SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 17749 / September 26, 2002
SEC FILES CONTEMPT ACTION AGAINST DEFENDANT RICHARD ONORATO
SECURITIES AND EXCHANGE COMMISSION V. THE GAMING FACTORY INC., ET AL., Case No. 02-80331-CIV-MIDDLEBROOKS (S.D. Fla.)
The Securities and Exchange Commission (SEC) announced that on August 29, 2002, it filed with the United States District Court for the Southern District of Florida, a Motion for an Order to Show Cause why Defendant Richard Onorato should not be held in civil contempt for failing to comply with the Court's repatriation orders of April 15, 2002, April 29, 2002 and May 20, 2002. The Receiver joined in this motion.
On April 15, 2002, the SEC filed its Complaint against The Gaming Factory, Inc., a Panamanian corporation, The Gaming Factory, Inc., a Florida corporation, (collectively TGF), Onorato, TGF's president, and Victor Selenow, a TGF sales representative, in connection with an alleged fraudulent unregistered offering. The SEC alleged that Onorato and others had been offering and selling securities in an unregistered offering from TGF's offices located in West Palm Beach, Florida. Moreover, the complaint alleged that, unbeknownst to investors, TGF and Onorato paid its sales representatives commissions ranging from 13% to 18% of the money raised. The SEC further alleged that TGF, Onorato and Selenow, among other things, misled the public about TGF's licenses with the Panamanian government, the safety and security of the investment, and TGF's current profitability. Among other things, the SEC charged Onorato with violations of 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 and Rule 10b-5 thereunder.
On April 15, 2002, the Court granted the SEC's request for a Temporary Restraining Order (TRO), and other interim relief. The TRO provided, among other things that Onorato repatriate assets. The Court also entered an order appointing a Receiver over TGF. On April 29, 2002, the Court entered an Order of Preliminary Injunction (PI) and other Relief against Onorato, pursuant to his consent. The PI ordered Onorato to comply with the repatriation provision contained in the TRO. On May 2, 2002, the Receiver filed a Motion for Order Directing Repatriation of Assets from Onorato since Onorato had ignored the Receiver's request for assistance in repatriating TGF assets located in Costa Rica. On May 20, 2002, the Court entered an Order directing Onorato to repatriate all assets of TGF to the custody of the Receiver. To date, Onorato has not complied with the Court's repatriation orders. The motion is still pending before the Court.