U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 19145 / March 18, 2005
Securities and Exchange Commission v. ATM Alliance Corp., ATM Management Services Corp.,and Michael Gilot, (U.S.D.C., Western District of Texas, Austin Division, Civil Action No. A-05-CA-190-LY )
SEC Obtains TRO to Halt Fraudulent ATM Offering
On March 17, 2005, the Securities and Exchange Commission filed an emergency action in United States District Court in Austin, Texas, to halt a fraudulent investment scheme and freeze assets for the benefit of investors. The Commission charged ATM Alliance Corp. ("ATM Alliance"), ATM Management Services Corp. ("ATM Management"), and Michael Gilot ("Gilot"), who allegedly controls both ATM companies, with securities fraud in connection with an unregistered interstate securities offering involving automated teller machines ("ATMs"). The Complaint alleges that at least $1 million has been raised from several hundred investors nationwide. The Commission also named Veritas Unlimited, LLC, as a Relief Defendant claiming that Veritas received at leat $640,000 of investors' funds. At the request of the Commission, U.S. District Judge Lee Yeakel entered a temporary restraining order halting the offering, freezing the defendants' and relief defendant's assets, and prohibiting the destruction and removal of records.
Named as defendants are:
According to the Complaint, the defendants are soliciting investors through an aggressive marketing campaign in which investors are offered a purported turnkey ATM investment in which they can expect annual returns of between 30 and 100 percent. In addition, investors are allegedly told that ATM Alliance has secured highly sought after locations, such as Las Vegas casinos and Citgo convenience stores in which to place ATM machines.
The Commission contends that these and other claims are false and misleading in that ATM Alliance has not placed ATMs in the locations promised to investors and investors are not receiving their promised returns; many have received nothing at all. The Complaint further alleges that the defendants are using a fictitious contract to convince investors that ATM Alliance had secured rights to place ATMs at a major Las Vegas casino.
The Commission's Complaint charges the defendants with violating Sections 5(a), 5(c) and 17(a) of the Securities Act of 1933, and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. In its action, the Commission seeks preliminary and permanent injunctions, accountings, disgorgement of investor funds unjustly received, civil money penalties and the appointment of a receiver.