U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 19118 / March 3, 2005

Securities And Exchange Commission v. Resource Development International, LLC, et. al., No.4-97CV-1018Y, USDC, NDTX (Dallas Division)

FATHER, SON SENTENCED TO 27 YEARS, 8 MONTHS FOR ROLE IN PRIME BANK SCHEME

The Securities and Exchange Commission announced that on February 17, 2005, Santa Clara County (California) Superior Court Judge Rene Navarro, sentenced James Edwards and his son, David Edwards, to 27 years and 8 months in state prison for their conviction by a jury for their roles in running a fraudulent prime bank scheme. The criminal charges related to the Commission's civil action, SEC v. Resource Development International, LLC, et al., No. 3:02-CV-0605-R (N.D. Texas), in which the Edwards were enjoined from future violations of the anti-fraud and registration provisions of the federal securities laws. Further, each was ordered to disgorge $37,011,399, plus prejudgment interest of $11,205,739, and to pay a civil money penalty of $120,000.

The Commission's complaint against the Edwards and others charged that from January 1999 through March 2002, the defendants fraudulently raised approximately $98 million from more than 1300 investors nationwide, targeting persons seeking to invest retirement funds. In the course of marketing the RDI trading program, the Edwards and others falsely claimed that investor money would be used in Europe to trade financial instruments with "top 25" or "top 50" banks in a program sponsored by the Federal Reserve and global organizations, generating annual returns of 48 to 120 percent with complete safety of principal. In reality, the prime bank program marketed to investors did not exist and investor funds were misappropriated for personal and unauthorized uses, including making ponzi payments. The Commission's complaint further charged that the Edwards diverted investor funds to buy property and a home for their personal use.

The Commission's complaint charged the Edwards and other defendants violated Sections 5(a), 5(c) and 17(a) of the Securities Act of 1933, and Sections 10(b) and 15(a) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder.

Unscrupulous promoters continue to victimize the public with Prime Bank schemes. Accordingly, investors are advised to access the Commission's "Prime Bank" Investor Alert, which provides tips on how to avoid being a victim of these scams. The investor alert can be found on the Commission's web site, at www.sec.gov/divisions/enforce/primebank.shtml.

The Commission acknowledges the assistance and cooperation of several other government agencies in this matter, including the State of Washington Department of Financial Institutions Securities Division; the Alabama Securities Commission; the State of Wisconsin Department of Financial Institutions; the District Attorney's Office of Santa Clara County, California; the Arizona Corporation Commission, Securities Division; the Arizona Attorney General's Office; and the Board of Governors of the Federal Reserve System.

http://www.sec.gov/litigation/litreleases/lr19118.htm