James L. George, Paul E. Brodhagen, and Michael J. Wright

Litigation Release No. 17994 / February 24, 2003

Securities and Exchange Commission v. James L. George, Paul E. Brodhagen, and Michael J. Wright, Civil Action No. 1:02-CV-3310-HTW (N.D. Ga.)

FEDERAL COURT ENJOINS TWO SALESMEN
IN NATIONWIDE SECURITIES FRAUD

The Securities and Exchange Commission ("Commission") announced today that the Honorable Horace T. Ward, United States District Judge for the Northern District of Georgia, entered Orders of Permanent Injunction and Other Relief Against Defendants Paul E. Brodhagen ("Brodhagen") and Michael J. Wright ("Wright"), restraining and enjoining them from further violations of Sections 5(a), 5(c) and 17(a) of the Securities Act of 1933, Sections 10(b) and 15(a) of the Securities Exchange Act of 1934, and Rule 10b-5 thereunder. Brodhagen and Wright were ordered to pay disgorgement, prejudgment interest and civil penalties in amounts to be resolved upon motion of the Commission at a later date. Brodhagen and Wright consented to the entries of the judgments without admitting or denying any of the allegations of the Commission's complaint.

The Commission's complaint alleged that Brodhagen, Wright and James L. George ("George"), while acting as Facilitators in Tri-Star Investment Group, L.L.C. ("Tri-Star"), fraudulently offered and sold unregistered securities, as part of a larger scheme in which Louis M. Lazorwitz, J. Charles Reives and Tri-Star sold securities interests in Tri-Star to over 900 investors in at least 35 states, and raised $15 million. Tri-Star, through Lazorwitz and Reives, initially represented that Tri-Star would invest in bank debentures and later claimed that it might invest in other international trade opportunities. The complaint also alleges that George, Brodhagen and Wright offered and sold Tri-Star directly and led investors to expect profits of 20% per month in so-called 13-month trading programs, after an initial 90-day waiting period, but that the defendants lacked a reasonable basis to project such profits.

See also L. R. 17918 (January 7, 2003)