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U.S. Securities and Exchange Commission


Litigation Release No. 18965 / November 9, 2004

SEC v. Koji Goto, Civ. A. No. 03-490-JD (D.N.H.).

Commission Files Civil Contempt Charges Against New Hampshire Resident for Violating Asset Freeze

The Commission announced that on November 2, 2004, it filed a motion with the federal district court in New Hampshire seeking entry of a civil contempt order against defendant Koji Goto for violating a court-imposed asset freeze entered in the Commission's enforcement action against Goto. The Commission's contempt motion alleges that Goto violated the asset freeze order and a subsequent modification of the asset freeze by filing a voluntary petition for bankruptcy under Chapter 11 of the Bankruptcy Code.

The Commission's complaint, filed on November 14, 2003, alleges that Goto misappropriated more than $5 million of investor funds by falsely stating that the money would be invested in a Boston-based hedge fund and in a food services business. Instead of investing the funds in the businesses he purported to represent, Goto diverted investor funds to his own bank accounts for his own personal gain.

In its contempt motion, the Commission alleges that the asset freeze order and a subsequent modification of the asset freeze order, which subject all of Goto's assets to the jurisdiction of the federal district court, prohibited Goto from seeking protection of his assets in bankruptcy court. Defendant Goto's assets have been frozen since November 14, 2003, when the Court entered a temporary restraining order and asset freeze against Goto and his wife, a relief defendant in the Commission's action. On December 3, 2003, the court entered a preliminary injunction and asset freeze against Goto and his wife. The asset freeze was modified by the court on September 13, 2004 to allow two creditors to conduct a foreclosure sale of Goto's house.

In a related criminal action, on September 27, 2004, Goto was found guilty by a jury in New Hampshire Superior Court, Hillsborough County, North, on 23 counts of theft by deception, theft by misapplication, and unlawful securities practice. The case was prosecuted by the New Hampshire Attorney General. Goto's sentencing is scheduled for December 9, 2004.

For more information see Litigation Release Nos. 18490 (December 4, 2003) and 18456 (November 14, 2003).


Modified: 11/10/2004