U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 18963 / November 8, 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 BENNY G. MORRIS IN $28 MILLION PONZI SCHEME CASE
The Securities and Exchange Commission (Commission) announced that on September 29, 2004 the Honorable Larry J. McKinney, Chief Judge, U.S. District Court for the Southern District of Indiana, entered a final judgment against Benny G. Morris (Morris), which: (1) orders Morris to pay, jointly and severally with defendant Universal Financial Leasing, Inc., disgorgement in the amount of $1,578,438 and prejudgment interest in the amount of $75,054; (2) orders Morris to pay a civil penalty in the amount of $120,000; and, (3) permanently enjoins Morris from future violations of Sections 5 and 17(a) of the Securities Act of 1933, Sections 10(b) and 15(a) of the Securities Exchange Act of 1934, and Rule 10b-5 thereunder. Morris consented to the entry of the final judgment without admitting or denying the allegations contained in the Commission's complaint.
The Commission's complaint, filed on November 10, 2003, alleged that Morris, and eleven 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. Shortly after the filing of the Commission's complaint, the Court issued a temporary restraining order and subsequently, a preliminary injunction order freezing the Defendants' assets and prohibiting the Defendants from violating the antifraud and registration provisions of the federal securities laws.
During the course of this action, Chief Judge McKinney has entered final judgments against Defendants Lee E. Larscheid (Larscheid), Ozark Ticket and Travel, Inc. (Ozark Ticket), Branson City Limits, Inc. (Branson City Limits), and Resort Hotels, Inc. (Resort Hotels) which: (1) ordered 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) ordered Larscheid and Ozark Ticket to each pay civil penalties in the amount of $120,000; (3) ordered Branson City Limits and Resort Hotels to pay, jointly and severally, disgorgement in the amount of $28,976,522.74 and prejudgment interest in the amount of $1,376,858.02; and (4) enjoined Larscheid, Ozark Ticket, Branson City Limits, and Resort Hotels from future violations of Sections 5 and 17(a) of the Securities Act, Section 10(b) of the Exchange Act, and Rule 10b-5 thereunder.
This case is still pending against the remaining Defendants.
For additional information, see Litigation Release No. 18450 (November 10, 2003), Litigation Release No. 18476 (November 20, 2003), Litigation Release No. 18637 (March 25, 2004), Litigation Release No. 18650 (March 31, 2004).