U.S. SECURITIES AND EXCHANGE COMMISSION Litigation Release No. 15685 / March 26, 1998 SECURITIES AND EXCHANGE COMMISSION v. WESTERN EXECUTIVE GROUP, INC., CASH SYSTEMS USA, INC., CHARLES R. RIETZ, ROBERT R. PARRISH, ROBERT J. STRUTH and R. STEPHEN EDGEL, Civil Action No. 96-6938 GHK (JGx) (C.D. Cal.) The Securities and Exchange Commission ("Commission") announced that on March 10, 1998, the Honorable George H. King, United States District Court Judge for the Central District of California, entered a Judgment against defendants Charles R. Rietz ("Rietz") of Gilbert, Arizona, Robert R. Parrish ("Parrish") of Gilmer, Texas, Robert J. Struth ("Struth") of Southern California, and R. Stephen Edgel ("Edgel") of Carmichael, California permanently enjoining these four defendants from selling unregistered securities and selling securities by fraudulent means. Also, Parrish, Struth and Edgel were permanently enjoined from operating as unregistered broker- dealers. In addition, the Judgment includes an order that Rietz pay disgorgement of $212,077; that Parrish pay disgorgement of $188,311; that Struth pay disgorgement of $149,885; and that Edgel pay disgorgement of $44,823. Each defendant was ordered to pay a civil penalty in the same amount. The Commission alleged in its Complaint filed in October of 1996 that the defendants were operating a Ponzi scheme involving investment contracts for the sale and leaseback of automated teller machines ("ATMs"). The defendants offered the ATM investment program over the Internet to the public and raised over $3.49 million from at least 132 investors nationwide. This was the Commission's first lawsuit involving ATMs and one of the largest lawsuits involving Internet investment fraud. The Complaint alleged that the defendants violated Sections 5(a) and 5(c) of the Securities Act of 1933 (the "Securities Act"), the registration provisions, and Section 17(a) of the Securities Act and Section 10(b) of the Securities Exchange Act of 1934 (the "Exchange Act"), and Rule 10b-5 thereunder, the antifraud provisions. The Complaint also charged Parrish, Struth and Edgel with violations of Section 15(a) of the Exchange Act, the broker- dealer registration provision.