U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 19405 / September 29, 2005
Accounting and Auditing Enforcement
Release No. 2324 / September 29, 2005
Securities and Exchange Commission v. LeeRoy Allen, Jr., Civil Action No. 1:05CV01919 (D.D.C.) (September 29, 2005)
SEC CHARGES LEEROY ALLEN, JR., FORMER CEO OF INTERNATIONAL BIOFUEL AND BIOCHEMICAL CORPORATION, WITH SECURITIES FRAUD
On September 29, 2005, the Securities and Exchange Commission ("Commission") filed a civil injunctive action in the United States District Court for the District of Columbia against LeeRoy Allen, Jr. ("Allen"), the former chairman, chief executive officer and president of International Biofuel and Biochemical Corporation ("IBBC").
The Complaint alleges that from December 2002, through August 30, 2004, Allen made numerous materially false and misleading statements in filings IBBC made with the Commission which created the illusion that IBBC was a viable business that would use cutting edge technology to produce, distribute and market biodiesel fuel (also known as biofuel). In reality, IBBC never produced, distributed or marketed any biofuel. As Allen knew, IBBC was nothing more than a startup company with no assets, funding or viable product.
In its Complaint, the Commission seeks a final judgment permanently enjoining Allen from violating Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 ("Exchange Act") and Exchange Act Rules 10b-5 and 13a-14. The Commission also seeks an order: that Allen disgorge all ill-gotten gains he received by virtue of his misconduct, with prejudgment interest; that Allen pay civil penalties; barring Allen from acting as an officer or director of a public company; and barring Allen from any future participation in the offering of any penny stock.
In a related matter, the Commission issued an administrative order against IBBC finding that it failed to comply with, and committed violations of, Sections 10(b), 13(a), 13(b)(2)(A) and 13(b)(2)(B) of the Exchange Act and Exchange Act Rules 10b-5, 13a-1 and 13a-13, by failing to file required periodic reports with the Commission, making materially false and misleading statements in Commission filings, failing to file audited financial statements in its 2002 annual report, and failing to make and keep books and records and maintain internal controls in 2002. The order revokes the registration of IBBC's common stock and orders that IBBC cease and desist from committing or causing any violation, and any future violations, of Sections 10(b), 13(a), 13(b)(2)(A) and 13(b)(2)(B) of the Exchange Act and Exchange Act Rules 10b-5, 13a-1 and 13a-13. IBBC consented to entry of the order without admitting or denying any of the findings in the order. In the Matter of International Biofuel and Biochemical Corporation, Admin. Proc. File No. 34-52525 (September 29, 2005).
