Friday, December 22, 2006

Investigation of Ponzi Scheme Continues - Receiver Files Update 12-06-06 in Federal Court.

On December 6, 2006, the receiver for the Securities and Exchange Commission, filed the "Receiver's Second Interim Report" with the U.S. District Court for the Eastern District of Texas, Sherman, Texas. The link to the full report is found here: Receivers 2nd Interim Report

Midway through the report the Receiver discusses how
" . . . . individual investors dealt with "facilitators" for the Bank Deposit Program (which has been determined to be a fraudulant Ponzi or piramid scheme). These facilitators were located through out the United States and acted as the intermediators between investors and Travis Correll/Horizon Establishment. The report says "Apparently, some facilitators had “sales agents” working on their behalf, while others did not. The monthly return paid by Correll/Horizon to facilitators varied, and it appears that there are differences in amounts paid by facilitators to the individuals who invested through them."
One of the largest facilitators identified was
" . . . . K.G. Sitton & Co. and its principal, Kerry G. Sitton who are not Defendants or Relief Defendants in this action. The Receiver expects to file suit against these and other Sitton-related entities. As the result of extensive negotiations involving Sitton, the Receiver and the SEC, the Receiver expects that Mr. Sitton and all affiliated entities will become part of this Receivership subject to the terms of the Receivership Order. "
Kerry Sitton, formerly a NCAA Division I basketball referree, was known to be a visitor to Lipan, Texas, where he had developed relationships with certain individuals. On one occassion, Mr. Sitton was met while eating at a local restaurant/grocery, and subsequently inquired about purchasing some land from a local family. At the time he gave no indication that he had involvement with the Bank Deposit Program.

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