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U.S. Securities and Exchange Commission

U.S. Securities and Exchange Commission

Litigation Release No. 17895 /December 16, 2002


U. S. Attorney Files Criminal Charges In Connection With Fraudulent Offering Of Yes Entertainment

On December 6, 2002, the United States Attorney for the Central District of California filed criminal charges against the principals and agents of Yes Entertainment Network, Inc. for their role in an offering fraud that the Commission successfully prosecuted. The indictment charges Eugene M. Carriere, James S. Eberhart, Richard Hines and Kenneth Gottlieb with 23 counts of mail fraud and money laundering in connection with the offer and sale of more than $11 million of the securities of Yes Entertainment.

The indictment alleges that Carriere (against whom the Commission obtained a default judgment in 2000) and Eberhart, owned and operated Yes Entertainment, that Hines owned and operated Satellite Capital Group, a telemarketing company that sold investment units in Yes Entertainment, and that Gottlieb was a leading salesman at Amherst Group, another telemarketer. The indictment further alleges that the defendants knowingly made a number of fraudulent misrepresentations to investors, including the following: (1) that at least 11% of investor funds would be used to build a multimedia website, when in fact less than 1% was used for that purpose; (2) that salespersons would be paid a 12% commission from investor funds, when in fact commissions of 45% were paid; and (3) that an IPO of Yes Entertainment stock would take place no later than the first quarter of 2000, when in fact the company was in no financial position to undertake an IPO and did not do so.

Carriere and Eberhart are alleged to have transferred several million dollars of investor funds to overseas bank accounts in Hong Kong and Singapore. These overseas accounts were in the names of companies that Carriere and Eberhart had created when they created Yes Entertainment and commenced their fraudulent scheme in February 1999.

The indictment charges the defendants with mail fraud. Carriere, Eberhart and Hines are also charged with promotional money laundering, and Carriere and Eberhart are charged with international money laundering as well.

In its civil action arising from the same set of facts, the Commission charged Yes Entertainment, Carriere and others with violations of the registration and antifraud provisions of the federal securities laws. The Commission froze more than $602,000 of investor monies in the accounts of Yes Entertainment. Richard Weissman was appointed Distribution Agent over the frozen monies. A hearing on Mr. Weissman's proposed plan for distribution of those monies is scheduled for January 6, 2003.



Modified: 12/17/2002