LITIGATION RELEASE NO. 17814 / October 30, 2002.
United States v. Alvis Colin Smith, Criminal No. W-02-CR-00074, USDC WDTX (Waco Division)
Securities and Exchange Commission v. Great White Marine & Recreation, Inc., et al, Civil Action No. W-99-CA-230, USDC WDTX (Waco Division)
On October 18, 2002, the Honorable Walter S. Smith, Jr., United States District Judge for the Western District of Texas at Waco, sentenced Waco resident, Alvis Colin Smith, Jr., to 30 months in jail and ordered that a restitution amount be determined at a January 24, 2003 hearing. Smith had previously entered a guilty plea on May 16, 2002, to one count of securities fraud and one count of mail fraud.
The criminal information to which Smith pled guilty charged that from October, 1997 through July, 1999, Smith raised over $4.3 million from the fraudulent sale of unregistered shares in Great White Marine and Recreation, Inc. (f/k/a Tiger Shark of Texas, Inc.), a Waco-based corporation. As part of his fraudulent scheme, Smith, among other things, falsely represented Great White's business prospects, overstated its earnings and revenues and caused the corporation to pay an unwarranted stock dividend. The information also alleged that Smith fraudulently obtained a $310,000 home equity loan from San Antonio Federal Credit Union. Smith was previously convicted of bank fraud in 1987 and served five years on probation.
The criminal case arose, in part, from an earlier Commission lawsuit filed on June 29, 1999 against Smith and Great White. In the Commission action, Judge Smith permanently enjoined Smith from further violating the federal securities laws and ordered that he surrender seven vehicles, three Lake Corsicana lots, his interest in a townhouse, all securities that he owned, a $100,000 appearance bond, certain Mexican assets and $3 million in cash. When Smith failed to make the required disgorgement, Judge Smith cited him for contempt on October 11, 2001, and ordered him incarcerated until he complied with the Court's order. Smith has been incarcerated since October 11th. The Commission and a court-appointed agent have seized and liquidated assets, recovering more than $1.8 million for the benefit of investors.