UNITED STATES V. GARY VAN WAEYENBERGHE, Case No. 3:04CR0087AS (N.D. Ind.)
SECURITIES AND EXCHANGE COMMISSION V. GARY VAN WAEYENBERGHE ET AL., Case No. 3:00CV0446RM (N.D. Ind.)
The Securities and Exchange Commission (Commission) announced that on September 9, 2004, Gary Van Waeyenberghe of South Bend, Indiana was criminally indicted on conspiracy, mail fraud, wire fraud and money laundering charges by a federal grand jury convened by the United States Attorney for the Northern District of Indiana in connection with misconduct while he was President and Chief Operating Officer of First Choice Management Services (First Choice). The Commission charged Van Waeyenberghe with violations of the federal securities laws based on related conduct in July 2000.
According to the indictment, Van Waeyenberghe was the President and Chief Operating Officer of First Choice, which marketed and serviced finance receivables in the form of Enhanced Automobile Receivables (EARs) and Realty First Mortgages (RFMs). The indictment alleges that from November 1999 through July 2000, Van Waeyenberghe used promotional materials that contained materially false and misleading statements to induce prospective clients to purchase receivables through First Choice's EAR and RFM programs and attempted to lull clients into refraining from seeking the return of their money by sending false account activity statements. The indictment further alleges that Van Waeyenberghe defrauded over 600 clients of over $24 million.
The Commission brought its civil action against First Choice and Van Waeyenberghe based on related conduct on July 26, 2000. Shortly after the filing of the Commission's Complaint, the Court issued a Temporary Restraining Order and subsequently a Preliminary Injunction freezing First Choice's and Van Waeyenberghe's assets and appointed a receiver to manage First Choice's assets during the pendency of the litigation. On January 8, 2003, by consent, the Court permanently enjoined First Choice and Van Waeyenberghe from future violations of the antifraud and securities registration provisions of the federal securities laws, ordered First Choice and Van Waeyenberghe jointly and severally to pay $31.3 million in disgorgement and prejudgment interest and imposed a $110,000 civil penalty on Van Waeyenberghe. On the same day, the Court entered an Order Liquidating First Choice which required the court-appointed receiver for First Choice to liquidate First Choice's remaining assets in order to satisfy, at least in part, First Choice's disgorgement obligation.
For additional information, see Litigation Release No. 16635 (July 27, 2000) and 17931 (January 14, 2003).