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U.S. Securities and Exchange Commission


Litigation Release No. 18559 / January 30, 2004

Securities and Exchange Commission v. Alfred M. Lemcke, et al., Civil Action No. 01-547 (RRL) (D.R.I. November 16, 2001).

Court Orders the Distribution of $250,000 to Defrauded Clients of Former Money Manager Alfred Lemcke

The Commission announced that the Rhode Island federal judge overseeing SEC v. Alfred M. Lemcke, individually and d/b/a Lemcke & Associates, Civil Action No.01-CV-547(D.R.I.) has completed the distribution of assets to the victims of former investment adviser Alfred M. Lemcke. By orders dated November 19, 2003 and January 6, 2004, the Court ordered the distribution of $252,104, representing the proceeds from the sale of Lemcke's home and a bank account that was frozen by the court shortly after the Commission filed its compliant. The monies represented substantially all of Lemcke's assets.

On November 16, 2001, the Commission filed a complaint against Lemcke in the United States District Court for the District of Rhode Island. The Commission obtained a temporary restraining order and asset freeze against Lemcke. The court subsequently entered a preliminary injunction against Lemcke and continued the asset freeze. The complaint alleged that from at least December 1995 through September 2001, Lemcke defrauded at least nine of his investment advisory clients of approximately $1 million by obtained funds with false promises of investing the funds in various securities. On April 15, 2002, the court entered an order modifying the asset freeze to allow the sale of the Lemcke home, which was jointly owned by Lemcke and his former wife Rosemary Grogan-Lemcke (Grogan-Lemcke), on the condition that the proceeds from the sale be deposited with the registry of court. On September 4, 2002, the court ordered Grogan-Lemcke to pay into the registry of court the proceeds from the sale of a house. On October 30, 2002, the court permanently enjoined Lemcke and ordered him to pay $2,600 and his interest in the proceeds from the sale of the Lemcke home.

On September 24, 2002, Lemcke pled guilty to one count of fraud in violation of the Advisers Act and nine counts of wire fraud before the United District Court for the District of Massachusetts, in United States v. Alfred M. Lemcke, Criminal Indictment No. 02-10144 (DPW). The criminal indictment was based on the same facts as a civil fraud action the Commission filed against Lemcke. On September 30, 2002, Lemcke was administratively barred by the Commission from associating with any broker, dealer or investment adviser based on his guilty plea. On January 9, 2003, the federal judge in the criminal matter sentenced Lemcke to 27 months in prison followed by three years probation and ordered him to pay restitution.

For further information, see Litigation Release Nos. 17237 (November 16, 2001), 17515 (May 14, 2002), 17738 (September 23, 2002) and 17935 (January 15, 2003); Exchange Act Release No. 46574; and Advisers Act Release No. 2063.


Modified: 01/30/2004