Presto Telecommunications, Inc. and Alfred Louis Vassallo, Jr.

U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 21710 / October 27, 2010

Securities and Exchange Commission v. Presto Telecommunications, Inc. and Alfred Louis Vassallo, Jr., United States District Court for the Southern District of California, Case No. 04CV00162IEG (filed Jan. 24, 2004).

JUDGE ISSUES ORDER APPOINTING U.S. ATTORNEY TO PROSECUTE CRIMINAL CONTEMPT AGAINST DEFENDANT ALFRED LOUIS "BOBBY" VASSALLO, JR.; HEARING ON CIVIL CONTEMPT SET

On October 26, 2010, the Honorable Chief Judge Irma E. Gonzalez of the U.S. District Court for the Southern District of California issued an Order referring the matter of Alfred Louis "Bobby" Vassallo, Jr.'s violations of the Court's Permanent Injunction entered against him on August 24, 2005 to the United States Attorney for the Southern District of California for criminal prosecution. The Court's Order appoints the United States Attorney's Office as prosecutor of criminal contempt. A trial of that action will be set at such time as convenient for the Court and the parties.

The Court issued a separate order on October 26 scheduling the hearing on an Order to Show Cause why Vassallo should not be held in civil contempt of the Permanent Injunction for December 9, 2010.

The Court's Orders follow from the Commission's Application for an Order to Show Cause re Civil Contempt against Vassallo, filed on September 21, 2010, which alleged that Vassallo violated the Court's Permanent Injunction enjoining him from engaging in the offer and sale of unregistered securities in violation of the securities registration provisions and committing fraud in connection with the offer and sale of securities in violation of the antifraud provisions of the federal securities laws. The Application alleged that Vassallo also violated the Permanent Injunction by failing to disgorge his ill-gotten gains and pay civil penalties and other monetary relief to the Court-appointed Receiver for Presto Telecommunications, Inc. ("Presto"). The Court granted the Commission's Application and issued an Order to Show Cause on September 24, 2010.

The Commission previously filed a complaint against Vassallo and Presto on January 27, 2004 that charged Vassallo with violating the securities registration provisions of Section 5 of the Securities Act of 1933 and the antifraud provisions of Section 17(a) of the Securities Act and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder for Vassallo's role in perpetrating a fraudulent scheme through Presto, which the Receiver for Presto calculated raised about $20 million from more than 500 investors.

For further information, see Litigation Release Nos. 21661 (September 24, 2010), 19368 (September 9, 2005), 18554 (January 28, 2004), 18616 (March 9, 2004), and 18858 (August 26, 2004).