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U.S. Securities and Exchange Commission


Litigation Release No. 19596 / March 7, 2006

Securities And Exchange Commission v. Sunbelt Development Corporation, Wendell Rogers, Donald Hammond and Willie Davis, Civil Action File No. 97-1387 (W.D.La.).

SEC Obtains Order of Disgorgement and Civil Penalties Against Donald Hammond, Following Remand

The Securities and Exchange Commission announced today that the Honorable F.A. Little, United States District Judge for the Western District of Louisiana, entered an order on March 1, 2006, following remand from the U.S. Court of Appeals for the Fifth Circuit, arising from an appeal taken by Donald Hammond from a post-judgment contempt proceeding brought against him by the Commission. Judge Little's recent order granted the Commission's motion for summary judgment against Hammond, and reset disgorgement and prejudgment interest against him at $577,720 and $213,730.87, respectively. The disgorgement and prejudgment interest order arose from Hammond's violations of Sections 5 and 17(a) of the Securities Act of 1933 and Sections 15(a) and 10(b) of the Securities Exchange Act of 1934, and Rule 10b-5 thereunder. Hammond had previously been permanently enjoined from further violations of the securities laws, and had previously been ordered to pay a civil penalty in the amount of $100,000. Neither the injunction, nor the civil penalty, was at issue in the remand of Hammond's case from the circuit court.

The Commission's complaint alleged, and the Court found that, Hammond committed violations of the antifraud provisions of the securities laws between mid-1993 and mid-1994. Hammond, a minister, misrepresented and omitted material facts when he sold securities interests in Sunbelt Development Corporation to members of his church, and to members of another church of the same denomination, as well as to friends and relatives of the church members. Hammond and his co-defendants promised exorbitant returns on investments along with the return of the investors' principal when, in fact, Sunbelt was actually operating a Ponzi scheme. The judgments previously entered against Hammond's co-defendants were not at issue on Hammond's appeal arising from the post judgment contempt against him. More than $3.5 million worth of unregistered securities were issued to over 200 individuals in at least 16 states during the scheme.



Modified: 03/07/2006