U.S. Securities and Exchange Commission
Litigation Release No. 18637 / March 25, 2004
Securities and Exchange Commission v. Patrick Ballinger, Dennis R. Weaver, Kosta S. Kovachev, Lee E. Larscheid, Benny G. Morris, Darin W. Roberts, Linda M. Sears, Todd F. Walker, Branson City Limits, Inc., Resort Hotels, Inc., Universal Financial Leasing, Inc., and Ozark Ticket and Travel, Inc., No. 1:03-cv-1659-LJM-WTL (S.D. Ind. Nov. 10, 2003)
SEC OBTAINS FINAL JUDGMENT AGAINST LEE E. LARSCHEID AND OZARK TICKET AND TRAVEL, INC. IN $28 MILLION PONZI SCHEME CASE
The Securities and Exchange Commission (Commission) announced that on March 23, 2004 the Honorable Larry J. McKinney, Chief Judge, U.S. District Court for the Southern District of Indiana, entered a final judgment against Lee E. Larscheid (Larscheid) and Ozark Ticket and Travel, Inc. (Ozark Ticket), which: (1) orders Larscheid and Ozark Ticket to pay, jointly and severally, disgorgement in the amount of $1,792,369.50 and prejudgment interest in the amount of $22,550; (2) orders Larscheid and Ozark Ticket to each pay civil penalties in the amount of $120,000; and, (3) permanently enjoins Larscheid and Ozark Ticket from future violations of Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934, and Rule 10b-5 thereunder. Both Larscheid and Ozark Ticket consented to the entry of the final judgment without admitting or denying the allegations contained in the Commission's November 10, 2003 complaint.
In its complaint, the Commission alleged that Larscheid, Ozark Ticket, and ten individuals and entities (the Defendants) offered and sold securities, which were nominally structured as hotel timeshare rental interests, in unregistered transactions as part of a Ponzi scheme that defrauded at least 600 investors of over $28 million in 30 states. On November 10, 2003, Chief Judge McKinney issued a temporary restraining order, which froze the Defendants' assets and temporarily restrained the Defendants from violating the antifraud and registration provisions of the federal securities laws. On November 20, 2003, the Honorable John D. Tinder, U.S. District Court for the Southern District of Indiana, issued preliminary injunctions against each of the Defendants, which continued the asset freeze ordered by Chief Judge McKinney and preliminarily enjoined the Defendants from violating the antifraud and registration provisions of the federal securities laws for the pendency of this action.
This case is still pending against the remaining Defendants.