SEC Charges Notorious "Dr. Noe" and Five Others in Million Dollar Prime Bank Fraud
FOR IMMEDIATE RELEASE
Washington, DC, February 14, 2002 The U.S. Securities and Exchange Commission Thursday filed fraud charges against career swindler Clif Goldstein long known to criminal law authorities as "Dr. Noe" for bilking at least 20 investors out of nearly $1.1 million in an elaborate fraud known as a prime bank scheme. The lawsuit also names Goldstein's older brother, Paul Howe Noe, and two Boca Raton, Fla. companies run by the brothers, Great American Trust Co. and Great American Trust Corp.
"Dr. Noe," whose multi-million dollar swindles have been widely chronicled in U.S. newspapers and abroad for decades, is a high school dropout from Texas who has sometimes claimed to be highly educated in order to gain the confidence of his victims. Goldstein, 71, formerly Clifford Dixon Noe, has a criminal record as a con man that dates back to the 1970s that includes multiple convictions and prison sentences for wire fraud, mail fraud and forgery. Goldstein's brother, Paul Noe, 74, also has an extensive criminal record, including convictions and prison sentences for embezzlement, larceny and wire fraud.
The SEC complaint, filed in the U.S. District Court in Columbia, S.C., alleges that Goldstein, Noe and their companies sold wholly fictitious securities that they described as "stand-by letters of credit" sold by "top ten European banks." Four other defendants named in the complaintCarolyn Kaplan, Noel Alelov, Russell B. Gerstein and Nuell W. Paschalserved as "finders" who were paid for locating and luring potential victims.
The prime bank schemes were promoted through in-person solicitations and over the Internet, according to the complaint. Victims who were targeted typically included individuals associated with cash-strapped companies in urgent need of financing and sophisticated investors looking for high returns in short periods of time. In some instances, the defendants promised to double investors' money in 13 weeks. Instead, the complaint charges, they pocketed the money for their own personal use.
In its complaint, the SEC alleges that the defendants violated the antifraud provisions of the federal securities laws, Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The Commission seeks permanent injunctions against future violations of the anti-fraud provisions, disgorgement of defendants' ill-gotten gains plus prejudgment interest, and civil penalties.
In a related matter, the U.S. Attorney for the District of South Carolina filed criminal charges against Goldstein, Noe, Gerstein and Paschal for their roles in the alleged investment scheme. The brothers were arrested by the Federal Bureau of Investigation.
The Commission acknowledges the assistance of the South Carolina Offices of the FBI and the U.S. Attorney.
Additional information about the case can be found in Litigation Release No. 17362. For more information about prime bank fraud, visit the SEC's "Prime Bank Information Center" at www.sec.gov/divisions/enforce/primebank.shtml. To report suspicious activity involving potential Internet fraud, visit www.sec.gov/complaint.shtml.