U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 21022 / May 1, 2009

Securities and Exchange Commission v. Lambert Vander Tuig, The Carolina Development Company, Inc. and Jonathan Carman, Case No. SACV06-00172 AHS (MLGx) (C.D. Cal.)

Distribution of $7.7 Million to be Made to Investors in Carolina Development Company Offering Fraud

On April 23, 2009, Thomas Seaman, the court-appointed Receiver obtained an order approving the distribution of funds pursuant the Securities and Exchange Commission's previously approved plan of partial distribution. The Order authorizes a distribution of $7,751,332.17 to defrauded investors. This amount represents a return of approximately 20% of investors' total investments in The Carolina Development Company.

The complaint alleged that Vander Tuig and his co-defendants obtained investments of at least $30 million from the fraudulent, unregistered offering of Carolina Company stock. Defendants made false claims including: 1) representations that Carolina Company would soon make an initial public offering and that the stock would likely trade at a price many times the initial offering price, while in reality, the Carolina Company had not taken any substantial steps to register an offering; (2) failure to disclose that the same stock being sold in the unregistered offering was available for purchase through the Pink Sheet quotation system at prices well below the offering price; and, (3) representations that shares purchased would be immediately available for trading as soon as Carolina Company went public, when such shares were actually restricted and could not be sold for at least one year. Further, Defendants failed to disclose that Vander Tuig was previously enjoined by in an action brought by the Commission and was subsequently barred by the Commission from association with any broker or dealer. The SEC filed its action against Carolina Development Company on February 16, 2006. See Litigation Release No. 19569 dated February 17, 2006.

http://www.sec.gov/litigation/litreleases/2009/lr21022.htm