U.S. Securities and Exchange Commission

Litigation Release No. 18672 /April 20, 2004

Securities and Exchange Commission v. Capital Acquisitions, Inc, et al., Civil Action No. 2:97-0977B (D. Utah)

U.S. v. Clealon B. Mann, Criminal Action No. 2:02-0741 (D. Utah)
U.S. v. Wayne C. Notwell, Criminal Action No. 2:99-0063 (D. Utah)

On April 15, 2004, Judge Ted Stewart of the District of Utah imposed a five year prison sentence on Clealon B. Mann for his part in the Capital Acquisitions investment scheme. Mann previously pleaded guilty to conspiracy to commit mail and wire fraud and the sale of unregistered securities in connection with the scheme. Earlier, on April 12, 2004, Judge Stewart imposed a one year plus one day sentence on Wayne C. Notwell, who pleaded guilty to a separate criminal information. Mann and Notwell were ordered jointly and severally to pay restitution to investors in the schemes in the amount of $8,162,743. Mann's sentence is identical to the sentence previously imposed on Pete J. Buffo, the third principal actor in the scheme.

Mann, Notwell, and Buffo have consented to entry of injunctions in a civil case filed by the Commission concerning Capital Acquisitions and a companion scheme known as Laser Leasing. The injunctions prohibit future violations of the registration and antifraud provisions of the federal securities laws, Sections 5(a), 5(c) and 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934, and Rule 10b-5 thereunder. The Commission's case and the criminal cases alleged that Mann, Notwell, and Buffo raised approximately $33 million from nationwide offers and sales of securities in the schemes. Investors were told that the money would be used to finance acquisition of properties to produce oil and gas and to purchase and lease eye laser surgery machines, but instead the defendants used most of the investor proceeds to make interest payments to earlier investors and to finance other ventures that Mann or Buffo controlled.

For further information on this case, see Litigation releases 17889 (December 10, 2002), 17757 (September 30, 2002), 16400 (January 5, 2000), 16083 (March 9, 1999), 15868 (September 2, 1998), 15670 (March 13, 1998), and 15601 (December 23, 1997).

http://www.sec.gov/litigation/litreleases/lr18672.htm