Litigation Release No. 18644 / March 29, 2004
SECURITIES AND EXCHANGE COMMISSION V. WELLNESS UNIVERSE CORPORATION, SYNPAN CORPORATION, AND GEORGE CHARLES PAPPAS, , Civil Action No. 00 Civ. 1147 (S.D.N.Y.) (R.M.B.)
The Securities and Exchange Commission ("SEC") announced today that the United States District Court for the Southern District of New York entered final judgments by consent on March 17, 2004, against two corporations, defendants Wellness Universe Corporation ("Wellness") and Synpan Corporation ("Synpan"), and their control person, defendant George Charles Pappas ("Pappas"), in an action brought by the SEC to stop an ongoing pump and dump scheme perpetrated by the defendants in connection with the sale of Wellness stock.
Subject to the judgments are:
Pappas, who is 67 years old, Chairman and Chief Executive Officer of Wellness and Synpan, and a resident of New York, New York.
Wellness, a Minnesota corporation that most recently purported to be in the health and wellness business and whose shares were previously quoted on the OTC Bulletin Board.
Synpan, a Delaware corporation that is controlled by Pappas.
The SEC's complaint alleged that between approximately mid-December 1999 and early February 2000, Pappas caused Wellness and Synpan to issue a series of false or misleading press releases designed to inflate artificially the price of Wellness stock so that the defendants, through certain friends and family members of Pappas, could sell shares of Wellness stock to the public at artificially inflated prices.
Without admitting or denying the allegations of the SEC's complaint, Wellness, Synpan, and Pappas have each consented to the entry of a Final Judgment permanently enjoining each from future violations of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5, promulgated thereunder. In addition, the Final Judgment to which Pappas has consented requires Pappas to disgorge a total of $1,128,572.24 in ill-gotten gains and prejudgment interest, orders Pappas to pay a $75,000 civil penalty, and imposes on Pappas a penny stock bar and an officer and director bar. That Final Judgment also bars Pappas from ever again offering or selling unregistered securities professionally to investors. Specifically, it will permanently bar Pappas from participating in an unregistered offering "while acting as, on behalf of, or in association with, an issuer, underwriter, broker, or dealer."
Previously, on March 15, 2001, the Court entered a Final Judgment by consent as to relief defendants Paul George Pappas, Kyriak W. Pappas, Karyn L. Pappas, and Makypa. Without admitting or denying the allegations of the Commission's complaint, these relief defendants each consented to entry of a Final Judgment ordering that they collectively disgorge a total $2,220,436.41, representing the defendants' ill-gotten gains, plus prejudgment interest, obtained from the sale of Wellness stock during the course of the fraud.
See also Litigation Release No. 16443 (February 17, 2000)
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Wellness Universe, et al.
On February 16, 2000, the SEC filed a complaint in connection with a pump and dump scheme perpetrated by George Pappas, the CEO of both Wellness Universe Corp. and Synpan Corp. The SEC alleged that between approximately mid-December 1999 and early February 2000, Pappas caused the companies to issue a series of false or misleading press releases designed to inflate artificially the price of Wellness common stock. The complaint also alleged the defendants, through certain friends and family members of Pappas (“relief defendants”), sold shares of Wellness stock to the public at artificially inflated prices.
Without admitting or denying the allegations of the SEC's complaint, Pappas, Wellness, and Synpan each consented to permanent injunctions, and Pappas agreed to disgorge more than $1.1 million in ill-gotten gains and prejudgment interest, and to pay a $75,000 civil penalty. In addition, the relief defendants agreed to disgorge more than $2.2 million in ill-gotten gains and prejudgment interest.
For more information about the SEC’s action, you can read Litigation Release Nos. 16439, 16443, and 18644.
The Court appointed Alan Vinegrad, Esq., as Distribution Agent. The above funds have been paid and are part of a Disgorgement Fund for distribution to investors who suffered losses on their purchases of Wellness common stock during the scheme. For more information, you can visit the Distribution Agent’s website.
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