Great White Marine & Recreation, Inc.

LITIGATION RELEASE NO.17062 / July 6, 2001

SEC v. Great White Marine & Recreation, Inc., W-99-CA-230, USDC WD/TX [Waco Division]

On June 19, 2001, Judge Walter R. Smith, Jr., of the United States District Court for the Western District of Texas, Waco Division, ordered that Great White Marine and Recreation, Inc., a Waco-based corporation and Alvis Colin Smith, Jr., its former chairman and president, be enjoined from engaging in securities fraud and from offering or selling unregistered securities. Judge Smith found that Mr. Smith had engaged in fraud involving the securities of Great White and ordered him to make disgorgement by surrendering a 2000 Jaguar, an interest in four other vehicles, three lots on Lake Corsicana, his interest in a San Antonio townhouse, all of his securities, a $100,000 an appearance bond, and certain Mexican assets and $1.5 million by paying in cash. In the event that Smith does not make the ordered disgorgement, within 90 days, Judge Smith further ordered that Smith make additional disgorgement of a 1998 Ford Expedition and a 1999 Chevrolet Camaro, together with an additional $1.4 million payment. Judge Smith also ordered Kenneth Ursrey of Mart, Texas, a relief defendant who is Smith's son-in-law, to disgorge $20,000 in cash, all Great White securities in Ursrey's possession and a 1999 Ford Expedition.

In its complaint, the Commission alleged that Great White and Smith offered and sold unregistered shares of its stock through false statements in press releases, in promotional brochures, in internet website postings and in a Form 10-SB filed with the Commission. The complaint alleges that Great White and Smith raised at least $10.8 million through their fraudulent activities, that Smith diverted approximately $3 million to his own uses and that Great White made a $1 million "dividend" payment as part of a "Ponzi" scheme.

By its disgorgement order, the Court has effectively obtained all Smith's available assets for the benefit of defrauded investors. Earlier, the Commission had obtained other assets of Smith's that he had transferred to his ex-wife, Lourdes Smith.