SEC v. Stefan H. Benger; SHB Capital, Inc.; Jason B. Meyers; International Capital Financial Resources, LLC; Philip T. Powers; Handler, Thayer & Duggan, LLC, et al., Northern District of Illinois (Feb. 4, 2009) — Complaint

  
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UNITED STATES DISTRICT COURT 

NORTHERN DISTRICT OF ILLINOIS 

EASTERN DIVISION
 
:
 
UNITED STATES SECURITIES :
 
AND EXCHANGE COMMISSION, :
 
:
 
Plaintiff,             :             

:
 
v. : 
: 
STEFAN H. BENGER, SHB CAPITAL, INC., : 
JASON B. MEYERS, INTERNATIONAL  : CASE NO. 
CAPITAL FINANCIAL RESOURCES, LLC, : 
PHILIP T. POWERS, HANDLER, THAYER & : JURY TRIAL DEMANDED 
DUGGAN, LLC, FRANK I. REINSCHREIBER, : 
and GLOBAL FINANCIAL MANAGEMENT, : 
LLC, : 
:            

Defendants,             :             

:
 
CTA WORLDWIDE SERVICES, SA, and : 

STEPHAN             VON             HASE,             :             

:
 
Relief Defendants. : 

_____________________________________________  :
 
COMPLAINT 
Plaintiff United States Securities and Exchange Commission (“Commission”) 
alleges as follows: 
NATURE OF THE ACTION 
1. The Commission brings this emergency law enforcement action to halt an 
ongoing international boiler room scheme run by and through Defendants from their 
residences and offices in Chicago.  Since March 2007, Defendants’ scheme has raised at 
least $44.2 million from more than 1,400 foreign investors, primarily through the sales of 
U.S. penny stocks.  The success of Defendants’ scheme depends on the concealment from 

 
 
 
 
investors of a critical fact: that more than 60% of the investor funds are used to pay sales 
commissions.  
2. Defendants’ scheme is simple.  Defendants Stefan H. Benger, Jason B. 
Meyers, SHB Capital, Inc. and International Capital Financial Resources, LLC 
(collectively, the “Distribution Agent Defendants”) enter into distribution agreements 
with companies that issue shares of “Regulation S stock,” which is stock that is exempt 
from registration with the Commission because it is offered solely to investors who are 
located outside the United States.  In these agreements, the Distribution Agent 
Defendants agree to solicit investors for such stock in exchange for sales commissions 
that exceed 60%.  The Distribution Agent Defendants then retain overseas boiler room 
operators to sell the inventory of such stock through phone solicitations.  The boiler room 
sales agents prey upon less sophisticated foreign investors – including elderly Europeans.  
In their cold calls, the sales agents employ high pressure sales tactics and myriad 
misrepresentations. 
3. After an individual agrees to invest in the boiler room stock, Defendants 
handle the rest of the transaction.  Investors receive a share purchase agreement (“SPA”) 
documenting their purchase with instructions on where to fax their signed SPA, and 
wiring instruction for their investment funds.  In most instances, investors send their 
investment funds and signed SPA’s to Defendants Philip T. Powers, Handler, Thayer & 
Duggan, LLC, Frank I. Reinschreiber and Global Financial Management, LLC 
(collectively, the “Escrow Agent Defendants”).  The Escrow Agent Defendants then 
disburse more than 60% of the investor proceeds to the parties who receive sales 
commissions -- including the boiler room sales agents -- with less than 40% going to the 
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issuers of the stocks.  The Escrow Agent Defendants have disbursed to foreign accounts 
nearly $29 million of the $44.2 million raised from investors in the boiler room scheme.  
After dividing up the investor proceeds in this manner, the Escrow Agent Defendants 
often send share certificates to investors.   
4. Throughout the sales process, investors are deceived about the sales 
commissions.  The boiler room agents oftentimes lie outright about their exorbitant 
commissions to prospective investors, falsely claiming that the agent will only make 
money on the investment if the investor makes money on the investment.  The SPA’s 
provided to investors misrepresent that investors pay no sales commissions.  The SPA’s 
create the misimpression that the investor’s entire investment amount goes to the stock 
issuer, with the investor paying nominal “transaction fees” amounting to 1% or less of the 
amount invested.     
5. By their conduct, Defendants are participating in an unconscionable fraud 
on investors.  The Distribution Agent Defendants, obviously aware of their massive sales 
commissions, have employed investor offering documentation that falsely indicates that 
investors pay no sales commissions.   In addition, Defendants Philip T. Powers, Frank I. 
Reinschreiber and Global Financial Management, LLC have provided knowing and 
substantial assistance to the Distribution Agent Defendants’ fraud.  As escrow agents, 
they receive and process investors’ signed SPA’s, take custody of investor funds (which 
they primarily disburse as exorbitant sales commissions), then issue share certificates to 
investors.  Defendants Philip T. Powers, Frank I. Reinschreiber and Global Financial 
Management, LLC have provided this substantial assistance with either knowledge of the 
material misrepresentations and omissions concerning commissions, or with a reckless 
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disregard of the fraud.  Further, all of the Defendants are acting as securities brokers even 
though they have not registered with the Commission as brokers as they are required to 
do. 
6. The Commission brings this lawsuit to put an immediate halt to 
Defendants’ ongoing misconduct, to prevent further harm to investors, and to hold 
Defendants accountable for their flagrant and repeated violations of the federal securities 
laws. 
JURISDICTION AND VENUE 
7. The Commission brings this action pursuant to Section 20(b) of the 
Securities Act of 1933 [15 U.S.C. § 77t(b)] (“Securities Act”) and Section 21(d)(1) of the 
Securities Exchange Act of 1934[15 U.S.C. §§ 78u (d)(1)] (“Exchange Act”). 
8. This Court has jurisdiction over this action pursuant to Section 22(a) of the 
Securities Act [15 U.S.C. § 77v(a)] and Section 27 of the Exchange Act [15 U.S.C. § 
78aa]. 
9. Venue is proper in this Court pursuant to Section 22 of the Securities Act 
[15 U.S.C. § 77u(a)] and Section 27 of the Exchange Act [15 U.S.C. § 78aa].  
Defendants, directly or indirectly, have made and are making, use of the means and 
instrumentalities of interstate commerce and of the mails in connection with the acts, 
practices and courses of business alleged herein in the Northern District of Illinois.  
THE DEFENDANTS 
10. Stefan H. Benger is a 42 year-old resident of Chicago.  On September 25, 
2008, Benger became a United States citizen.  He is now a dual citizen of Germany and 
the United States.  Throughout his employment history, Benger has been associated with 
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various broker-dealer firms.  According to the Central Records Depository (“CRD”), a 
database compiled and maintained by the Financial Regulatory Authority that provides 
information concerning broker-dealers registered with the Commission and their 
registered representatives, Benger is not currently associated with a registered broker-
dealer.  Benger is currently the president of Defendant SHB Capital, Inc., through which 
he has acted as a distribution agent for several of the boiler room stock offerings. 
11. SHB Capital, Inc. (“SHB Capital”) is a Delaware corporation based in 
Chicago.  On its website, SHB Capital claims to be “one of the premier buyout 
companies,” specializing in “the acquisition and management of small businesses.”  It 
purports to have an investment banking division that helps U.S. and international 
companies become “listed on the NASDAQ, OTCBB or Pink Sheets.”  SHB Capital also 
purports to sell public shell companies and to assist in placing issuer shares with domestic 
and international investors.  SHB Capital is not registered with the Commission as a 
broker-dealer. SHB Capital has actively recruited Regulation S sales agents through its 
website.  SHB Capital, through Defendant Benger, has acted as a distribution agent for 
several of the boiler room stock offerings.  
12. Jason B. Meyers is a 48 year-old resident of Chicago.  From 1988 
through November 2000, Meyers was associated with various securities and commodities 
firms.  According to CRD records, Meyers is not currently associated with a registered 
broker-dealer.  Meyers previously was a vice president of A-Street Capital, a Chicago-
based firm that touted its ability to “arrange the sale of Reg S exempt common stock to 
retail investors in Europe and Asia through our affiliated regulated broker-dealers.”  
Meyers is currently the president of Defendant International Capital Financial Resources, 
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LLC, through which he has acted as a distribution agent for several of the boiler room 
stock offerings. 
13. International Capital Financial Resources, LLC (“International 
Capital”) is an Illinois corporation with its principal place of business listed as Meyers’ 
personal residence in Chicago.  On its website, International Capital claims that it is a 
“leading provider of specialized and traditional investment banking services to micro, 
small, and mid-cap companies.”  International Capital’s website also claims that it has 
“the international contacts to place Regulation S offerings.”  Through Defendant Meyers, 
it has acted as a distribution agent for several of the boiler room stock offerings.  
International Capital is not registered with the Commission as a broker-dealer. 
14. Philip T. Powers is a 61 year-old resident of Chicago and a licensed 
attorney in the State of Illinois.  Powers currently holds the position of “senior counsel” 
at Defendant Handler, Thayer & Duggan, LLC.  According to the firm’s website, he 
focuses his practice on “business, corporate and securities law with an emphasis on 
domestic and international private equity formation and related transactions.”  Powers’ 
biography on the firm’s website also states that he has prior experience as a “general 
counsel to broker-dealers and other financial services firms, focusing on domestic 
regulatory compliance.”  In addition to his position with Handler Thayer, Powers is a 
principal of Defendant Global Financial Management, LLC.  Through these affiliations, 
Powers has acted as an escrow agent for several of the issuers of the stock sold through 
the boiler room scheme.  According to CRD records, Powers is not currently associated 
with a registered broker-dealer.  Prior to joining Handler Thayer, Powers was chief 
administrative officer and general counsel of A-Street Capital.   
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15. Handler, Thayer & Duggan, LLC (“Handler Thayer”), an Illinois 
corporation based in Chicago, is a law firm of approximately 20 attorneys specializing in 
business and corporate law services.  Handler Thayer, through Powers, has acted as an 
escrow agent for several of the issuers of stock sold through the boiler room scheme.  
Handler Thayer is not registered with the Commission as a broker-dealer. 
16. Frank I. Reinschreiber is a 52 year-old resident of Chicago.  
Reinschreiber is currently a principal of Defendant Global Financial Management, LLC, 
through which he has acted as an escrow agent for several of the issuers of stock sold 
through the boiler room scheme.  Global Financial Management, LLC’s website states 
that Reinschreiber has thirty years of experience in accounting, tax and financial 
planning.  According to Reinschreiber’s biography on Global Financial Management, 
LLC’s website, he was formerly the CFO of A-Street Capital.  According to CRD 
records, Reinschreiber is not associated with a registered broker-dealer. 
17. Global Financial Management, LLC (“Global Financial”) is an Illinois 
corporation based in Chicago.  On its website, Global Financial portrays itself as a 
“finance management company” offering “a complete line of escrow services including 
the ability to receive and send funds in any foreign currency.”  Defendants Reinschreiber 
and Powers control Global Financial, which has acted as an escrow agent for several of 
the issuers of stock sold through the boiler room scheme.  Global Financial is not 
registered with the Commission as a broker-dealer. 
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RELIEF DEFENDANTS 

18. CTA Worldwide Services, SA (“CTA Worldwide”) has received more 
than $2.2 million of investor proceeds in an account held at First Caribbean International 
Bank in Nassau, Bahamas. 
19. Stephan Gottfried von Hase (“von Hase”) has received more than 
$292,000 of investor proceeds in an account held at the Berner Kantonalbank in Berne 
and Biel, Switzerland.  Von Hase is currently the president of Marblehead Financial 
Group, a Chicago-based firm registered with the State of Illinois as an investment 
adviser.  Von Hase maintains a residence in Chicago.  According to CRD records, from 
January 1998 until November 2001 von Hase was associated with the Chicago office of 
Professional Market Brokerage, Inc.  During the time von Hase was associated with 
Professional Market Brokerage, Benger was the chief executive officer of the firm.  
According to CRD records, from May 1997 until February 2001 von Hase was a 
managing director of CTA Worldwide.  As recently as July 2008, von Hase maintained 
an e-mail address associated with CTA Worldwide.  
FACTS 

The Structure of the Scheme
 
20. Defendants’ scheme involves the offer and sale of stock in at least eight 
penny stock issuers: China Voice Holding Corp., Integrated Biodiesel Industries Ltd., 
Biomoda, Inc., Pharma Holdings Inc., World Energy Solutions, Inc., Revolutions 
Medical Corp., Earthsearch Communications, Inc., and Essential Innovations Technology 
Corp. (together the “Issuers”).  All but one of these companies are based in the United 
States.  With the exception of Integrated Biodiesel and Pharma, the stock for each of the 
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Issuers is quoted through the OTC Bulletin Board or “Pink Sheets.”  The stock of 
Integrated Biodiesel and Pharma is not yet listed on any stock exchange or quoted 
through a service like the OTC Bulletin Board.  The stock of most if not all of the Issuers 
trades at prices under $5 per share and otherwise meets the definition of a “penny stock” 
under the federal securities laws. 
21. SHB Capital and International Capital, through Benger and Meyers, have 
entered into agreements to distribute the shares of the Issuers.  These distributions purport 
to comply with Regulation S of the Securities Act, which provides an exemption for 
securities offerings in which (among other things) all of the investors are located outside 
the United States.   
22. SHB Capital and International Capital, through Benger and Meyers, have 
retained sales agents located outside the United States to make “cold calls” to individuals 
soliciting investments in the Issuers’ stock.  Many of the sales agents retained by the 
Distribution Agent Defendants work for firms that appear on a warning list -- compiled 
and published by the United Kingdom’s Financial Services Authority -- of firms 
unauthorized to do business in the United Kingdom, and which are suspected of boiler 
room activity.  Several of the agents retained by the Distribution Agent Defendants 
falsely claim to work for legitimate brokerage firms operating in the United Kingdom.   
23. Handler Thayer and Global Financial, through Powers and Reinschreiber, 
have agreed to act as escrow agents for the distributions of the Issuers’ stock.  The 
escrow agents receive and process investor SPA’s; receive investor funds into escrow 
accounts; disburse investor funds to the Issuers and to parties receiving sales 
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commissions; and send share certificates to investors to finalize their purchases of Issuer 
stock.  In exchange, the escrow agents receive a share of the commission payments.  
24. The SPA is generally the only documentation provided to investors in 
connection with their purchases of the Issuers’ stock.  The SPA’s provided to investors in 
each of the Issuers are substantially similar to one another. 
China Voice: An Illustration of the Scheme 
25. The offer and sale of stock in China Voice illustrates how Defendants’ 
scheme operates in practice.  In early 2007, China Voice entered into distribution 
agreements with SHB Capital, International Capital, and one other entity.  The 
distribution agreements designate Benger and Meyers as the authorized signatories on 
behalf of distribution agents SHB Capital and International Capital, respectively.    
26. Each distribution agreement calls for the distribution agent to solicit 
foreign investors for China Voice’s Regulation S offering of common stock in exchange 
for commissions.  The distribution agreements include an attachment allocating investor 
proceeds from the offering.  According to China Voice’s distribution agreements with 
SHB Capital and International Capital, China Voice receives a mere 34% of the investor 
proceeds; the distribution agent and escrow agent collectively receive 66% of the 
proceeds. 
27. An exemplar of the SPA is attached to the SHB Capital distribution 
agreement with China Voice and to the International Capital agreement with China 
Voice.  These exemplars are substantially similar to the SPA’s provided to individuals 
who have invested in China Voice’s Regulation S offering.   
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28. On the first page of the SPA for China Voice, there is a grid presenting 
“Transaction Information – Price and Shares.”  This is an example of such a grid: 
29. The first page of a SPA exemplar states that “[a] certificate representing 
the Shares will be issued by [China Voice] within 21 days of acceptance of this 
agreement and will be deposited with the Escrow Agent for transmittal to the [investor] 
upon transfer of the Total Consideration to [China Voice].” (emphasis added).   
30. In the body of an exemplar SPA, the following provision appears: 
Brokers or Finders.  No person has or will have, as a result of 
transactions contemplated by this Agreement any right, interest or 
valid claim against or upon [the investor] for any commission, fee 
or other compensation as a finder or broker because of any act or 
omission by [China Voice], and/or its agents. 
31. The exemplar SPA makes no disclosure of the commissions exceeding 
60%. 
32. Rather, the exemplar SPAs represent that the transaction fees will be 
limited to a nominal fee of $50 or “1% of cost of shares to cover certificate and mailing 
costs.” 
33. The China Voice distribution agreements also include an escrow 
agreement outlining the role of the escrow agent in the Regulation S offering.  SHB 
Capital’s distribution agreement provides for Handler Thayer to act as escrow agent.  
Handler Thayer’s escrow agreement names Powers as the law firm’s authorized agent for 
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purposes of the distribution agreement.  The distribution and escrow agreements provide 
that Handler Thayer will obtain custody of investor funds and SPA’s; distribute investor 
proceeds according to the terms of the distribution agreement; maintain China Voice 
share certificates; and distribute share certificates to investors.   
34. International Capital’s distribution agreement with China Voice designates 
Equinox Administration, Inc. (“Equinox”) as International Capital’s escrow agent.  At the 
time that International Capital executed its distribution agreement with China Voice, 
Equinox was a Florida-based company controlled by Paul Gunter.  In March 2008, 
Gunter was arrested by federal law enforcement agents.  Gunter was subsequently 
indicted on mail and wire fraud charges by a grand jury convened by the United States 
Attorney’s Office for the Middle District of Florida.  The charges against Gunter, which 
are still pending, relate to his role in various Regulation S and “pre-IPO” offerings of 
penny stocks.  On information and belief, following Gunter’s arrest, Global Financial 
stepped in to replace Equinox as International Capital’s designated escrow agent. 
35. To sell Regulation S shares of China Voice, the Distribution Agent 
Defendants retain foreign-based boiler room sales agents.  The sales agents pitching 
China Voice typically claim to work for established UK-based brokerage houses.  They 
employ high pressure sales pitches.  At least one sales agent bullied an investor by 
threatening to sue when the investor decided not to purchase the full amount of shares 
they initially discussed.   
36. The sales agents make material misrepresentations and omissions to 
convince individuals to invest in China Voice.  One sales agent procured an investment 
by falsely claiming that China Voice’s stock price was about to rise sharply in the wake 
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of the company’s selection as the 2008 Olympic Games’ chief network communication 
provider. 
37. The sales agents never provide China Voice investors with truthful 
disclosures of the commissions paid by the investors.  When prospective investors have 
asked about commissions, the sales agents have claimed that the investor only pays a 
commission if the investor sells his shares of China Voice for a profit.   
38. Once an individual agrees to invest in China Voice, the investor receives a 
SPA for review and signature.  Aside from the share certificate, the SPA is generally the 
only document provided to an investor reflecting the investment in China Voice.  The 
SPA’s provided to investors are substantially similar to the form SPA’s attached to the 
China Voice distribution agreements with SHB Capital and International Capital.  The 
SPA instructs the investor to wire the investment funds to a particular U.S. account in the 
name of the designated escrow agent.  It also instructs the investor to fax the first page 
and the executed signature page of the agreement to a particular U.S. phone number.  
Neither the sales agents nor the SPA’s disclose the name of the party receiving the fax.  
In fact, the fax numbers were established by one or more of the Defendants through an e-
fax service.  Once an investor faxes his signed SPA to the designated fax number, the e-
fax service e-mails it one or more of the Defendants.   
39. The China Voice SPA’s direct investors to wire their investment funds to 
U.S. accounts maintained in the name of the designated escrow agent.  Originally, 
Equinox was the designated escrow agent for International Capital’s China Voice 
investors.  Within weeks after Gunter’s arrest, Global Financial stepped in to take his 
place.  As a result, Equinox, Global Financial and Handler Thayer have each received 
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China Voice investor funds.  In regards to the China Voice offering, the Handler Thayer 
escrow accounts are under the control of Powers and the Global Financial escrow 
accounts are under the control of Powers and Reinschreiber.  Since March 2007, the 
escrow agents have received at least $6.9 million in investor funds from China Voice 
investors. 
40. The escrow agents periodically disburse investor proceeds to China Voice 
and to numerous accounts for the payment of sales commissions.  Most of the accounts to 
which Powers and Reinschreiber wire commission payments are offshore, located in 
countries known for their strong bank secrecy laws, such as Switzerland and Cyprus.   
41. After receiving a China Voice investor’s proceeds, the escrow agent 
finalizes the transaction by causing a share certificate to be issued to the investor.  Some 
China Voice investors received their share certificates with an accompanying cover letter 
on Handler Thayer stationery signed by Powers as “Escrow Agent.”  The letter recites the 
number of shares purchased by the investor, but makes no mention of sales commissions.  
On information and belief, Global Financial Management has sent investors their China 
Voice share certificates with a cover letter falsely indicating that the letters were sent by 
China Voice.   These letters, like those sent by Powers, omit any disclosure of the 
massive sales commissions. 
Other Boiler Room Offerings 
42. The offer and sale of stock in the other Issuers follows the pattern 
illustrated by the China Voice offering.  Investors receive high pressure solicitation 
phone calls from boiler room sales agents regarding the stock of the Issuer.  Although the 
solicitations vary from investor to investor and from agent to agent, they uniformly 
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involve typical boiler room sales tactics targeting elderly British and European citizens.   
The boiler room operators generally use high pressure sales pitches to create a false sense 
of urgency about the investment.  They frequently present the Issuer’s stock as an 
opportunity to obtain high returns in a short period of time.  In some instances, they urge 
prospective investors to liquidate savings and legitimate investments in order to purchase 
the Issuer’s stock.  In other instances, they purport to offer “discounted pricing” on the 
Issuer’s stock, which they claim they can offer because of their firm’s bulk purchase of 
such shares. 
43. After an individual agrees to invest in the stock of an Issuer, he is 
provided with a SPA similar to the SPA provided to China Voice investors.  The SPA’s 
falsely state that investors pay no commissions; falsely assert that the investor’s “Total 
Consideration” is provided to the Issuer or maintained on the Issuer’s behalf; and falsely 
represent that  “transaction fees” are limited to no more than 1% of the investment.  On 
information and belief, these SPA’s are provided to investors through the Distribution 
Agent Defendants. 
44. As with China Voice, investors in the other Issuers are told to fax the first 
page and executed signature page of their SPA’s to certain phone numbers within the 
United States.  There is generally no individual or entity associated with the fax numbers.  
In fact, the fax numbers are established by one or more of the Defendants through an e-
fax service that converts investor faxes into PDF’s that are automatically e-mailed to the 
e-mail addresses designated by the customer, typically one or more of the Defendants.  
45. Investors in the stock offered by the Issuers other than China Voice have 
wire-transferred their investment funds to bank and brokerage accounts maintained in the 
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names of the designated escrow agents, Handler Thayer and Global Financial, and 
controlled by Powers and Reinschreiber. The escrow agents, through Powers and 
Reinschreiber, are then responsible for the disbursement of investor funds to the Issuers 
and the various parties receiving commissions. 
46. The escrow agents regularly send share certificates for Issuer stock to the 
investors.  In many cases, the share certificate is accompanied by a letter from the escrow 
agent.  Powers regularly sends share certificates to investors with a cover letter on 
Handler Thayer stationery and signed by Powers as “Escrow Agent.”  On information 
and belief, Global Financial Management also sends share certificates to investors with a 
letter that falsely indicates that it comes from the Issuer.  The letters sent to investors 
make no disclosure of the commissions unknowingly paid by the investors.   
47. The disbursement of investor proceeds for the other Issuers is substantially 
similar to the breakdown of investor proceeds reflected in the China Voice distribution 
agreements.  The escrow agents’ bank and brokerage account records reflect that more 
than 60% of the investor proceeds pay sales commissions.  These payments are generally 
made to bank accounts maintained in countries with strong bank secrecy laws.  Less than 
40% of investor proceeds are directed to the Issuers.   
The Relief Defendants’ Receipt of Ill-Gotten Gains 
48. Von Hase and CTA Worldwide have each received a significant sum of 
investor proceeds through payment made by the Escrow Agent Defendants.  These 
investor proceeds represent undisclosed sales commissions from the boiler room scheme.  
Neither von Hase nor CTA Worldwide has any legitimate claim to the funds that they 
have received, nor have they provided any services to justify the receipt of such funds.  
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The Scheme Is Ongoing 
49.  Since March 2007, Defendants’ scheme has raised at least $44.2 million 
from more than 1,400 investors.  On information and belief, Defendants began their 
scheme earlier than March 2007, involving more stocks than those of the Issuers set forth 
above. 
50. This scheme is ongoing.  Individuals continue to receive solicitation calls 
and continue to invest their funds in stocks sold by the Distribution Agent Defendants.  In 
November and December 2008 alone, the scheme raised at least $1.2 million from 
unsuspecting investors. 
COUNT I 
VIOLATIONS OF SECTION 17(A)(1) OF THE SECURITIES ACT 
[15 U.S.C. § 77q(a)(1)] 
(Against Defendants Benger, Meyers, 
SHB Capital and International Capital) 
51. Paragraphs 1 through 50 are realleged and incorporated by reference. 
52. Benger, Meyers, SHB Capital and International Capital, in the offer or sale 
of securities, by the use of the means and instruments of transportation or communication 
in interstate commerce or by use of the mails, singularly or in concert, directly or 
indirectly employed devises, schemes or artifices to defraud.   
53. The shares of the Issuers are “securities” as that term is defined in Section 
2(a)(1) of the Securities Act and Section 3(a)(10) of the Exchange Act [15 U.S.C. §§ 
77b(a)(1) and 78(b)(10)]. 
54. Benger, Meyers, SHB Capital and International Capital knowingly or 
recklessly engaged in the fraudulent conduct described above. 
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55. By reason of the foregoing, Benger, Meyers, SHB Capital and 
International Capital violated Section 17(a)(1) of the Securities Act [15 U.S.C. § 
77q(a)(1)]. 
COUNT II 
VIOLATIONS OF SECTIONS 17(A)(2)  
AND 17(A)(3) OF THE SECURITIES ACT 
[15 U.S.C. §§ 77q(a)(2) and 77q(a)(3)] 
(Against Defendants Benger, Meyers, 
SHB Capital and International Capital) 
56. Paragraphs 1 through 50 are realleged and incorporated by reference. 
57. Benger, Meyers, SHB Capital and International Capital, in the offer or sale 
of securities, by the use of the means or instruments of transportation or communication 
in interstate commerce or by use of the mails, directly or indirectly, singularly or in 
concert, have obtained money or property by means of untrue statements of material fact 
or omitted to state material facts necessary in order to make the statements made, in light 
of the circumstances under which they were made, not misleading; or engaged in a 
transaction, practice, or course of business which operated or would operate as a fraud or 
deceit upon purchaser of securities. 
58. The shares of the Issuers are “securities” as that term is defined in Section 
2(a)(1) of the Securities Act and Section 3(a)(10) of the Exchange Act [15 U.S.C. §§ 
77b(a)(1) and 78(b)(10)]. 
59. Benger, Meyers, SHB Capital and International Capital knowingly or 
recklessly engaged in the fraudulent conduct described above. 
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60. By reason of the foregoing, Benger, Meyers, SHB Capital and 
International Capital violated Sections 17(a)(2) and 17(a)(3) of the Securities Act [15 
U.S.C. §§ 77q(a)(2) and 77q(a)(3)]. 
COUNT III 
VIOLATIONS OF SECTION 10(B) OF THE 
EXCHANGE ACT AND RULE 10B-5 THEREUNDER 
[15 U.S.C. § 78j(b) & 17 C.F.R. § 240.10b-5] 
(Against Defendants Benger, Meyers, SHB Capital and International Capital) 
61. Paragraphs 1 through 50 are realleged and incorporated by reference. 
62. Benger, Meyers, SHB Capital and International Capital, in connection 
with the purchase or sale of securities, directly or indirectly, singularly or in concert, by 
the use of the means or instrumentalities of interstate commerce or of the mails: (a) used 
or employed a device, scheme, or artifice to defraud; (b) made untrue statements of 
material fact or omitted to state material facts necessary in order to make the statements 
made, in light of the circumstances under which they were made, not misleading; and (c) 
engaged in acts, practices, or courses of business which operated or would operate as a 
fraud and deceit upon the purchasers and prospective sellers of such securities. 
63. Benger, Meyers, SHB Capital and International Capital knowingly or 
recklessly engaged in the fraudulent conduct described above. 
64. The shares of the Issuers are “securities” as that term is defined in Section 
2(a)(1) of the Securities Act and Section 3(a)(10) of the Exchange Act [15 U.S.C. §§ 
77b(a)(1) and 78(b)(10)]. 
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65. By reason of the foregoing, Benger, Meyers, SHB Capital and 
International Capital violated Section 10(b) of the Exchange Act [15 U.S.C. § 78j(b)] and 
Rule 10b-5 promulgated thereunder [17 C.F.R. § 240.10b-5]. 
COUNT IV 
AIDING AND ABETTING VIOLATIONS OF SECTION 10(B) OF THE  

EXCHANGE ACT AND RULE 10B-5 THEREUNDER 

[15 U.S.C. § 78j(b) & 17 C.F.R. § 240.10b-5] 

(Against Defendants Powers, Reinschreiber and Global Financial)
 
66. Paragraphs 1 through 50 are realleged and incorporated by reference. 
67. Benger, Meyers, SHB Capital and International Capital, have violated 
Section 10(b) of the Exchange Act [15 U.S.C. § 78j(b)] and Rule 10b-5 promulgated 
thereunder [17 C.F.R. § 240.10b-5]. 
68. By their conduct described herein, Powers, Reinschreiber and Global 
Financial each provided knowing and substantial assistance to Benger, Meyers, SHB 
Capital and International Capital in their unlawful conduct alleged in paragraphs 1 
through 50 above. 
69. Powers, Reinschreiber and Global Financial aided and abetted Benger, 
Meyers, SHB Capital and International Capital’s violations of Section 10(b) of the 
Exchange Act and Rule 10b-5 thereunder. 
COUNT V 
VIOLATIONS OF SECTION 15(A) OF THE EXCHANGE ACT 

[15 U.S.C. § 77o(a)]
 
(Against Defendants Benger, Meyers, Powers, Reinschreiber,  

SHB Capital, International Capital, Global Financial,  

and Handler Thayer)
 
70. Paragraphs 1 through 50 are realleged and incorporated by reference. 
20
 

 
 
 
 
 
  
 
 
 
 
 
 
71. Defendants Benger, Meyers, Powers, Reinschreiber, SHB Capital, 
International Capital, Global Financial, and Handler Thayer, by the conduct described 
above, directly or indirectly, singularly or in concert, made use of the mails or the means 
or instrumentalities of interstate commerce to effect transactions in, or to induce or 
attempt to induce, the purchase or sale of securities, without registering with the 
Commission as a broker or dealer.  
72. The shares of the Issuers are “securities” as that term is defined in Section 
2(a)(1) of the Securities Act and Section 3(a)(10) of the Exchange Act [15 U.S.C. §§ 
77b(a)(1) and 78(b)(10)]. 
73. By engaging in the conduct described in above, Benger, Meyers, Powers, 
Reinschreiber, SHB Capital, International Capital, Global Financial, and Handler Thayer, 
violated Section 15(a) of the Exchange Act [15 U.S.C. § 78o(a)]. 
COUNT VI
 
EQUITABLE CLAIM WITH RESPECT TO RELIEF DEFENDANTS  

(Regarding Relief Defendants 
CTA Worldwide Services, SA
 
and Stephan Gottfried Van Hase)
 
74. Paragraphs 1 through 50 are realleged and incorporated by reference. 
75. Relief Defendants, directly or indirectly, received funds or benefited from 
the use of such funds, which are the proceeds, or are traceable to the proceeds, of the 
unlawful activity alleged above. 
76. Relief Defendants have no legitimate claim to these funds that they 
received or from which they otherwise benefited, directly or indirectly. 
77. Relief Defendants have been unjustly enriched by their direct or indirect 
receipt of or benefit from investor funds.      
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78. The Commission is entitled to an order requiring Relief Defendants to 
disgorge all of the proceeds of investor funds that they received or from which they 
benefited, either directly or indirectly. 
REQUESTS FOR RELIEF 
WHEREFORE, the Commission requests that this Court: 
A. Find that each Defendant committed the violations alleged herein; 
B. Enter Orders of Permanent Injunction as to each Defendant, in a form 
consistent with Rule 65(d) of the Federal Rules of Civil Procedure, restraining and 
enjoining: 
1.	 Benger, Meyers, SHB Capital and International Capital, from 
violating Section 17(a)(1), (2) and (3) of the Securities Act, 
Sections 10(b) and 15(a) of the Exchange Act and Rule 10b-5 
promulgated thereunder;  
2.	 Powers, Reinschreiber and Global Financial from aiding and 
abetting violations of Section 10(b) of the Exchange Act and Rule 
10b-5 thereunder, and from violating Section 15(a) of the 
Exchange Act; and 
3.	 Handler Thayer from violating Section 15(a) of the Exchange Act. 
C. Enter an Order requiring Defendants to disgorge all ill-gotten gains 
resulting from their participation in the conduct described above, including pre-judgment 
interest.  
D. Enter an Order requiring Defendants to pay civil penalties pursuant to 
Section 20(d) of the Securities Act and Section 21(d)(3) of the Exchange Act [15 U.S.C. 
§§ 77t(d) and 78u(d)(3)]. 
E. Enter an Order barring Defendants from participating in any offering of 
penny stock pursuant to 20(g) of the Securities Act and Section 21(d)(6) of the Exchange 
Act [15 U.S.C. §§ 77t(g) and 78u(d)(6)]. 
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F. Enter an Order requiring Relief Defendants to disgorge all funds they 
received from Defendants’ ill-gotten gains or by which they have been unjustly enriched, 
including all investor funds transferred to them or used for their benefit, including 
prejudgment interest thereon.  
G. Enter an Order appointing a Receiver over Benger, Meyers, Reinschreiber, 
Powers, SHB Capital, International Capital, Global Financial and other entities under 
these Defendants’ ownership or control. 
H. Grant such other and further equitable relief as this Court deems 
appropriate and necessary. 
JURY TRIAL DEMAND 
The Commission requests a trial by jury.   
Dated: February 3, 2009 
UNITED STATES SECURITIES AND 
EXCHANGE COMMISSION 
_________________________________            
                                                                        By:            One            of            its            Attorneys            
Jonathan S. Polish (Illinois Bar No. 6237890) 

John E. Birkenheier (Illinois Bar No. 6270993) 

John J. Sikora, Jr. (Illinois Bar No. 6217330) 

Kent W. McAllister (Northern District of Illinois Bar No. 90785656) 

Eric A. Celauro (Illinois Bar No. 6274684) 

UNITED STATES SECURITIES  
AND EXCHANGE COMMISSION 
175 W. Jackson Blvd.  
Suite 900 
Chicago, Illinois 60604 
(312)            353-6884            
23
 

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UNITED STATES DISTRICT COURT 

NORTHERN DISTRICT OF ILLINOIS 


EASTERN DIVISION
 

:
 
UNITED STATES SECURITIES :
 
AND EXCHANGE COMMISSION, :
 

:
 
Plaintiff, : 


:
 
v. : 

: 
STEFAN H. BENGER, SHB CAPITAL, INC., : 
JASON B. MEYERS, INTERNATIONAL  : CASE NO. 
CAPITAL FINANCIAL RESOURCES, LLC, : 
PHILIP T. POWERS, HANDLER, THAYER & : JURY TRIAL DEMANDED 
DUGGAN, LLC, FRANK I. REINSCHREIBER, : 
and GLOBAL FINANCIAL MANAGEMENT, : 
LLC,  :  

: 

Defendants,  : 


:
 
CTA WORLDWIDE SERVICES, SA, and : 

STEPHAN VON HASE,  : 


:
 
Relief Defendants. : 


_____________________________________________  :
 

COMPLAINT 

Plaintiff United States Securities and Exchange Commission (“Commission”) 

alleges as follows: 

NATURE OF THE ACTION 

1. The Commission brings this emergency law enforcement action to halt an 

ongoing international boiler room scheme run by and through Defendants from their 

residences and offices in Chicago. Since March 2007, Defendants’ scheme has raised at 

least $44.2 million from more than 1,400 foreign investors, primarily through the sales of 

U.S. penny stocks. The success of Defendants’ scheme depends on the concealment from 

owensa1
Typewritten Text
FILED: FEBRUARY 3, 2009
09CV676
JUDGE LEFKOW
MAGISTRATE JUDGE COLE
AO



 

 

 

 

investors of a critical fact: that more than 60% of the investor funds are used to pay sales 

commissions.  

2. Defendants’ scheme is simple.  Defendants Stefan H. Benger, Jason B. 

Meyers, SHB Capital, Inc. and International Capital Financial Resources, LLC 

(collectively, the “Distribution Agent Defendants”) enter into distribution agreements 

with companies that issue shares of “Regulation S stock,” which is stock that is exempt 

from registration with the Commission because it is offered solely to investors who are 

located outside the United States.  In these agreements, the Distribution Agent 

Defendants agree to solicit investors for such stock in exchange for sales commissions 

that exceed 60%.  The Distribution Agent Defendants then retain overseas boiler room 

operators to sell the inventory of such stock through phone solicitations.  The boiler room 

sales agents prey upon less sophisticated foreign investors – including elderly Europeans.  

In their cold calls, the sales agents employ high pressure sales tactics and myriad 

misrepresentations. 

3. After an individual agrees to invest in the boiler room stock, Defendants 

handle the rest of the transaction. Investors receive a share purchase agreement (“SPA”) 

documenting their purchase with instructions on where to fax their signed SPA, and 

wiring instruction for their investment funds.  In most instances, investors send their 

investment funds and signed SPA’s to Defendants Philip T. Powers, Handler, Thayer & 

Duggan, LLC, Frank I. Reinschreiber and Global Financial Management, LLC 

(collectively, the “Escrow Agent Defendants”).  The Escrow Agent Defendants then 

disburse more than 60% of the investor proceeds to the parties who receive sales 

commissions -- including the boiler room sales agents -- with less than 40% going to the 

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issuers of the stocks. The Escrow Agent Defendants have disbursed to foreign accounts 

nearly $29 million of the $44.2 million raised from investors in the boiler room scheme.  

After dividing up the investor proceeds in this manner, the Escrow Agent Defendants 

often send share certificates to investors.   

4. Throughout the sales process, investors are deceived about the sales 

commissions.  The boiler room agents oftentimes lie outright about their exorbitant 

commissions to prospective investors, falsely claiming that the agent will only make 

money on the investment if the investor makes money on the investment.  The SPA’s 

provided to investors misrepresent that investors pay no sales commissions.  The SPA’s 

create the misimpression that the investor’s entire investment amount goes to the stock 

issuer, with the investor paying nominal “transaction fees” amounting to 1% or less of the 

amount invested.     

5. By their conduct, Defendants are participating in an unconscionable fraud 

on investors. The Distribution Agent Defendants, obviously aware of their massive sales 

commissions, have employed investor offering documentation that falsely indicates that 

investors pay no sales commissions.  In addition, Defendants Philip T. Powers, Frank I. 

Reinschreiber and Global Financial Management, LLC have provided knowing and 

substantial assistance to the Distribution Agent Defendants’ fraud.  As escrow agents, 

they receive and process investors’ signed SPA’s, take custody of investor funds (which 

they primarily disburse as exorbitant sales commissions), then issue share certificates to 

investors.  Defendants Philip T. Powers, Frank I. Reinschreiber and Global Financial 

Management, LLC have provided this substantial assistance with either knowledge of the 

material misrepresentations and omissions concerning commissions, or with a reckless 

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disregard of the fraud. Further, all of the Defendants are acting as securities brokers even 

though they have not registered with the Commission as brokers as they are required to 

do. 

6. The Commission brings this lawsuit to put an immediate halt to 

Defendants’ ongoing misconduct, to prevent further harm to investors, and to hold 

Defendants accountable for their flagrant and repeated violations of the federal securities 

laws. 

JURISDICTION AND VENUE 

7. The Commission brings this action pursuant to Section 20(b) of the 

Securities Act of 1933 [15 U.S.C. § 77t(b)] (“Securities Act”) and Section 21(d)(1) of the 

Securities Exchange Act of 1934[15 U.S.C. §§ 78u (d)(1)] (“Exchange Act”). 

8. This Court has jurisdiction over this action pursuant to Section 22(a) of the 

Securities Act [15 U.S.C. § 77v(a)] and Section 27 of the Exchange Act [15 U.S.C. § 

78aa]. 

9. Venue is proper in this Court pursuant to Section 22 of the Securities Act 

[15 U.S.C. § 77u(a)] and Section 27 of the Exchange Act [15 U.S.C. § 78aa].  

Defendants, directly or indirectly, have made and are making, use of the means and 

instrumentalities of interstate commerce and of the mails in connection with the acts, 

practices and courses of business alleged herein in the Northern District of Illinois.  

THE DEFENDANTS 

10. Stefan H. Benger is a 42 year-old resident of Chicago. On September 25, 

2008, Benger became a United States citizen.  He is now a dual citizen of Germany and 

the United States.  Throughout his employment history, Benger has been associated with 

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various broker-dealer firms.  According to the Central Records Depository (“CRD”), a 

database compiled and maintained by the Financial Regulatory Authority that provides 

information concerning broker-dealers registered with the Commission and their 

registered representatives, Benger is not currently associated with a registered broker-

dealer. Benger is currently the president of Defendant SHB Capital, Inc., through which 

he has acted as a distribution agent for several of the boiler room stock offerings. 

11. SHB Capital, Inc. (“SHB Capital”) is a Delaware corporation based in 

Chicago. On its website, SHB Capital claims to be “one of the premier buyout 

companies,” specializing in “the acquisition and management of small businesses.”  It 

purports to have an investment banking division that helps U.S. and international 

companies become “listed on the NASDAQ, OTCBB or Pink Sheets.”  SHB Capital also 

purports to sell public shell companies and to assist in placing issuer shares with domestic 

and international investors.  SHB Capital is not registered with the Commission as a 

broker-dealer. SHB Capital has actively recruited Regulation S sales agents through its 

website. SHB Capital, through Defendant Benger, has acted as a distribution agent for 

several of the boiler room stock offerings.  

12. Jason B. Meyers is a 48 year-old resident of Chicago.  From 1988 

through November 2000, Meyers was associated with various securities and commodities 

firms.  According to CRD records, Meyers is not currently associated with a registered 

broker-dealer. Meyers previously was a vice president of A-Street Capital, a Chicago-

based firm that touted its ability to “arrange the sale of Reg S exempt common stock to 

retail investors in Europe and Asia through our affiliated regulated broker-dealers.”  

Meyers is currently the president of Defendant International Capital Financial Resources, 

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LLC, through which he has acted as a distribution agent for several of the boiler room 

stock offerings. 

13. International Capital Financial Resources, LLC (“International 

Capital”) is an Illinois corporation with its principal place of business listed as Meyers’ 

personal residence in Chicago. On its website, International Capital claims that it is a 

“leading provider of specialized and traditional investment banking services to micro, 

small, and mid-cap companies.”  International Capital’s website also claims that it has 

“the international contacts to place Regulation S offerings.”  Through Defendant Meyers, 

it has acted as a distribution agent for several of the boiler room stock offerings.  

International Capital is not registered with the Commission as a broker-dealer. 

14. Philip T. Powers is a 61 year-old resident of Chicago and a licensed 

attorney in the State of Illinois.  Powers currently holds the position of “senior counsel” 

at Defendant Handler, Thayer & Duggan, LLC.  According to the firm’s website, he 

focuses his practice on “business, corporate and securities law with an emphasis on 

domestic and international private equity formation and related transactions.”  Powers’ 

biography on the firm’s website also states that he has prior experience as a “general 

counsel to broker-dealers and other financial services firms, focusing on domestic 

regulatory compliance.”  In addition to his position with Handler Thayer, Powers is a 

principal of Defendant Global Financial Management, LLC.  Through these affiliations, 

Powers has acted as an escrow agent for several of the issuers of the stock sold through 

the boiler room scheme.  According to CRD records, Powers is not currently associated 

with a registered broker-dealer.  Prior to joining Handler Thayer, Powers was chief 

administrative officer and general counsel of A-Street Capital.   

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15. Handler, Thayer & Duggan, LLC (“Handler Thayer”), an Illinois 

corporation based in Chicago, is a law firm of approximately 20 attorneys specializing in 

business and corporate law services. Handler Thayer, through Powers, has acted as an 

escrow agent for several of the issuers of stock sold through the boiler room scheme.  

Handler Thayer is not registered with the Commission as a broker-dealer. 

16. Frank I. Reinschreiber is a 52 year-old resident of Chicago.  

Reinschreiber is currently a principal of Defendant Global Financial Management, LLC, 

through which he has acted as an escrow agent for several of the issuers of stock sold 

through the boiler room scheme.  Global Financial Management, LLC’s website states 

that Reinschreiber has thirty years of experience in accounting, tax and financial 

planning. According to Reinschreiber’s biography on Global Financial Management, 

LLC’s website, he was formerly the CFO of A-Street Capital.  According to CRD 

records, Reinschreiber is not associated with a registered broker-dealer. 

17. Global Financial Management, LLC (“Global Financial”) is an Illinois 

corporation based in Chicago. On its website, Global Financial portrays itself as a 

“finance management company” offering “a complete line of escrow services including 

the ability to receive and send funds in any foreign currency.”  Defendants Reinschreiber 

and Powers control Global Financial, which has acted as an escrow agent for several of 

the issuers of stock sold through the boiler room scheme.  Global Financial is not 

registered with the Commission as a broker-dealer. 

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RELIEF DEFENDANTS 


18. CTA Worldwide Services, SA (“CTA Worldwide”) has received more 

than $2.2 million of investor proceeds in an account held at First Caribbean International 

Bank in Nassau, Bahamas. 

19. Stephan Gottfried von Hase (“von Hase”) has received more than 

$292,000 of investor proceeds in an account held at the Berner Kantonalbank in Berne 

and Biel, Switzerland.  Von Hase is currently the president of Marblehead Financial 

Group, a Chicago-based firm registered with the State of Illinois as an investment 

adviser. Von Hase maintains a residence in Chicago.  According to CRD records, from 

January 1998 until November 2001 von Hase was associated with the Chicago office of 

Professional Market Brokerage, Inc. During the time von Hase was associated with 

Professional Market Brokerage, Benger was the chief executive officer of the firm.  

According to CRD records, from May 1997 until February 2001 von Hase was a 

managing director of CTA Worldwide.  As recently as July 2008, von Hase maintained 

an e-mail address associated with CTA Worldwide.  

FACTS 


The Structure of the Scheme
 

20. Defendants’ scheme involves the offer and sale of stock in at least eight 

penny stock issuers: China Voice Holding Corp., Integrated Biodiesel Industries Ltd., 

Biomoda, Inc., Pharma Holdings Inc., World Energy Solutions, Inc., Revolutions 

Medical Corp., Earthsearch Communications, Inc., and Essential Innovations Technology 

Corp. (together the “Issuers”). All but one of these companies are based in the United 

States. With the exception of Integrated Biodiesel and Pharma, the stock for each of the 

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Issuers is quoted through the OTC Bulletin Board or “Pink Sheets.”  The stock of 

Integrated Biodiesel and Pharma is not yet listed on any stock exchange or quoted 

through a service like the OTC Bulletin Board.  The stock of most if not all of the Issuers 

trades at prices under $5 per share and otherwise meets the definition of a “penny stock” 

under the federal securities laws. 

21. SHB Capital and International Capital, through Benger and Meyers, have 

entered into agreements to distribute the shares of the Issuers.  These distributions purport 

to comply with Regulation S of the Securities Act, which provides an exemption for 

securities offerings in which (among other things) all of the investors are located outside 

the United States.   

22. SHB Capital and International Capital, through Benger and Meyers, have 

retained sales agents located outside the United States to make “cold calls” to individuals 

soliciting investments in the Issuers’ stock.  Many of the sales agents retained by the 

Distribution Agent Defendants work for firms that appear on a warning list -- compiled 

and published by the United Kingdom’s Financial Services Authority -- of firms 

unauthorized to do business in the United Kingdom, and which are suspected of boiler 

room activity.  Several of the agents retained by the Distribution Agent Defendants 

falsely claim to work for legitimate brokerage firms operating in the United Kingdom.   

23. Handler Thayer and Global Financial, through Powers and Reinschreiber, 

have agreed to act as escrow agents for the distributions of the Issuers’ stock.  The 

escrow agents receive and process investor SPA’s; receive investor funds into escrow 

accounts; disburse investor funds to the Issuers and to parties receiving sales 

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commissions; and send share certificates to investors to finalize their purchases of Issuer 

stock. In exchange, the escrow agents receive a share of the commission payments.  

24. The SPA is generally the only documentation provided to investors in 

connection with their purchases of the Issuers’ stock.  The SPA’s provided to investors in 

each of the Issuers are substantially similar to one another. 

China Voice: An Illustration of the Scheme 

25. The offer and sale of stock in China Voice illustrates how Defendants’ 

scheme operates in practice.  In early 2007, China Voice entered into distribution 

agreements with SHB Capital, International Capital, and one other entity.  The 

distribution agreements designate Benger and Meyers as the authorized signatories on 

behalf of distribution agents SHB Capital and International Capital, respectively.    

26. Each distribution agreement calls for the distribution agent to solicit 

foreign investors for China Voice’s Regulation S offering of common stock in exchange 

for commissions.  The distribution agreements include an attachment allocating investor 

proceeds from the offering.  According to China Voice’s distribution agreements with 

SHB Capital and International Capital, China Voice receives a mere 34% of the investor 

proceeds; the distribution agent and escrow agent collectively receive 66% of the 

proceeds. 

27. An exemplar of the SPA is attached to the SHB Capital distribution 

agreement with China Voice and to the International Capital agreement with China 

Voice. These exemplars are substantially similar to the SPA’s provided to individuals 

who have invested in China Voice’s Regulation S offering.   

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28. On the first page of the SPA for China Voice, there is a grid presenting 

“Transaction Information – Price and Shares.”  This is an example of such a grid: 

29. The first page of a SPA exemplar states that “[a] certificate representing 

the Shares will be issued by [China Voice] within 21 days of acceptance of this 

agreement and will be deposited with the Escrow Agent for transmittal to the [investor] 

upon transfer of the Total Consideration to [China Voice].” (emphasis added).   

30. In the body of an exemplar SPA, the following provision appears: 

Brokers or Finders. No person has or will have, as a result of 
transactions contemplated by this Agreement any right, interest or 
valid claim against or upon [the investor] for any commission, fee 
or other compensation as a finder or broker because of any act or 
omission by [China Voice], and/or its agents. 

31. The exemplar SPA makes no disclosure of the commissions exceeding 

60%. 

32. Rather, the exemplar SPAs represent that the transaction fees will be 

limited to a nominal fee of $50 or “1% of cost of shares to cover certificate and mailing 

costs.” 

33. The China Voice distribution agreements also include an escrow 

agreement outlining the role of the escrow agent in the Regulation S offering.  SHB 

Capital’s distribution agreement provides for Handler Thayer to act as escrow agent.  

Handler Thayer’s escrow agreement names Powers as the law firm’s authorized agent for 

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purposes of the distribution agreement.  The distribution and escrow agreements provide 

that Handler Thayer will obtain custody of investor funds and SPA’s; distribute investor 

proceeds according to the terms of the distribution agreement; maintain China Voice 

share certificates; and distribute share certificates to investors.   

34. International Capital’s distribution agreement with China Voice designates 

Equinox Administration, Inc. (“Equinox”) as International Capital’s escrow agent.  At the 

time that International Capital executed its distribution agreement with China Voice, 

Equinox was a Florida-based company controlled by Paul Gunter.  In March 2008, 

Gunter was arrested by federal law enforcement agents.  Gunter was subsequently 

indicted on mail and wire fraud charges by a grand jury convened by the United States 

Attorney’s Office for the Middle District of Florida.  The charges against Gunter, which 

are still pending, relate to his role in various Regulation S and “pre-IPO” offerings of 

penny stocks. On information and belief, following Gunter’s arrest, Global Financial 

stepped in to replace Equinox as International Capital’s designated escrow agent. 

35. To sell Regulation S shares of China Voice, the Distribution Agent 

Defendants retain foreign-based boiler room sales agents.  The sales agents pitching 

China Voice typically claim to work for established UK-based brokerage houses.  They 

employ high pressure sales pitches.  At least one sales agent bullied an investor by 

threatening to sue when the investor decided not to purchase the full amount of shares 

they initially discussed.   

36. The sales agents make material misrepresentations and omissions to 

convince individuals to invest in China Voice.  One sales agent procured an investment 

by falsely claiming that China Voice’s stock price was about to rise sharply in the wake 

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of the company’s selection as the 2008 Olympic Games’ chief network communication 

provider. 

37. The sales agents never provide China Voice investors with truthful 

disclosures of the commissions paid by the investors.  When prospective investors have 

asked about commissions, the sales agents have claimed that the investor only pays a 

commission if the investor sells his shares of China Voice for a profit.   

38. Once an individual agrees to invest in China Voice, the investor receives a 

SPA for review and signature. Aside from the share certificate, the SPA is generally the 

only document provided to an investor reflecting the investment in China Voice.  The 

SPA’s provided to investors are substantially similar to the form SPA’s attached to the 

China Voice distribution agreements with SHB Capital and International Capital.  The 

SPA instructs the investor to wire the investment funds to a particular U.S. account in the 

name of the designated escrow agent.  It also instructs the investor to fax the first page 

and the executed signature page of the agreement to a particular U.S. phone number.  

Neither the sales agents nor the SPA’s disclose the name of the party receiving the fax.  

In fact, the fax numbers were established by one or more of the Defendants through an e-

fax service. Once an investor faxes his signed SPA to the designated fax number, the e-

fax service e-mails it one or more of the Defendants.   

39. The China Voice SPA’s direct investors to wire their investment funds to 

U.S. accounts maintained in the name of the designated escrow agent.  Originally, 

Equinox was the designated escrow agent for International Capital’s China Voice 

investors. Within weeks after Gunter’s arrest, Global Financial stepped in to take his 

place. As a result, Equinox, Global Financial and Handler Thayer have each received 

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China Voice investor funds. In regards to the China Voice offering, the Handler Thayer 

escrow accounts are under the control of Powers and the Global Financial escrow 

accounts are under the control of Powers and Reinschreiber.  Since March 2007, the 

escrow agents have received at least $6.9 million in investor funds from China Voice 

investors. 

40. The escrow agents periodically disburse investor proceeds to China Voice 

and to numerous accounts for the payment of sales commissions.  Most of the accounts to 

which Powers and Reinschreiber wire commission payments are offshore, located in 

countries known for their strong bank secrecy laws, such as Switzerland and Cyprus.   

41. After receiving a China Voice investor’s proceeds, the escrow agent 

finalizes the transaction by causing a share certificate to be issued to the investor.  Some 

China Voice investors received their share certificates with an accompanying cover letter 

on Handler Thayer stationery signed by Powers as “Escrow Agent.”  The letter recites the 

number of shares purchased by the investor, but makes no mention of sales commissions.  

On information and belief, Global Financial Management has sent investors their China 

Voice share certificates with a cover letter falsely indicating that the letters were sent by 

China Voice.   These letters, like those sent by Powers, omit any disclosure of the 

massive sales commissions. 

Other Boiler Room Offerings 

42. The offer and sale of stock in the other Issuers follows the pattern 

illustrated by the China Voice offering.  Investors receive high pressure solicitation 

phone calls from boiler room sales agents regarding the stock of the Issuer.  Although the 

solicitations vary from investor to investor and from agent to agent, they uniformly 

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involve typical boiler room sales tactics targeting elderly British and European citizens.   

The boiler room operators generally use high pressure sales pitches to create a false sense 

of urgency about the investment.  They frequently present the Issuer’s stock as an 

opportunity to obtain high returns in a short period of time.  In some instances, they urge 

prospective investors to liquidate savings and legitimate investments in order to purchase 

the Issuer’s stock. In other instances, they purport to offer “discounted pricing” on the 

Issuer’s stock, which they claim they can offer because of their firm’s bulk purchase of 

such shares. 

43. After an individual agrees to invest in the stock of an Issuer, he is 

provided with a SPA similar to the SPA provided to China Voice investors.  The SPA’s 

falsely state that investors pay no commissions; falsely assert that the investor’s “Total 

Consideration” is provided to the Issuer or maintained on the Issuer’s behalf; and falsely 

represent that  “transaction fees” are limited to no more than 1% of the investment.  On 

information and belief, these SPA’s are provided to investors through the Distribution 

Agent Defendants. 

44. As with China Voice, investors in the other Issuers are told to fax the first 

page and executed signature page of their SPA’s to certain phone numbers within the 

United States. There is generally no individual or entity associated with the fax numbers.  

In fact, the fax numbers are established by one or more of the Defendants through an e-

fax service that converts investor faxes into PDF’s that are automatically e-mailed to the 

e-mail addresses designated by the customer, typically one or more of the Defendants.  

45. Investors in the stock offered by the Issuers other than China Voice have 

wire-transferred their investment funds to bank and brokerage accounts maintained in the 

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names of the designated escrow agents, Handler Thayer and Global Financial, and 

controlled by Powers and Reinschreiber. The escrow agents, through Powers and 

Reinschreiber, are then responsible for the disbursement of investor funds to the Issuers 

and the various parties receiving commissions. 

46. The escrow agents regularly send share certificates for Issuer stock to the 

investors.  In many cases, the share certificate is accompanied by a letter from the escrow 

agent. Powers regularly sends share certificates to investors with a cover letter on 

Handler Thayer stationery and signed by Powers as “Escrow Agent.”  On information 

and belief, Global Financial Management also sends share certificates to investors with a 

letter that falsely indicates that it comes from the Issuer.  The letters sent to investors 

make no disclosure of the commissions unknowingly paid by the investors.   

47. The disbursement of investor proceeds for the other Issuers is substantially 

similar to the breakdown of investor proceeds reflected in the China Voice distribution 

agreements.  The escrow agents’ bank and brokerage account records reflect that more 

than 60% of the investor proceeds pay sales commissions.  These payments are generally 

made to bank accounts maintained in countries with strong bank secrecy laws.  Less than 

40% of investor proceeds are directed to the Issuers.   

The Relief Defendants’ Receipt of Ill-Gotten Gains 

48. Von Hase and CTA Worldwide have each received a significant sum of 

investor proceeds through payment made by the Escrow Agent Defendants.  These 

investor proceeds represent undisclosed sales commissions from the boiler room scheme.  

Neither von Hase nor CTA Worldwide has any legitimate claim to the funds that they 

have received, nor have they provided any services to justify the receipt of such funds.  

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The Scheme Is Ongoing 

49.   Since March 2007, Defendants’ scheme has raised at least $44.2 million 

from more than 1,400 investors.  On information and belief, Defendants began their 

scheme earlier than March 2007, involving more stocks than those of the Issuers set forth 

above. 

50. This scheme is ongoing.  Individuals continue to receive solicitation calls 

and continue to invest their funds in stocks sold by the Distribution Agent Defendants.  In 

November and December 2008 alone, the scheme raised at least $1.2 million from 

unsuspecting investors. 

COUNT I 

VIOLATIONS OF SECTION 17(A)(1) OF THE SECURITIES ACT 
[15 U.S.C. § 77q(a)(1)] 

(Against Defendants Benger, Meyers, 
SHB Capital and International Capital) 

51. Paragraphs 1 through 50 are realleged and incorporated by reference. 

52. Benger, Meyers, SHB Capital and International Capital, in the offer or sale 

of securities, by the use of the means and instruments of transportation or communication 

in interstate commerce or by use of the mails, singularly or in concert, directly or 

indirectly employed devises, schemes or artifices to defraud.   

53. The shares of the Issuers are “securities” as that term is defined in Section 

2(a)(1) of the Securities Act and Section 3(a)(10) of the Exchange Act [15 U.S.C. §§ 

77b(a)(1) and 78(b)(10)]. 

54. Benger, Meyers, SHB Capital and International Capital knowingly or 

recklessly engaged in the fraudulent conduct described above. 

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55. By reason of the foregoing, Benger, Meyers, SHB Capital and 

International Capital violated Section 17(a)(1) of the Securities Act [15 U.S.C. § 

77q(a)(1)]. 

COUNT II 

VIOLATIONS OF SECTIONS 17(A)(2)  
AND 17(A)(3) OF THE SECURITIES ACT 

[15 U.S.C. §§ 77q(a)(2) and 77q(a)(3)] 

(Against Defendants Benger, Meyers, 
SHB Capital and International Capital) 

56. Paragraphs 1 through 50 are realleged and incorporated by reference. 

57. Benger, Meyers, SHB Capital and International Capital, in the offer or sale 

of securities, by the use of the means or instruments of transportation or communication 

in interstate commerce or by use of the mails, directly or indirectly, singularly or in 

concert, have obtained money or property by means of untrue statements of material fact 

or omitted to state material facts necessary in order to make the statements made, in light 

of the circumstances under which they were made, not misleading; or engaged in a 

transaction, practice, or course of business which operated or would operate as a fraud or 

deceit upon purchaser of securities. 

58. The shares of the Issuers are “securities” as that term is defined in Section 

2(a)(1) of the Securities Act and Section 3(a)(10) of the Exchange Act [15 U.S.C. §§ 

77b(a)(1) and 78(b)(10)]. 

59. Benger, Meyers, SHB Capital and International Capital knowingly or 

recklessly engaged in the fraudulent conduct described above. 

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60. By reason of the foregoing, Benger, Meyers, SHB Capital and 

International Capital violated Sections 17(a)(2) and 17(a)(3) of the Securities Act [15 

U.S.C. §§ 77q(a)(2) and 77q(a)(3)]. 

COUNT III 

VIOLATIONS OF SECTION 10(B) OF THE 
EXCHANGE ACT AND RULE 10B-5 THEREUNDER 

[15 U.S.C. § 78j(b) & 17 C.F.R. § 240.10b-5] 

(Against Defendants Benger, Meyers, SHB Capital and International Capital) 

61. Paragraphs 1 through 50 are realleged and incorporated by reference. 

62. Benger, Meyers, SHB Capital and International Capital, in connection 

with the purchase or sale of securities, directly or indirectly, singularly or in concert, by 

the use of the means or instrumentalities of interstate commerce or of the mails: (a) used 

or employed a device, scheme, or artifice to defraud; (b) made untrue statements of 

material fact or omitted to state material facts necessary in order to make the statements 

made, in light of the circumstances under which they were made, not misleading; and (c) 

engaged in acts, practices, or courses of business which operated or would operate as a 

fraud and deceit upon the purchasers and prospective sellers of such securities. 

63. Benger, Meyers, SHB Capital and International Capital knowingly or 

recklessly engaged in the fraudulent conduct described above. 

64. The shares of the Issuers are “securities” as that term is defined in Section 

2(a)(1) of the Securities Act and Section 3(a)(10) of the Exchange Act [15 U.S.C. §§ 

77b(a)(1) and 78(b)(10)]. 

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65. By reason of the foregoing, Benger, Meyers, SHB Capital and 

International Capital violated Section 10(b) of the Exchange Act [15 U.S.C. § 78j(b)] and 

Rule 10b-5 promulgated thereunder [17 C.F.R. § 240.10b-5]. 

COUNT IV 

AIDING AND ABETTING VIOLATIONS OF SECTION 10(B) OF THE  

EXCHANGE ACT AND RULE 10B-5 THEREUNDER 


[15 U.S.C. § 78j(b) & 17 C.F.R. § 240.10b-5] 


(Against Defendants Powers, Reinschreiber and Global Financial)
 

66. Paragraphs 1 through 50 are realleged and incorporated by reference. 

67. Benger, Meyers, SHB Capital and International Capital, have violated 

Section 10(b) of the Exchange Act [15 U.S.C. § 78j(b)] and Rule 10b-5 promulgated 

thereunder [17 C.F.R. § 240.10b-5]. 

68. By their conduct described herein, Powers, Reinschreiber and Global 

Financial each provided knowing and substantial assistance to Benger, Meyers, SHB 

Capital and International Capital in their unlawful conduct alleged in paragraphs 1 

through 50 above. 

69. Powers, Reinschreiber and Global Financial aided and abetted Benger, 

Meyers, SHB Capital and International Capital’s violations of Section 10(b) of the 

Exchange Act and Rule 10b-5 thereunder. 

COUNT V 

VIOLATIONS OF SECTION 15(A) OF THE EXCHANGE ACT 

[15 U.S.C. § 77o(a)]
 

(Against Defendants Benger, Meyers, Powers, Reinschreiber,  

SHB Capital, International Capital, Global Financial,  


and Handler Thayer)
 

70. Paragraphs 1 through 50 are realleged and incorporated by reference. 

2071. Defendants Benger, Meyers, Powers, Reinschreiber, SHB Capital, 

International Capital, Global Financial, and Handler Thayer, by the conduct described 

above, directly or indirectly, singularly or in concert, made use of the mails or the means 

or instrumentalities of interstate commerce to effect transactions in, or to induce or 

attempt to induce, the purchase or sale of securities, without registering with the 

Commission as a broker or dealer.  

72. The shares of the Issuers are “securities” as that term is defined in Section 

2(a)(1) of the Securities Act and Section 3(a)(10) of the Exchange Act [15 U.S.C. §§ 

77b(a)(1) and 78(b)(10)]. 

73. By engaging in the conduct described in above, Benger, Meyers, Powers, 

Reinschreiber, SHB Capital, International Capital, Global Financial, and Handler Thayer, 

violated Section 15(a) of the Exchange Act [15 U.S.C. § 78o(a)]. 

COUNT VI
 

EQUITABLE CLAIM WITH RESPECT TO RELIEF DEFENDANTS  


(Regarding Relief Defendants CTA Worldwide Services, SA
 
and Stephan Gottfried Van Hase)
 

74. Paragraphs 1 through 50 are realleged and incorporated by reference. 

75. Relief Defendants, directly or indirectly, received funds or benefited from 

the use of such funds, which are the proceeds, or are traceable to the proceeds, of the 

unlawful activity alleged above. 

76. Relief Defendants have no legitimate claim to these funds that they 

received or from which they otherwise benefited, directly or indirectly. 

77. Relief Defendants have been unjustly enriched by their direct or indirect 

receipt of or benefit from investor funds.      

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78. The Commission is entitled to an order requiring Relief Defendants to 

disgorge all of the proceeds of investor funds that they received or from which they 

benefited, either directly or indirectly. 

REQUESTS FOR RELIEF 

WHEREFORE, the Commission requests that this Court: 

A. Find that each Defendant committed the violations alleged herein; 

B. Enter Orders of Permanent Injunction as to each Defendant, in a form 

consistent with Rule 65(d) of the Federal Rules of Civil Procedure, restraining and 

enjoining: 

1.	 Benger, Meyers, SHB Capital and International Capital, from 
violating Section 17(a)(1), (2) and (3) of the Securities Act, 
Sections 10(b) and 15(a) of the Exchange Act and Rule 10b-5 
promulgated thereunder;  

2.	 Powers, Reinschreiber and Global Financial from aiding and 
abetting violations of Section 10(b) of the Exchange Act and Rule 
10b-5 thereunder, and from violating Section 15(a) of the 
Exchange Act; and 

3.	 Handler Thayer from violating Section 15(a) of the Exchange Act. 

C. Enter an Order requiring Defendants to disgorge all ill-gotten gains 

resulting from their participation in the conduct described above, including pre-judgment 

interest.  

D. Enter an Order requiring Defendants to pay civil penalties pursuant to 

Section 20(d) of the Securities Act and Section 21(d)(3) of the Exchange Act [15 U.S.C. 

§§ 77t(d) and 78u(d)(3)]. 

E. Enter an Order barring Defendants from participating in any offering of 

penny stock pursuant to 20(g) of the Securities Act and Section 21(d)(6) of the Exchange 

Act [15 U.S.C. §§ 77t(g) and 78u(d)(6)]. 

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F. Enter an Order requiring Relief Defendants to disgorge all funds they 

received from Defendants’ ill-gotten gains or by which they have been unjustly enriched, 

including all investor funds transferred to them or used for their benefit, including 

prejudgment interest thereon.  

G. Enter an Order appointing a Receiver over Benger, Meyers, Reinschreiber, 

Powers, SHB Capital, International Capital, Global Financial and other entities under 

these Defendants’ ownership or control. 

H. Grant such other and further equitable relief as this Court deems 

appropriate and necessary. 

JURY TRIAL DEMAND 

The Commission requests a trial by jury.   

Dated: February 3, 2009 

UNITED STATES SECURITIES AND 
EXCHANGE COMMISSION 

_________________________________ 
      By: One of its Attorneys 

Jonathan S. Polish (Illinois Bar No. 6237890) 

John E. Birkenheier (Illinois Bar No. 6270993) 

John J. Sikora, Jr. (Illinois Bar No. 6217330) 

Kent W. McAllister (Northern District of Illinois Bar No. 90785656) 

Eric A. Celauro (Illinois Bar No. 6274684) 

UNITED STATES SECURITIES  

AND EXCHANGE COMMISSION 
175 W. Jackson Blvd.  
Suite 900 
Chicago, Illinois 60604 
(312) 353-6884 

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