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U.S. Securities and Exchange Commission


LITIGATION RELEASE NO. 17731 / September 17, 2002

SECURITIES AND EXCHANGE COMMISSION v. Ronald K. Randolph, individually and dba International Polymers Works, Case No. 1:01-CV-00621, USDC, EDTX (Beaumont Division)

On August 6, 2002, Judge Thad Heartfield, United States District Judge for the Eastern District of Texas, sentenced Ronald K. Randolph to a term of 34 months in connection with an affinity investment scheme that exclusively targeted African-American, Baptist investors, many of whom were elderly and disabled. In addition, the Court ordered Randolph to pay $1,983,910.76 in restitution to the victims of the fraud and to surrender himself to the Federal Bureau of Prisons on September 16, 2002.

Previously, in a related civil action, Judge Heartfield granted the Commission's request for a judgment by default against Randolph, individually and doing business as International Polymers Works ("IPW"). Judge Heartfield's order permanently enjoined Randolph from future violations of the antifraud and securities registration provisions of the federal securities laws and directed Randolph to pay $884,772 in disgorgement representing his gains from the conduct alleged in the Complaint, pre-judgment interest thereon in the amount of $94,608, and a civil penalty of $884,772.

In its civil Complaint, the Commission alleged that Randolph, a 48-year-old resident of Beaumont, Texas and a Baptist minister, sold securities in IPW promising returns between 7-30%. His scheme raised $3.5 million from 155 investors in several states from late 1997 through at least November 2000. In connection with these sales, Randolph made false and misleading statements to investors regarding IPW's business prospects, the risks and returns associated with the investment, and the use of investor funds. In reality, IPW had minimal business operations and Randolph simply used investor monies to make "Ponzi" payments to prior investors and to pay personal expenses.

As a result of his alleged misconduct, the Commission's Complaint charged the defendant with violating Sections 5(a), 5(c) and 17(a) and (b) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934, and the Commission's Rule 10b-5.



Modified: 09/18/2002