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U.S. Securities and Exchange Commission


Litigation Release No. 19613 / March 17, 2006

SEC v. Eric Resteiner, et al., Civil Action No. 01-CV-10637 (PBS) U. S. District Court for the District of Massachusetts - Filed April 16, 2001.

The Securities and Exchange Commission announced today that The First Church of Christ, Scientist, in Boston, Massachusetts has volunteered to donate $2,300,000 to the disgorgement fund set up to provide relief to the victims of the fraud alleged in the Commission's SEC v. Eric Resteiner, et. al, litigation in District Court in Massachusetts. The donation is being made under Section 308(b) of the Sarbanes-Oxley Act, which allows the Commission to accept gifts to the United States for a disgorgement fund and eventual distribution to defrauded investors. This is the first such donation made to a disgorgement fund under the Sarbanes-Oxley Act, which also allows the Commission to add civil penalties obtained from violators to disgorgement funds.

The Commission commenced its litigation against Resteiner and his co-defendants in 2001, alleging that they defrauded investors out of more than $20 million in a prime bank scheme. Resteiner's fraud targeted members of the Church of Christ Scientist. The Commission obtained a default judgment against Resteiner in 2002 and set up a disgorgement fund in 2003 after obtaining a judgment against a co-defendant. In late 2004, First Church of Christ, Scientist approached Commission staff with concerns that Resteiner had donated $2.3 million to a church building fund using money he received from defrauded investors. Resteiner's donation to the church was made prior to the Commission's allegations of fraud being raised in 2001. The staff of the Commission, with the assistance of the United States Attorney's Office for the District of Massachusetts, confirmed that Resteiner's contributions to the church were made using proceeds of his fraud. Although the church had already spent the building fund donation and otherwise had no legal obligation to repay the money, it nevertheless decided to make a donation from its general funds to the victims' fund in this matter in an amount equal to Resteiner's fraudulent contributions.

The $2,300,000 will be deposited in a disgorgement fund maintained at the United States District Court for the District of Massachusetts and together with approximately $700,000 obtained from one of Resteiner's co-defendants, will be paid out to victims of the fraud in accordance with a plan that the staff of the Commission is in the process of finalizing. Eric Resteiner recently pled guilty to a fraud indictment brought in the United Stated District Court for the District of Massachusetts arising out of the same conduct alleged in the Commission's complaint and currently is incarcerated awaiting sentencing.

For further information, please see Litigation Release No. 18648 (March 30, 2004); Litigation Release No. 18414 (October 16, 2003); Litigation Release No. 18394 (October 4, 2003); Litigation Release No. 17858 (November 22, 2002); Litigation Release No. 17713; (September 5, 2002); Litigation Release No. 16969 (April 18, 2001); and Litigation Release No. 16963 (April 16, 2001).



Modified: 03/17/2006