Press Release 11/2/05

Federal Court Approves Substantial Return to Scammed Investors
of one of the nation's largest Ponzi schemes

Dallas, Texas – More than 360 investors who had more than $43 million dollars stolen in an illegal investment scheme, will receive a substantial return of their lost money under a plan approved by United States District Court Judge Jerry Buchmeyer. "Through coordinated efforts with the Securities and Exchange Commission, the Office of the Attorney General of Arizona, and a number of lawsuits against those who profited from the Ponzi scheme, we recovered enough money to return more than 62 cents on the dollar to the investors who lost money in the Ponzi scheme" said Lawrence Warfield, the court appointed Receiver. Judge Buchmeyer approved the final distribution to Dennel investors, bringing the receivership to a close.

In March, 1999, the Securities and Exchange Commission shut down one of the nation’s largest Ponzi schemes known as the Dennel Trading Program. The kingpins of the Ponzi scheme, Benjamin Franklin Cook and Robert Burr, were first arrested for being held in contempt of court by Judge Buchmeyer, and later convicted by the State of Arizona for fraud. Cook and Burr are currently incarcerated and serving terms of more than 14 years.

The illegal investment program was aimed at the elderly who were promised returns of more than six percent per month from investments supposedly made in prime European banks to aid third world countries. In the case brought by the Securities and Exchange Commission, Judge Buchmeyer appointed Receiver Lawrence Warfield to locate the stolen investor funds and recover the remaining funds to be returned to the defrauded investors. Over the course of several years, Receiver Lawrence Warfield, working with the Securities and Exchange Commission, seized real property, exotic automobiles, airplanes, boats, and jewelry that was purchased with the stolen money. In addition, “the Receiver recovered several million dollars from successful lawsuits against brokers who sold the illegal program and a number of charitable organizations who received contributions from the leaders of the Ponzi scheme,” said Kelly Crawford of Scheef & Stone, L.L.P., an attorney for the Receiver.

The substantial return to investors represents a significant victory for the Securities and Exchange Commission. Jeffrey Norris, the lead attorney for the SEC on the case, called the return to investors “the most gratifying component of this successful enforcement action which was brought about by the coordinated efforts of many dedicated public servants in several federal and government agencies. The Commission’s intervention to halt the ongoing Dennel fraud, the monetary relief provided to victims of the scheme, and the Commission’s assistance in the criminal prosecutions of several of the chief perpetrators epitomize the fulfillment of this agency’s mission of ‘investor protection’.”