SEC v. Mojave Valley Resort, Inc.; and Mark A. Temple, Central District of California — Complaint
raw: 20(d) of the Securities Act of 1933 (“Securities Act”) [15 U.S.C. §77t(b) and
summary
The SEC alleges that Mojave Valley Resort, Inc. and its owner Mark A. Temple committed securities fraud by falsely representing in a $12.75 million municipal bond offering that the bonds were secured by valid deeds of trust on tribal leasehold interest—despite lacking required Bureau of Indian Affairs and tribal approvals—leading to an $11 million default and violations of Sections 10(b) and 17(a) of federal securities laws.
paragraph
The SEC charged Mojave Valley Resort, Inc. (MVRI) and Mark A. Temple with securities fraud for misrepresenting in official offering materials that $12.75 million in municipal bonds were secured by valid deeds of trust on MVRI’s leasehold interest in Fort Mojave Indian Tribe land. In reality, federal law and the Master Lease required Bureau of Indian Affairs and tribal approval to create such security interests—approvals that were never obtained, rendering the deeds legally void. Despite this, Temple and MVRI knowingly or recklessly certified the security interests were valid, misleading investors who later faced a $11 million default after the bonds went into default in 2003, violating Sections 10(b) and 17(a) of the federal securities laws.
narrative
The Securities and Exchange Commission (SEC) filed a complaint against Mojave Valley Resort, Inc. (MVRI) and its owner, Mark A. Temple, alleging they committed securities fraud in connection with a $12.75 million municipal bond offering to fund a casino and housing development on Fort Mojave Indian Tribe land near Laughlin, Nevada. MVRI and Temple falsely represented in the Official Statement that the bonds were secured by valid deeds of trust on MVRI’s leasehold interest in the tribal property, when federal regulations and the Master Lease explicitly required approval from the Bureau of Indian Affairs and the Tribe—approvals that were never sought or obtained. As a result, the purported deeds of trust were legally void and provided no actual security to bondholders. Temple, who controlled MVRI and its affiliates, knew or was recklessly indifferent to this legal deficiency, yet certified the representations as accurate in official documents. The bonds defaulted in 2003, leaving investors owed approximately $11 million in unpaid principal and interest. The SEC asserts that these actions violated Section 10(b) of the Securities Exchange Act and Rule 10b-5, as well as Section 17(a) of the Securities Act. The Commission seeks a permanent injunction, disgorgement of ill-gotten gains, civil penalties, and ongoing court jurisdiction to enforce relief against both defendants for their fraudulent conduct in the offer and sale of securities using interstate commerce.
Classified unclassified. No EDGAR filing fingerprint (criminal/DOJ-side scheme). detection rule →
Statutes
15 U.S.C. §77t(b)15 U.S.C. §77v(a)15 U.S.C. § 78aa15 U.S.C. §78j(b)15 U.S.C. § 77q(a)17 C.F.R. §240.10b-5Sections 20(b) and 20(d) of the Securities ActSections 20(b) and 20(d) of the Securities ActSections 21(d) and 21(e) of the Securities Exchange ActSections 21(d) and 21(e) of the Securities Exchange ActSection 22(a) of the Securities ActSection 17(a) of the Securities ActSections 10(b) of the Exchange Act and Rule 10b-5 thereunder and Section 17(a) of the Securities ActSections 10(b) of the Exchange Act and Rule 10b-5 thereunder and Section 17(a) of the Securities ActSections 10(b) of the Exchange Act and Rule 10b-5 thereunder and Section 17(a) of the Securities ActRule 10b-5
Parties
Securities and Exchange CommissionMojave Valley Resort, Inc.Mark A. Temple
Keywords
mvritemplemvri templesecuritiesinterestleasehold interestleaseagainst mvrideeds trustmvri leaseholdofficial statementmaster leasebondstribesecurities exchange
Extracted insights
Dollar amounts 4
- $12.75M $12.75 million $10M–$100M
- $12.75M $12,750,000 $10M–$100M
- $6.00M $6 million $1M–$10M
- $5.40M $5.4 million $1M–$10M
Entities 3
- location Temple
- organization The Commission
- person this action
Triples 10
- The Commission brings this action
- Mojave Valley Resort, Inc. and Mark A. Temple made use of the means and instrumentalities of interstate commerce, the mails, or the facilities of a national securities exchange
- Temple lives in Palm Springs, California
- Mojave Valley Resort, Inc. and Mark A. Temple made misrepresentations to municipal bond investors who funded the Nevada construction project
- MVRI is the developer of a casino and housing project on Indian land near Laughlin, Nevada
- Temple owns and manages MVRI
- MVRI obtained a long-term lease on the Indian property
- MVRI and Temple falsely stated that the $12.75 million in bonds were secured by deeds of trust on MVRI’s leasehold interest in the Indian property
- the developer had not taken the necessary steps to create valid deeds of trust
- the deeds did not provide any security to bondholders in the event of default
Text layers
Extracted body text (18,372c)
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COMPLAINT AGAINST MVRI AND TEMPLE
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HELANE L. MORRISON (State Bar No. 127752)
MARC FAGEL (State Bar No. 154452)
MICHAEL S. DICKE (State Bar No. 158187)
SHEILA E. O’CALLAGHAN (State Bar No. 131032)
Attorneys for Plaintiff
SECURITIES AND EXCHANGE
COMMISSION
44 Montgomery Street, Suite 1100
San Francisco, California 94104
Telephone: (415) 705-2500
SECURITIES AND EXCHANGE
COMMISSION,
Plaintiff,
vs.
MOJAVE VALLEY RESORT, INC. and
MARK A. TEMPLE,
Defendants.
Case No.
C
OMPLAINT
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
Plaintiff Securities and Exchange Commission (the “Commission”)
alleges:
JURISDICTION AND VENUE
1. The Commission brings this action pursuant to Sections 20(b) and
20(d) of the Securities Act of 1933 (“Securities Act”) [15 U.S.C. §77t(b) and
77t(d)] and Sections 21(d) and 21(e) of the Securities Exchange Act of 1934
(“Exchange Act”) [15 U.S.C. §§ 78u(d) and 78u(e)]. This Court has jurisdiction
over this action pursuant to Section 22(a) of the Securities Act [15 U.S.C. §77v(a)]
and Sections 21(e) and 27 of the Exchange Act [15 U.S.C. §§ 78u(e) and 78aa].
2. Mojave Valley Resort, Inc. and Mark A. Temple directly or
indirectly, have each made use of the means and instrumentalities of interstate
commerce, of the mails, or of the facilities of a national securities exchange, in
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COMPLAINT AGAINST MVRI AND TEMPLE
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connection with the acts, practices, and courses of business and transactions
alleged herein.
3. This district is an appropriate venue for this action under 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], because defendant Temple lives in Palm Springs, California.
SUMMARY OF THE ACTION
4. Defendants Mojave Valley Resort, Inc. (“MVRI”) and Mark A.
Temple (“Temple”) made fraudulent misrepresentations to municipal bond
investors who funded Defendants’ Nevada construction project.
5. MVRI, a Nevada corporation owned and managed by Temple, is
the developer of a casino and housing project on Indian land near Laughlin,
Nevada. To construct the development, MVRI obtained a long-term lease on the
Indian property. MVRI and Temple (collectively “Defendants”) falsely stated in
the offering materials that the $12.75 million in bonds being issued to fund this
development were secured by deeds of trust on MVRI’s leasehold interest in the
Indian property. In fact, the developer had not taken the necessary steps to create
valid deeds of trust and therefore the deeds did not provide any security to
bondholders in the event of default. MVRI has defaulted on its obligation to
make timely payments on the bonds, and investors are owed approximately $11
million.
6. Defendants knew or were reckless in not knowing that the Official
Statement’s representation to investors that there was a valid security interest in
MVRI’s leasehold interest in the Indian lands was false and misleading.
Accordingly, MVRI and Temple violated the antifraud provisions of the federal
securities laws.
//
//
THE DEFENDANTS
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6. Mojave Valley Resort, Inc. (“MVRI”) is a Nevada corporation,
formed in 1990 to enter into a lease with the Fort Mojave Indian Tribe. After the
lease was signed in 1993, MVRI entered into arrangements with two affiliates,
Mojave Valley Resort Casino Company and MATCO Construction LLC, both
controlled by the Temple family. Mojave Valley Resort Casino Company was to
develop the casinos while MATCO Construction LLC was to develop the
residential components.
7. Mark Temple (“Temple”), age 44 and a resident of Palm
Springs, California, has been a developer for approximately the last 15 years.
Temple and his father own MVRI.
ALLEGATIONS
Background
8. In 1990, developer MVRI sought to construct private housing and
a casino near Laughlin, Nevada (the “Project”) on land owned by the Fort Mojave
Indian Tribe (“the Tribe”). MVRI and its principal Temple negotiated with the
Tribe for the right to build the Project on tribal lands and ended up agreeing,
pursuant to a Master Lease, to lease 528 acres from the Tribe for a period of 84
years.
9. As a matter of law, tribal land is held in trust by the Department of
the Interior for the benefit of the Tribe and cannot be sold by the Tribe. As a
result, the Master Lease contained several explicit restrictions on MVRI’s interest
in the land and their ability to transfer that interest. First, MVRI could not buy the
property outright, and could only obtain a leasehold interest in the land. Second, in
order to comply with the regulations governing Indian tribes, the Master Lease had
to be approved and authorized by the Bureau of Indian Affairs (“BIA”).
Finally, as
required by law, Section 13 of the Master Lease required approval of both the
Tribe and the Secretary of the Interior before any encumbrance could be placed
upon MVRI’s leasehold interest.
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COMPLAINT AGAINST MVRI AND TEMPLE
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10. After the BIA approved the lease in 1993, MVRI attempted to
develop the land, pouring $6 million of its own money into the project. However,
MVRI lacked the financial resources to complete the Project independently and was
unable to obtain conventional financing. In order to raise development funds, MVRI
became involved in two rounds of municipal bond financing.
The 1999 Bond Offering
11. Leading up to the Offering at issue was an earlier bond offering in
1996 for $5.4 million in tax-exempt bonds to fund MVRI’s construction on the
same leased tribal lands (the “1996 Offering”). In April 1999, the 1996 bonds
came due. MVRI did not have the money to repay the bonds and sought financing
through a second municipal bond offering.
12. In September 1999, the Desert Springs Community Corporation,
a Nevada non-profit corporation formed to issue development bonds and made up
of relatives and acquaintances of Temple, issued $12,750,000 in tax-exempt
municipal bonds to facilitate the acquisition and construction of public
improvements associated with the Project. The stated purpose of the bonds was to
refund the principal and interest of the 1996 Offering, and to construct certain
public capital improvements. These improvements included water, sewer, streets,
utility, and parking easements, associated with approximately 160 residential units
and related components of the Project. According to the Official Statement, when
the bonds were retired, the public capital improvements would be conveyed to the
Tribe.
13. As detailed in the Official Statement, the source of repayment for
the principal and interest of the bonds was to come from the imposition on the
developer of “Project Impact Reimbursement Fees.” Project Impact
Reimbursement Fees were designated portions of proceeds the developer
anticipated receiving from the sublease of the completed homes and casino sites
within the Project.
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COMPLAINT AGAINST MVRI AND TEMPLE
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14. The Official Statement represented that the security for the
repayment of the bonds would be provided by a deed of trust on a portion of
MVRI’s leasehold interest in the property. In the event that the Project failed to
succeed and MVRI was unable to pay off the bonds, the bondholders would
receive the net proceeds from any foreclosure on the deeds of trust.
15. The representation that the deeds of trust created a valid security
interest in the lease, which would provide bondholders with recourse in the event
of a default, was false and misleading. As an encumbrance on MVRI’s leasehold
interest in the property, the deeds of trust were governed by the terms of the Master
Lease and Indian regulations. Pursuant to the Master Lease’s explicit terms,
encumbrances (including deeds of trust) were not permitted unless approved and
authorized by both the Tribe and the BIA. BIA regulations require the same
approvals. Accordingly, the deeds of trust created in MVRI’s leasehold interest in
the tribal lands were null and void. Therefore, the bondholders were left without
the benefit of foreclosing on MVRI’s leasehold interest in the event of MVRI’s
default on repayment of the bond principal and interest.
The Role of MVRI and Temple
16. The Official Statement, in addition to describing MVRI and
Temple, included a copy of a Development Finance Agreement. This agreement,
signed by Mark Temple, states that the Developer participated in the drafting of the
Official Statement, and represents that the “[d]eveloper . . . has full authority and
power to execute the Deed of Trust.” This representation was false. As Temple
knew or was reckless in not knowing, the Master Lease explicitly required that any
encumbrance on the MVRI’s leasehold interest required the approval of the Tribe
and the BIA. MVRI and Temple never obtained such approvals.
17. Temple, on behalf of MVRI, reviewed and approved the Official
Statement containing the false statement regarding the security for the
bondholders. Moreover, Temple and MVRI falsely represented in the
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COMPLAINT AGAINST MVRI AND TEMPLE
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Development Finance Agreement, an exhibit to the Official Statement, that it had
the power and authority to execute the deeds of trust. The developer was a party to
the Master Lease, which set forth the requirement that approvals be obtained from
the tribe and the BIA.
Defendants Default
18. In fall 2002, the Indian tribe notified MVRI that it was in default
under the lease for failing to build a casino. On February 13, 2003, in its
Continuing Secondary Disclosure Report, MVRI disclosed that the bonds were not
secured because the tribe and the BIA never approved the deeds securing the
bonds. Currently, MVRI is in default on the bond and interest payments.
FIRST CLAIM FOR RELIEF
Violation of Section 10(b) of the Exchange Act
and Rule 10b-5
19. The Commission realleges and incorporates by reference
Paragraphs 1 through 18 above.
20. During the relevant period, MVRI and Temple directly or
indirectly, in connection with the purchase or sale of securities, by the use of
means or instrumentalities of interstate commerce, or of the mails, with scienter:
(a) employed devices, schemes, or artifices to defraud;
(b) made untrue statements of material facts or omitted to state
material facts necessary in order to make the statements made, in the 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 or deceit upon other persons, including
purchasers and sellers of securities.
21. MVRI and Temple have violated and, unless restrained and
enjoined, will continue to violate Section 10(b) of the Exchange Act, 15 U.S.C.
§78j(b), and Rule 10b-5, 17 C.F.R. §240.10b-5.
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COMPLAINT AGAINST MVRI AND TEMPLE
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SECOND CLAIM FOR RELIEF
Violation of Section 17(a) of the Securities Act
22. The Commission realleges and incorporates by reference
Paragraphs 1 through 18 above.
23. During the relevant period, MVRI and Temple directly or
indirectly, in the offer or sale of any security, by the use of means or
instrumentalities of interstate commerce, or of the mails, with scienter:
(a) employed any device, scheme, or artifice to defraud;
(b) obtained money or property by means of any untrue
statement of a material fact or any omission of a material fact necessary in order to
make the statements made, in light of the circumstances under which they were
made, not misleading; or
(c) engaged in any transaction, practice, or course of business
which operates or would operate as a fraud or deceit upon the purchaser.
24. MVRI and Temple have violated and, unless restrained and
enjoined, will continue to violate Section 17(a) of the Securities Act, 15 U.S.C. §
77q(a).
PRAYER FOR RELIEF
WHEREFORE, the Commission respectfully requests that this Court:
I.
Permanently enjoin defendants MVRI and Temple from violating Sections
10(b) of the Exchange Act and Rule 10b-5 thereunder and Section 17(a) of the
Securities Act.
II.
Order defendants MVRI and Temple to disgorge any ill-gotten gains.
III.
Order defendants MVRI and Temple to pay civil penalties.
IV.
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COMPLAINT AGAINST MVRI AND TEMPLE
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Retain jurisdiction of this action in accordance with the principles of equity
and the Federal Rules of Civil Procedure in order to implement and carry out the
terms of all orders and decrees that may be entered, or to entertain any suitable
application or motion for additional relief within the jurisdiction of this Court.
V.
Grant such other and further relief as this Court may determine to be just and
necessary.
Dated:
, 2004 Respectfully submitted,
_______________________
Sheila E. O’Callaghan
Attorney for Plaintiff
SECURITIES AND EXCHANGE
COMMISSION
OCR text (14,815c · tika · 95% conf)
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COMPLAINT AGAINST MVRI AND TEMPLE
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HELANE L. MORRISON (State Bar No. 127752)
MARC FAGEL (State Bar No. 154452)
MICHAEL S. DICKE (State Bar No. 158187)
SHEILA E. O’CALLAGHAN (State Bar No. 131032)
Attorneys for Plaintiff
SECURITIES AND EXCHANGE
COMMISSION
44 Montgomery Street, Suite 1100
San Francisco, California 94104
Telephone: (415) 705-2500
SECURITIES AND EXCHANGE
COMMISSION,
Plaintiff,
vs.
MOJAVE VALLEY RESORT, INC. and
MARK A. TEMPLE,
Defendants.
Case No.
C OMPLAINT
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
Plaintiff Securities and Exchange Commission (the “Commission”)
alleges:
JURISDICTION AND VENUE
1. The Commission brings this action pursuant to Sections 20(b) and
20(d) of the Securities Act of 1933 (“Securities Act”) [15 U.S.C. §77t(b) and
77t(d)] and Sections 21(d) and 21(e) of the Securities Exchange Act of 1934
(“Exchange Act”) [15 U.S.C. §§ 78u(d) and 78u(e)]. This Court has jurisdiction
over this action pursuant to Section 22(a) of the Securities Act [15 U.S.C. §77v(a)]
and Sections 21(e) and 27 of the Exchange Act [15 U.S.C. §§ 78u(e) and 78aa].
2. Mojave Valley Resort, Inc. and Mark A. Temple directly or
indirectly, have each made use of the means and instrumentalities of interstate
commerce, of the mails, or of the facilities of a national securities exchange, in
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COMPLAINT AGAINST MVRI AND TEMPLE
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connection with the acts, practices, and courses of business and transactions
alleged herein.
3. This district is an appropriate venue for this action under 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], because defendant Temple lives in Palm Springs, California.
SUMMARY OF THE ACTION
4. Defendants Mojave Valley Resort, Inc. (“MVRI”) and Mark A.
Temple (“Temple”) made fraudulent misrepresentations to municipal bond
investors who funded Defendants’ Nevada construction project.
5. MVRI, a Nevada corporation owned and managed by Temple, is
the developer of a casino and housing project on Indian land near Laughlin,
Nevada. To construct the development, MVRI obtained a long-term lease on the
Indian property. MVRI and Temple (collectively “Defendants”) falsely stated in
the offering materials that the $12.75 million in bonds being issued to fund this
development were secured by deeds of trust on MVRI’s leasehold interest in the
Indian property. In fact, the developer had not taken the necessary steps to create
valid deeds of trust and therefore the deeds did not provide any security to
bondholders in the event of default. MVRI has defaulted on its obligation to
make timely payments on the bonds, and investors are owed approximately $11
million.
6. Defendants knew or were reckless in not knowing that the Official
Statement’s representation to investors that there was a valid security interest in
MVRI’s leasehold interest in the Indian lands was false and misleading.
Accordingly, MVRI and Temple violated the antifraud provisions of the federal
securities laws.
//
//
THE DEFENDANTS
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COMPLAINT AGAINST MVRI AND TEMPLE
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6. Mojave Valley Resort, Inc. (“MVRI”) is a Nevada corporation,
formed in 1990 to enter into a lease with the Fort Mojave Indian Tribe. After the
lease was signed in 1993, MVRI entered into arrangements with two affiliates,
Mojave Valley Resort Casino Company and MATCO Construction LLC, both
controlled by the Temple family. Mojave Valley Resort Casino Company was to
develop the casinos while MATCO Construction LLC was to develop the
residential components.
7. Mark Temple (“Temple”), age 44 and a resident of Palm
Springs, California, has been a developer for approximately the last 15 years.
Temple and his father own MVRI.
ALLEGATIONS
Background
8. In 1990, developer MVRI sought to construct private housing and
a casino near Laughlin, Nevada (the “Project”) on land owned by the Fort Mojave
Indian Tribe (“the Tribe”). MVRI and its principal Temple negotiated with the
Tribe for the right to build the Project on tribal lands and ended up agreeing,
pursuant to a Master Lease, to lease 528 acres from the Tribe for a period of 84
years.
9. As a matter of law, tribal land is held in trust by the Department of
the Interior for the benefit of the Tribe and cannot be sold by the Tribe. As a
result, the Master Lease contained several explicit restrictions on MVRI’s interest
in the land and their ability to transfer that interest. First, MVRI could not buy the
property outright, and could only obtain a leasehold interest in the land. Second, in
order to comply with the regulations governing Indian tribes, the Master Lease had
to be approved and authorized by the Bureau of Indian Affairs (“BIA”). Finally, as
required by law, Section 13 of the Master Lease required approval of both the
Tribe and the Secretary of the Interior before any encumbrance could be placed
upon MVRI’s leasehold interest.
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COMPLAINT AGAINST MVRI AND TEMPLE
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10. After the BIA approved the lease in 1993, MVRI attempted to
develop the land, pouring $6 million of its own money into the project. However,
MVRI lacked the financial resources to complete the Project independently and was
unable to obtain conventional financing. In order to raise development funds, MVRI
became involved in two rounds of municipal bond financing.
The 1999 Bond Offering
11. Leading up to the Offering at issue was an earlier bond offering in
1996 for $5.4 million in tax-exempt bonds to fund MVRI’s construction on the
same leased tribal lands (the “1996 Offering”). In April 1999, the 1996 bonds
came due. MVRI did not have the money to repay the bonds and sought financing
through a second municipal bond offering.
12. In September 1999, the Desert Springs Community Corporation,
a Nevada non-profit corporation formed to issue development bonds and made up
of relatives and acquaintances of Temple, issued $12,750,000 in tax-exempt
municipal bonds to facilitate the acquisition and construction of public
improvements associated with the Project. The stated purpose of the bonds was to
refund the principal and interest of the 1996 Offering, and to construct certain
public capital improvements. These improvements included water, sewer, streets,
utility, and parking easements, associated with approximately 160 residential units
and related components of the Project. According to the Official Statement, when
the bonds were retired, the public capital improvements would be conveyed to the
Tribe.
13. As detailed in the Official Statement, the source of repayment for
the principal and interest of the bonds was to come from the imposition on the
developer of “Project Impact Reimbursement Fees.” Project Impact
Reimbursement Fees were designated portions of proceeds the developer
anticipated receiving from the sublease of the completed homes and casino sites
within the Project.
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COMPLAINT AGAINST MVRI AND TEMPLE
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14. The Official Statement represented that the security for the
repayment of the bonds would be provided by a deed of trust on a portion of
MVRI’s leasehold interest in the property. In the event that the Project failed to
succeed and MVRI was unable to pay off the bonds, the bondholders would
receive the net proceeds from any foreclosure on the deeds of trust.
15. The representation that the deeds of trust created a valid security
interest in the lease, which would provide bondholders with recourse in the event
of a default, was false and misleading. As an encumbrance on MVRI’s leasehold
interest in the property, the deeds of trust were governed by the terms of the Master
Lease and Indian regulations. Pursuant to the Master Lease’s explicit terms,
encumbrances (including deeds of trust) were not permitted unless approved and
authorized by both the Tribe and the BIA. BIA regulations require the same
approvals. Accordingly, the deeds of trust created in MVRI’s leasehold interest in
the tribal lands were null and void. Therefore, the bondholders were left without
the benefit of foreclosing on MVRI’s leasehold interest in the event of MVRI’s
default on repayment of the bond principal and interest.
The Role of MVRI and Temple
16. The Official Statement, in addition to describing MVRI and
Temple, included a copy of a Development Finance Agreement. This agreement,
signed by Mark Temple, states that the Developer participated in the drafting of the
Official Statement, and represents that the “[d]eveloper . . . has full authority and
power to execute the Deed of Trust.” This representation was false. As Temple
knew or was reckless in not knowing, the Master Lease explicitly required that any
encumbrance on the MVRI’s leasehold interest required the approval of the Tribe
and the BIA. MVRI and Temple never obtained such approvals.
17. Temple, on behalf of MVRI, reviewed and approved the Official
Statement containing the false statement regarding the security for the
bondholders. Moreover, Temple and MVRI falsely represented in the
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Development Finance Agreement, an exhibit to the Official Statement, that it had
the power and authority to execute the deeds of trust. The developer was a party to
the Master Lease, which set forth the requirement that approvals be obtained from
the tribe and the BIA.
Defendants Default
18. In fall 2002, the Indian tribe notified MVRI that it was in default
under the lease for failing to build a casino. On February 13, 2003, in its
Continuing Secondary Disclosure Report, MVRI disclosed that the bonds were not
secured because the tribe and the BIA never approved the deeds securing the
bonds. Currently, MVRI is in default on the bond and interest payments.
FIRST CLAIM FOR RELIEF
Violation of Section 10(b) of the Exchange Act
and Rule 10b-5
19. The Commission realleges and incorporates by reference
Paragraphs 1 through 18 above.
20. During the relevant period, MVRI and Temple directly or
indirectly, in connection with the purchase or sale of securities, by the use of
means or instrumentalities of interstate commerce, or of the mails, with scienter:
(a) employed devices, schemes, or artifices to defraud;
(b) made untrue statements of material facts or omitted to state
material facts necessary in order to make the statements made, in the 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 or deceit upon other persons, including
purchasers and sellers of securities.
21. MVRI and Temple have violated and, unless restrained and
enjoined, will continue to violate Section 10(b) of the Exchange Act, 15 U.S.C.
§78j(b), and Rule 10b-5, 17 C.F.R. §240.10b-5.
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COMPLAINT AGAINST MVRI AND TEMPLE
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SECOND CLAIM FOR RELIEF
Violation of Section 17(a) of the Securities Act
22. The Commission realleges and incorporates by reference
Paragraphs 1 through 18 above.
23. During the relevant period, MVRI and Temple directly or
indirectly, in the offer or sale of any security, by the use of means or
instrumentalities of interstate commerce, or of the mails, with scienter:
(a) employed any device, scheme, or artifice to defraud;
(b) obtained money or property by means of any untrue
statement of a material fact or any omission of a material fact necessary in order to
make the statements made, in light of the circumstances under which they were
made, not misleading; or
(c) engaged in any transaction, practice, or course of business
which operates or would operate as a fraud or deceit upon the purchaser.
24. MVRI and Temple have violated and, unless restrained and
enjoined, will continue to violate Section 17(a) of the Securities Act, 15 U.S.C. §
77q(a).
PRAYER FOR RELIEF
WHEREFORE, the Commission respectfully requests that this Court:
I.
Permanently enjoin defendants MVRI and Temple from violating Sections
10(b) of the Exchange Act and Rule 10b-5 thereunder and Section 17(a) of the
Securities Act.
II.
Order defendants MVRI and Temple to disgorge any ill-gotten gains.
III.
Order defendants MVRI and Temple to pay civil penalties.
IV.
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COMPLAINT AGAINST MVRI AND TEMPLE
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Retain jurisdiction of this action in accordance with the principles of equity
and the Federal Rules of Civil Procedure in order to implement and carry out the
terms of all orders and decrees that may be entered, or to entertain any suitable
application or motion for additional relief within the jurisdiction of this Court.
V.
Grant such other and further relief as this Court may determine to be just and
necessary.
Dated: , 2004 Respectfully submitted,
_______________________
Sheila E. O’Callaghan
Attorney for Plaintiff
SECURITIES AND EXCHANGE
COMMISSION