U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 18951 / October 29, 2004
SEC v. America's Hedge Fund, L.P., et al., 04 Civ. 4640 (NG) (E.D.N.Y.)
SEC OBTAINS ORDER HALTING SECURITIES OFFERING FRAUD BY CHRISTIAN KURETSKI, AMERICA'S HEDGE FUND, L.P. AND WORLDWIDE PARTNERS, LLC
The Commission announced today that it filed an emergency enforcement action yesterday against Defendants Christian Kuretski, America's Hedge Fund, L.P. ("AHF") and AHF's general partner, Worldwide Partners, LLC ("Worldwide"). The Commission also charged CK Holdings Incorporated, Kathleen Kuretski and Peter Kuretski as Relief Defendants.
The complaint alleges that since 2001 to the present, the Defendants raised at least $1.6 million from approximately 60 investors by fraudulently offering and selling investments in AHF, Worldwide and various penny stocks. The Commission alleges that Kuretski materially misrepresented the nature, liquidity, risks and expected return of the investments. According to the Commission's complaint, Kuretski told investors, among other things, that (i) their principal investment was guaranteed, (ii) they were investing in a "basket of various stocks" with risk-free annual returns of at least 12%, and (iii) they could withdraw funds from their investment. In reality, Kuretski misappropriated investors' funds through cash withdrawals, personal expenses, and by financing unrelated businesses, while continually refusing to distribute or refund investors' funds. The brokerage and bank records for AHF and Worldwide demonstrate that the vast majority of investors' funds were dissipated by Kuretski. In addition, Kuretski was selling these securities without association with any broker-dealer.
The complaint charges the defendants with violating Sections 5(a), 5(c) and 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 (the "Exchange Act") and Rule 10b-5 thereunder. The complaint further charges Kuretski with violating Section 15(a) of the Exchange Act, and charges Kuretski and Worldwide with violating Sections 206(1) and 206(2) of the Investment Advisers Act.
Upon the Commission's application, the Honorable Nina Gershon, United States District Judge for the Eastern District of New York, granted the Commission's application for a temporary restraining order and froze certain assets of the Defendants and Relief Defendants. The Court's order provided that the temporary restraining order and asset freeze would remain in effect until November 9, 2004 at 2:00 p.m., at which time the Court scheduled a hearing on the Commission's motion for a preliminary injunction. In addition to the interim relief already granted by the Court, the Commission seeks a final judgment against the defendants enjoining them from future violations of the foregoing antifraud and securities registration laws, ordering them to disgorge ill-gotten gains, assessing civil penalties and enjoining Kuretski from participating in any penny stock offerings.
The Commission acknowledges the assistance of the Federal Bureau of Investigation and the U.S. Attorney's Office for the Eastern District of New York.