingly, investors are advised to access the Commission's "Prime Bank" Investor Alert that provides tips on how to avoid being a victim of these scams. The investor alert can be found on the Commission's web site, at www.sec.gov/divisions/enforce/primebank.shtml.