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U.S. Securities and Exchange CommissionLitigation Release No. 18852 / August 25, 2004SEC v. Mojave Valley Resort, Inc. and Mark A. Temple, Case No. ED CV 04-1061 VAPSEC CHARGES PALM SPRINGS DEVELOPER WITH FRAUD IN CONNECTION WITH NEVADA MUNICIPAL BOND OFFERINGThe Securities and Exchange Commission today announced that it has brought settled fraud charges against Palm Springs developer Mojave Valley Resort, Inc. ("MVRI") and co-owner Mark A. Temple, stemming from a municipal bond offering conducted to finance a housing and casino project in Nevada. The complaint alleges that MVRI and Temple defrauded investors by falsely claiming that the bonds were protected by a security interest in the property being developed, when in fact no such security interest existed. Without admitting or denying the allegations, MVRI and Temple have agreed to settle the enforcement proceeding by paying $40,001 in disgorgement and penalties and by consenting to a permanent injunction against future securities law violations. According to the Commission's civil complaint, MVRI is the developer of a casino and housing project on Indian land owned by the Fort Mojave Indian Tribe near Laughlin, Nevada. MVRI financed the development project through a $12.75 million bond offering in late 1999. The Commission charges that MVRI and Temple falsely stated in the offering materials that the bonds being issued to investors were secured by deeds of trust on the Tribal property. In actuality, MVRI's lease with the Tribe provided that no such security interest could be given absent approval from the Tribe and the United States Bureau of Indian Affairs. MVRI and Temple had failed to obtain such authorization, and, as a result, the offering materials were false and investors had no security interest for the bonds. MVRI subsequently defaulted on the bonds, and investors are owed approximately $11 million. The Commission's lawsuit, which is being brought in federal district court in the Central District of California, charges MVRI and Temple with violations of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and Section 17(a) of the Securities Act of 1933. Under the settlement, MVRI and Temple will be enjoined by the district court from violating these statutory provisions, and will pay disgorgement of $1 and a civil penalty of $40,000.
http://www.sec.gov/litigation/litreleases/lr18852.htm
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