U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 19384 / September 20, 2005
SECURITIES AND EXCHANGE COMMISSION v. LEARN WATERHOUSE, INC.; RANDALL TREADWELL; RICK D. SLUDER; LARRY C. SATURDAY; AND ARNULFO M. ACOSTA, Civil Action No. 04-CV-2037W (LSP) (S.D.Cal.)
FOUR DEFENDANTS NAMED IN SEC ACTION INDICTED BY A FEDERAL GRAND JURY
The Securities and Exchange Commission announced that on September 8, 2005, a federal grand jury in San Diego indicted Randall T. Treadwell of Savannah, Georgia, Ricky D. Sluder of Whitehouse, Texas, Larry C. Saturday of Savannah, Georgia, and Arnulfo M. Acosta of Hildago County, Texas, for their participation in a scheme to solicit money from members of the public, ostensibly for participation in high-yield trading programs and venture capital investments. The indictment charges each defendant with wire fraud and conspiracy.
According to the indictment, the defendants used companies named Learn Waterhouse, Inc., a Texas corporation, Wealth Builders Club, Inc. and Qwest International, Inc., both Nevada corporations, to fraudulently solicit over $50 million from members of the public. The indictment alleges that the defendants induced people to invest by falsely representing and causing others to represent that investors’ money would be used for investments that would generate returns ranging from 2% to 50% per month or more. The indictment further alleges that only a small fraction of the over $50 million raised was ever placed in any investments, and those investments generated almost no returns. Instead, the defendants used money received from new investors to make payments to earlier investors. The indictment alleges that the defendants converted millions of dollars of investors’ funds to their own personal use.
The indictment follows the Commission’s complaint filed in federal court in San Diego on October 12, 2004 against Treadwell, Sluder, Saturday, Acosta, and Learn Waterhouse alleging that they had raised millions from 1700 investors in a nationwide Ponzi scheme. On November 1, 2004, Thomas Lennon was appointed as the permanent receiver over Learn Waterhouse, and given authority over all of its assets. The court also ordered the defendants to repatriate all assets from abroad, and issued a preliminary injunction prohibiting all of the defendants from future violations of the antifraud and registration provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934.
On February 23, 2005, the court issued an order finding Treadwell to be in civil contempt for violating prior orders of the court by (1) failing to provide an accounting and other financial information to the Commission, (2) failing to cooperate with the court-appointed receiver, (3) withdrawing money from a bank account that was subject to the court’s orders that froze all of the defendants’ assets, (4) offering and selling new securities under the guise of a legal defense fund, and (5) continuing to make false representations regarding Learn Waterhouse and the securities that it had sold. The court’s contempt order found that Treadwell violated the court’s preliminary injunction order of November 1, 2004, as well as the temporary restraining order of October 12, 2004.
In addition to the relief already obtained, the Commission seeks permanent injunctions, disgorgement and civil penalties from all of the defendants.