U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 19337 / August 16, 2005

UNITED STATES V. GARY VAN WAEYENBERGHE, Case No. 3:04CR0087AS (N.D. Ind.)

SECURITIES AND EXCHANGE COMMISSION V. GARY VAN WAEYENBERGHE ET AL., Case No. 3:00CV0446RM (N.D. Ind.)

FORMER FIRST CHOICE PRESIDENT AND COO, PREVIOUSLY SUED BY SEC FOR INVOLVEMENT IN FIRST CHOICE OFFERING FRAUD, SENTENCED TO PRISON TERM AND RESTITUTION

The Securities and Exchange Commission (Commission) announced that on August 5, 2005, the Honorable Allen Sharp of the United States District Court for the Northern District of Indiana sentenced Gary Van Waeyenberghe to fourteen years in prison as a result of his July 2005 jury convictions on charges of conspiracy, mail fraud, wire fraud and money laundering. The charges were based on Van Waeyenberghe's misconduct while he was President and Chief Operating Officer of First Choice Management Services (First Choice). Van Waeyenberghe also was ordered to pay $20 million in restitution and sentenced to two years of supervised release after the completion of his prison term.

The Commission charged Van Waeyenberghe with violations of the federal securities laws based on related conduct in July 2000. Shortly after the filing of the Commission's Complaint, the Court issued a Temporary Restraining Order and subsequently a Preliminary Injunction freezing First Choice's and Van Waeyenberghe's assets and appointed a receiver to manage First Choice's assets during the pendency of the litigation. On January 8, 2003, by consent, the Court permanently enjoined First Choice and Van Waeyenberghe from future violations of the antifraud and securities registration provisions of the federal securities laws, ordered First Choice and Van Waeyenberghe jointly and severally to pay $31.3 million in disgorgement and prejudgment interest and imposed a $110,000 civil penalty on Van Waeyenberghe. On the same day, the Court entered an Order Liquidating First Choice which required the court-appointed receiver for First Choice to liquidate First Choice's remaining assets in order to satisfy, at least in part, First Choice's disgorgement obligation.

For additional information, see Litigation Release No. 16635 (July 27, 2000), 17931 (January 14, 2003) and 18997 (December 14, 2004).

http://www.sec.gov/litigation/litreleases/lr19337.htm