U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 17665 / August 7, 2002

Accounting and Auditing Enforcement Release No. 1611 / August 7, 2002

SECURITIES AND EXCHANGE COMMISSION v. GARY STEPHEN JOINER, GRANT W. PECK, DEAN FREDRICK SESSIONS, and MARK ALLEN DISALVO, United States District Court for the Northern District of California, Civil Action No. CO-03808-TEH

SEC CHARGES FOUR BUSINESSMEN WITH ILLEGAL STOCK SALES

The United States Securities and Exchange Commission ("Commission") announced today that it has filed civil charges against three Colorado residents and a California businessman stemming from their role in a San Francisco Bay Area stock scam. The Commission alleges that the four defendants participated in a scheme to sell stock to the public without registering with the Commission, thus allowing the defendants and other corporate insiders to sell millions of shares of stock into the public market without disclosing their control over the companies. The defendants, without admitting or denying the allegations in the Commission's complaint, consented to the entry of permanent injunctions against them and agreed to pay $271,000 in disgorgement, prejudgment interest and civil penalties.

Named in the Commission's complaint are Gary Stephen Joiner of Boulder, Colorado; Grant W. Peck of Boulder, Colorado; Mark Allen DiSalvo of Shell Beach, California; and Dean Fredrick Sessions of Broomfield, Colorado.

According to the Commission's complaint, the defendants were in the business of creating shell companies -- also known as blank check companies -- with no operations and no existence aside from publicly traded stock that the defendants controlled. The defendants created the shell companies for the purpose of merging them with privately held companies in a process known as a reverse merger. Through the reverse mergers, the privately held companies became publicly traded without registering with the Commission. While such mergers are not illegal, stock held by insiders or affiliates after the merger generally cannot be resold absent registration. Despite this, following each reverse merger, the defendants personally sold hundreds of thousands of shares of stock to the public in unregistered transactions. They also sold several million shares to persons affiliated with the private companies, who then resold the stock to the public in unregistered transactions. Investors bought stock in the newly merged companies, unaware that the vast majority of the stock was being sold by the defendants or other corporate insiders to whom the defendants had transferred their stock.

The complaint alleges that the defendants' scheme resulted in the creation of two publicly traded companies - M & A West, Inc. ("MAWI"), a purported Internet incubator based in San Bruno, California; and Workfire.com, a related Internet business. In September 2001, the Commission charged MAWI and various related individuals with fraud, alleging that the company was a sham and that its supposed revenue from operations in fact derived primarily from illegal stock sales by corporate insiders. The Office of the United States Attorney indicted Frank Thomas Eck, III and Zahra R. Gilak on 82 counts, including securities fraud and money laundering, based on their roles in the scheme.

In the present action, filed in U.S. District Court for the Northern District of California, the Commission charges the defendants with violating the registration provisions of the federal securities laws, Sections 5(a) and 5(c) of the Securities Act of 1933. Simultaneous with the filing of the complaint, each of the defendants agreed to be enjoined from future violations, and also to pay disgorgement, prejudgment interest and civil penalties, as follows: Joiner, $78,000; Peck, $76,000; DiSalvo, $67,000; and Sessions, $50,000.