U.S. Securities and Exchange Commission
Litigation Release No. 18098 / April 23, 2003
SEC v. Jamie P. Piromalli, et al., Civil Action No. C-2-00 622, (S.D. Ohio 2000).
The Securities and Exchange Commission announced today that, on April 11, the United States District Court for the Middle District of Florida-Tampa Division sentenced Jamie P. Piromalli (Piromalli) of Maitland, Florida, to three and one-half years in prison for his role in the World Vision Entertainment, Inc. (World Vision) promissory note Ponzi scheme. The Court also ordered Piromalli to pay over $24 million in restitution.
Previously, on July 30, 2002, Piromalli pled guilty to one count of conspiracy to commit securities fraud.
Piromalli and four additional World Vision principals (Defendants) were the subjects of a civil injunctive action, SEC v. Piromalli, et al., filed by the SEC on June 1, 2000 in the United States District Court for the Southern District of Ohio. The SEC's Complaint alleged that the Defendants offered and sold securities in the form of nine-month promissory notes through a nationwide sales network and made numerous false and misleading statements to investors about the World Vision notes. Specifically, the Defendants misrepresented that the notes were unconditionally guaranteed and insured and that all of the proceeds of the offering would be used to develop World Vision's products. Instead, the Defendants allegedly used the proceeds of the note offering to pay for the personal and business expenses of company officers and directors, to cover interest and principal payments to investors and to pay large, undisclosed commissions to the sales network. Through World Vision, the Defendants, and others acting in concert with them, raised at least $64 million from approximately 1,200 investors in 33 states from the sale of World Vision promissory notes. As a result, when World Vision filed for bankruptcy protection in September 1999, investors lost approximately $52 million.
The SEC obtained an order of permanent injunction against Piromalli on August 27, 2001. In addition, on January 22, 2002, Piromalli was ordered to pay $5,218,531.61 in disgorgement and prejudgment interest and an $110,000 civil penalty. The SEC is currently seeking to enforce its judgments against Piromalli.
For additional information, see Litigation Release No. 16577 (June 1, 2000), Litigation Release No. 17188 (October 15, 2001), Litigation Release No. 17413 (March 14, 2002), Litigation Release No. 17431 (March 22, 2002), and Litigation Release No. 17773 (October 7, 2002).