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U.S. Securities and Exchange Commission


LITIGATION RELEASE NO. 19420 / October 6, 2005

Securities And Exchange Commission V. W.L. Ware Enterprises, Inc., et al. and Warren L. Ware, Case No. 6:04 CV-112 ORL-18-JGG (M.D. Fla.)(filed January 27, 2004)


The Securities and Exchange Commission (SEC) announced that on August 8, 2005 Warren L. Ware, a defendant in a $16.5 million offering fraud that the SEC halted in January 2004, was sentenced to incarceration for period of 14 years and seven months, followed by three years of supervised release, based upon his guilty plea to charges of mail fraud, money laundering and obstruction of justice brought by the United States Attorney's Office for the Southern District of Florida (USAO). In addition, the Court also ordered Ware to pay $11.6 million in restitution to victims of the scheme.

Ware's sentence was based on criminal charges arising primarily from the same misconduct that led to the SEC's action. According to an Information filed by the USAO, from approximately 2001 to January 2004, Ware, as president and chief investment officer of W.L. Ware Enterprises and Investments, Inc., doing business as Ware Enterprises and Investments, Inc. (Ware Enterprises), solicited investors to invest in Ware Enterprises' Dreamkeeper Program. According to the Information, Ware induced investors to invest through the use of materially false and fraudulent pretenses, representations and promises, some of which are described below.

  • Ware falsely guaranteed investors 10% monthly returns on their investment for the first ten months.
  • Ware falsely represented that after the first ten months of investment, investors would receive non-guaranteed payments of 5% monthly.
  • Ware falsely represented that investors' monies were being invested in, among other things, commercial and residential real estate, small businesses, and public stock offerings. In reality, Ware invested only a small percentage of investor funds, and used the remaining monies for his own personal use and to conduct a typical Ponzi scheme by using new investors' monies to pay purported returns or interest to existing or earlier investors.

According to the Information, Ware committed mail fraud by mailing information to investors in furtherance of the fraudulent scheme describe above, laundered money, and obstructed justice by providing false and misleading information to the SEC in connection with the SEC's investigation into Ware and Ware Enterprises.

The SEC filed its emergency civil action against Ware and Ware Enterprises on January 27, 2004. On that same day, the Honorable G. Kendall Sharp, U.S. District Judge for the Middle District of Florida, issued various emergency orders including temporary restraining orders and asset freezes. On the SEC's motion, Judge Sharp also appointed Michael Goldberg, Esq. as Receiver over Ware Enterprises. The SEC's complaint charges Ware and Ware Enterprises with violating the antifraud provisions of the Securities Act of 1933 (Securities Act) and the Securities Exchange Act of 1934 (Exchange Act) and the securities registration provisions of the Securities Act, and Ware with violating the antifraud provisions of the Investment Advisers Act of 1940 (Advisers Act).

Ware consented to a Judgment of Permanent Injunction and Other Relief (Judgment) in the SEC's case, without admitting or denying the allegations in the SEC's complaint. The Judgment, which was entered on May 14, 2004, enjoins Ware from violations of Sections 5(a), 5(c) and 17(a) of the Securities Act, Section 10(b) of the Exchange Act and Rule 10b-5 thereunder, and Sections 206(1) and 206(2) of the Advisers Act. In addition to injunctive relief, the Judgment provides for disgorgement and the imposition of a civil penalty in amounts to be reached by agreement of the parties and/or by the Court upon the SEC's motion.

The SEC appreciates the efforts of the United States Attorney's Office for the Southern District of Florida in this matter.

For further information, see Litigation Release No. 18557 (January 29, 2004) and Litigation Release No. 18813 (July 29, 2004).


Modified: 10/07/2005