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Litigation Release No. 19595 / March 7, 2006

Securities And Exchange Commission v. Latin American Services, Inc., et al, Case No. 99-2360-CIV-DAVIS (Southern District of Florida, Case filed August 27, 1999)

The Securities and Exchange Commission ("SEC") announced that on January 20, 2006, the Honorable Ursula Ungaro-Benages of the United States District Court for the Southern District of Florida entered a Final Judgment Setting Disgorgement, Prejudgment Interest and a Civil Penalty as to Eric V. Bartoli ("Final Judgment"). Bartoli was one four principals of Cyprus Funds, Inc. ("Cyprus Funds"), formerly an unregistered investment company incorporated in Belize, and its investment adviser, Latin American Services Co., Ltd. ("Lasco"). The Final Judgment orders Bartoli to pay disgorgement and prejudgment interest in the amounts of $19,700,000 and $29,244,388, respectively, and further orders him to pay a civil penalty in the amount of $110,000.

The SEC's Complaint in this matter alleged that from at least 1993 through August 27, 1999, the date the SEC's emergency action was filed, Bartoli and the other principals of Cyprus Funds, James L. Binge, Douglas R. Shisler, and Peter J. Esposito, raised over $80 million from investors in the United States and Latin America through the fraudulent sale of mutual fund shares and "certificates of deposit" issued by Cyprus Funds. Contrary to representations that Cyprus Funds invested in "blue chip" stocks and bonds, in reality, Bartoli, Binge, Shisler and Esposito misappropriated millions of dollars from Cyprus Fund, diverted monies to their other businesses and, in a Ponzi-scheme fashion, to pay interest to Cyprus Funds investors. In 2000, the District Court entered judgments of permanent injunction against the individual defendants, Cyprus Funds and Lasco, enjoining them from further violations of the antifraud and registration provisions of the federal securities laws, holding them jointly and severally liable to pay disgorgement, and ordering them to pay civil penalties, in amounts to be determined upon the SEC's motion.

In addition, on December 14, 2005, the SEC filed a Notice of Voluntary Dismissal With Prejudice of its claims for disgorgement and civil penalties against Binge, who is deceased, and Shisler and Esposito, who were both criminally convicted on charges arising from the same facts as those alleged in the SEC's complaint, were incarcerated and have been ordered to pay restitution of $8.7 million and $6 million, respectively. The SEC also dismissed its monetary claims against the corporate Defendants, Cyprus Funds and Lasco, and the Relief Defendants, which are defunct entities under the control of the court appointed receiver for those entities, Michael I. Goldberg (the "Receiver"). Since the commencement of this case, the Receiver has made three distributions to investors totaling approximately $9.6 million.

For further information, see Litigation Release Nos. 16321 (September 30, 1999) and 16768 (October 16, 2000).



Modified: 03/07/2006