Whats up with SKUP->Kansas Ex-Convict Charged in Web Fraud of 1,000 Investors
Washington, Nov. 9 (Bloomberg) -- An ex-convict from Wichita, Kansas, and five companies were charged by regulators with allegedly defrauding 1,000 investors out of as much as $1.3 million in unregistered securities sold mostly over the Internet.
U.S. District Judge Wesley Brown froze the assets of 53-year- old Edward B. Williamson; Fifth Avenue Communications, supposedly Williamson's public relations firm; and Net World Marketing Inc., which says it operates an Internet shopping mall and was overseen by Williamson's wife, the Securities and Exchange Commission said.
The SEC also said assets also were frozen for Andros Hotel & Casino Inc., which claims to own two tracts of undeveloped land in the Caribbean; AutoAuction.com Inc., a Web site that purported to sell cars over the Internet; and AGE Investment Co., which is located in Williamson's Wichita office and was named a ``relief defendant'' in the case. The judge also appointed a receiver in the matter, the SEC said.
An attorney for Williamson was unavailable for comment. Williamson has a criminal record, including a 1967 murder conviction and a 1992 felony conviction for stealing money from his elderly mother, the SEC said. Williamson also was convicted of wire fraud in 1997 when he tried to bribe FBI agents posing as stock brokers, the SEC said. The National Association of Securities Dealers expelled him from the financial services industry in 1993, the SEC added.
Investors in Dark
Beginning in at least April 1997, Williamson used Fifth Avenue Communications and the other companies named in the case to fraudulently sell $1.3 million in securities to more than 1,000 investors nationwide, the SEC said.
Investors, who were kept in the dark about Williamson's role in the operations, were told that proceeds from the various offerings would be used for legitimate businesses, the SEC said. Roughly one-half of the $1.3 million raised in the Net World offering, alone, was siphoned off by Williamson and his connections, the SEC said.
After selling unregistered shares of common stock of Andros, Net World, and New Horizons, the defendants tried to manipulate the value of the securities by spreading false information over the Internet and in press releases, the SEC said.
Williamson also violated a cease-and-desist order issued by the SEC on June 13, the agency said.
The SEC urged investors, before buying any investment promoted over the Internet, to read ``Cyberspace Alert,'' which is available on the SEC's Home Page under the Investor Assistance and Complaints link at www.sec.gov. The publication alerts investors to the telltale signs of online investment fraud, the SEC said. The SEC also urged investors to report suspicious Internet offerings via e-mail to enforcement@sec.gov.
Nov/09/2000 17:50 ET
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