Barry M. Budilov and Raymond J. Green

U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 20281 / September 13, 2007

SEC v. Barry M. Budilov and Raymond J. Green, Civil Action No. 02-7479 (E.D. Pa.)

Commission Settles Financial Fraud Action Against Barry M. Budilov and Raymond J. Green

The Securities and Exchange Commission announced that on September 13, 2007, Judge Robert F. Kelly of the United States District Court for the Eastern District of Pennsylvania entered Final Judgments against Barry M. Budilov ("Budilov") and Raymond J. Green ("Green"), enjoining each defendant from future violations of Section 17 of the Securities Act of 1933, Sections 10(b) and 13(b)(5) of the Securities Exchange Act of 1934 ("Exchange Act"), and Rules 10b-5, 13b2-1 and 13b2-2, thereunder, and from aiding and abetting violations of Sections 13(a), 13(b)(2)(A) and 13(b)(2)(B) of the Exchange Act and Rules 12b-20, 13a-1 and 13a-13, thereunder; and barring each defendant from serving as an officer or director of any reporting company pursuant to Section 21(d)(2) of the Exchange Act. Budilov and Green each consented to the Court's entry of Final Judgment, without admitting or denying the allegations of the Commission's Complaint.

Budilov is the former president, director, and chief executive officer of Ambassador Eyewear Group, Inc. ("Ambassador"), a now defunct eyeglass frame distributor that was located in Philadelphia, Pennsylvania, and whose stock was traded on the Chicago Stock Exchange. Green is Ambassador's former treasurer and principal financial accounting officer. The Commission's Complaint, filed in September 2002, alleged, among other things, that, from at least 1997 through at least December 1998, Budilov and Green engaged in a fraudulent scheme to artificially inflate Ambassador's assets, income, and retained earnings. The Complaint alleged that, as a result of the scheme, Ambassador falsely claimed, in its filings with the Commission and in press releases, that it was profitable when, in fact, the company had incurred substantial losses. In addition, Ambassador overstated its assets by as much as 35 percent. The Commission's Complaint alleged that, as part of the scheme, Budilov and Green falsified Ambassador's books and records related to income, expense, accounts receivable, retained earnings, and inventory, and lied to Ambassador's auditors. The Complaint further alleged that, after others began suspecting the fraud, Budilov attempted to conceal their involvement by destroying evidence, causing others to destroy evidence, and persuading others to accept responsibility for the fraud.

In connection with largely the same conduct as that described in the Commission's Complaint, Budilov and Green were indicted and the Commission's civil enforcement action was stayed pending the disposition of those proceedings. On November 26, 2004, Green pleaded guilty to two counts of the superseding indictment and on January 30, 2006, he was sentenced to 5 years of probation, including 8 months of home custody, and ordered to pay restitution of $17,447,437. On July 12, 2005, Budilov pleaded guilty to four counts of the superseding indictment, and on January 13, 2006, he was sentenced to a term of 27 months of imprisonment, 5 years of probation, and ordered to pay restitution of $17,447,437. The restitution order against Budilov and Greene was reduced to a judgment, owed jointly and severally by both of them. As a result of these sanctions entered in the criminal proceeding, the Commission accepted settlements from each defendant without imposing addition monetary sanctions.

For further information, please see Litigation Release No. 17752 (September 26, 2002).