U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 20755 / September 29, 2008

Securities and Exchange Commission v. Delta Onshore Management, LLC, Jerry P. Jackson, Peter J. Brooks, Daniel Cohen, and Jason Hertz, Defendants, and Onshore Leasing, LLC and PJB Enterprises, Inc., Relief Defendants, Civil Action No. 08-1278-MLB-DWB (U.S.D.C./D. Kansas, Wichita Division)

Receiver Appointed and Assets Frozen in Fraudulent "Joint Venture" Offering

On September 24, 2008, U.S. District Judge Monti L. Belot, for the District of Kansas, Wichita Division, appointed a receiver and froze the assets of four defendants and two relief defendants in an emergency injunctive action filed by the Securities and Exchange Commission ("Commission"). The charges stem from an alleged securities offering fraud that raised approximately $2.8 million from approximately 50 investors across the United States. The case is an off-shoot of a previously filed massive securities oil-and-gas related offering fraud case, SEC v. Michael J. McNaul, II, et al., pending in the United States District Court for the District of Kansas, Wichita Division, Civil Action No. 08-1159-JTM- DWB. Both cases involve the use of purported oil-and-gas equipment-leasing joint ventures that were allegedly structured to evade the securities laws. In truth, however, the investments are not joint ventures, but investment contracts, which meet the statutory definition of securities and fall within the scope of the federal securities laws.

Named as defendants in the Commission's case are:

• Delta Onshore Management, LLC ("Delta Management"), an Oklahoma company that served and the managing entity for the Delta Onshore Leasing Joint Venture ("Delta Venture");
   
• Jerry P. Jackson ("Jackson"), of Wichita, Kansas, the principal of Delta Management;
   
• Peter J. Brooks ("Brooks"), of Woodland Hills, California, an unlicensed salesman who sold interests in the Delta Venture;
   
• Daniel Cohen ("Cohen"), of Calabasas, California, an unlicensed salesman who sold interests in the Delta Venture; and
   
• Jason Hertz ("Hertz"), of Tarzana, California, an unlicensed salesman who sold interests in the Delta Venture.

The complaint also named two entities formed by Brooks and Cohen as relief defendants: Onshore Leasing, LLC ("Onshore") and PJB Enterprises, Inc. ("PJB").

The complaint alleges that defendants Delta Management and Jackson offered and sold securities in the same fraudulent manner as the defendants in the McNaul case, including using offering materials that are virtually identical to the materially false and misleading materials used by the McNaul defendants. Among other things, defendants Delta Management and Jackson allegedly misrepresented that the venture had acquired two drilling rigs that were "ready to go to work" earning the venture annual returns of 25% to 36%. In fact, as of early August 2008, when defendant Jackson was contacted by the SEC and ceased the offering, the Delta venture had not acquired any drilling rigs and investors had not received any returns over the seven-month period of the scheme. Moreover, the complaint alleges that approximately half of the funds raised from investors was used to pay exorbitant sales commissions to unlicensed securities salesmen, including defendants Brooks, Cohen and Hertz, who "cold called" unsuspecting investors, over half of whom are 60 years old or older.

The complaint alleges that Jackson and Delta Management violated the anti-fraud provisions of Section 17(a) of the Securities Act of 1933 (Securities Act), and Section 10(b) of the Securities Exchange Act of 1934 (Exchange Act) and Rule 10b-5 thereunder, as well as the securities registration provisions of Sections 5(a) and 5(c) of the Securities Act. The complaint also alleges that Brooks, Cohen and Hertz violated Section 5(a) and 5(c) of the Securities Act, and the broker-dealer registration provision of Section 15(a) of the Exchange Act. The complaint seeks preliminary and permanent injunctions, disgorgement together with prejudgment interest, and civil penalties. The complaint further alleges that the relief defendants identified above received ill-gotten gains from the fraudulent offering.

The Court has frozen the assets of defendants Delta Management, Brooks, Cohen and Hertz, as well as the assets of relief defendants Onshore and PJB. A receiver has also been appointed to recover and conserve assets for the benefit of defrauded investors.

Without admitting or denying the allegations set forth in the complaint, Jackson and Delta Management have consented to the entry of an order permanently enjoining them from engaging in the violations set forth above, and deferring any monetary relief until a later date.

The Commission acknowledges the cooperation and assistance of the Oklahoma Securities Commission during this investigation.