U.S. Securities and Exchange Commission
Litigation Release No. 18397 / October 7, 2003
Securities and Exchange Commission v. K.C. Smith, Civil Action No. 2:03-CV-173 (E.D. Tenn.) (May 12, 2003)
United States v. K. C. Smith, (E.D. Tenn.)(June 30, 2003)
Spammer Sued by SEC Sentenced to 14 Months
The Securities and Exchange Commission announced today that on October 6, 2003, K. C. Smith was sentenced to 14 months imprisonment and three years supervised release and was ordered to pay $75,230 in restitution. On July 2, 2003, in factual summaries submitted to the court, Smith admitted to conducting two fraudulent investment schemes through websites and spam email during 2002.
On May 12, 2003, the SEC charged Smith with fraudulently raising $102,554 by falsely guaranteeing double-digit monthly returns on two websites and in approximately nine million spam e-mail messages. Without admitting or denying the allegations made by the Commission, Smith consented to an order requiring him to pay $107,510 in disgorgement and pre-judgment interest and enjoining him from violating Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder.
The criminal case was prosecuted by the U.S. Attorney's offices for the Eastern District of Tennessee and the Eastern District of Virginia. Additional information can be found in Litigation Releases No. 18130 and 18208.