USA: The Murderous Aspect of Securities Fraud
| Pages | 116-118 |
| Date | 01 February 1995 |
| DOI | https://doi.org/10.1108/eb025692 |
| Published date | 01 February 1995 |
| Author | Philip Rutledge |
| Subject Matter | Accounting & finance |
USA: The Murderous Aspect of Securities Fraud
Philip Rutledge
Journal of Financial Crime — Vol. 3 No. 1 — International
The popular notion is that securities frauds are a
non-violent, white-collar variety of criminal enter-
prise. Not necessarily so in a recent case generally
known as Premier Benefit Capital Trust. The main
perpetrators of this alleged fraud, when being
called to account before a court for their activities,
appear to have turned decidedly violent. They are
accused of conspiracy to murder the Federal Court
judge hearing the case.
The saga of Premier Benefit Capital Trust and
associated entities (Premier Benefit Corporation,
Premier Financial Services, Premier Benefit Capi-
tal Trust Corporation, Dorchester Holding Trust,
Newcastle Holding Trust, First Financial Founda-
tion, Inc. and Aames Acceptance Company) began
in Florida sometime in the early 1990s. It was
then, according to a federal criminal indictment
returned by a Florida Grand Jury ('indictment'),
that Jan Weeks-Katona, Jason Spencer Weeks,
Harry W. 'Bill' Marrero, Jr, Theodore T. Navolio
and David Rose ('defendants') are alleged to have
devised a scheme to defraud the public by encour-
aging the sale of capital notes or certificates
('capital notes').
The 17-count indictment accused some or all of
the defendants of violations of federal mail and
wire fraud statutes, money laundering, interstate
transportation of stolen property, obstruction of
justice, illegal possession of silencers, illegal pos-
session of firearms and ammunition by fugitives
and conspiracy to commit murder. Specifically, the
Grand Jury charged Jan Weeks-Katona and her
22-year-old son, Jason Spencer Weeks, with con-
spiracy to murder a Federal Court judge. The
indictment also sought forfeiture of all real and
personal property traceable to money-laundering
activities.
The indictment further alleged that potential
investors were given written materials stating that
funds from the sale of capital notes would be
pooled with other investors' funds to be used to
purchase accounts receivable of creditworthy cus-
tomers at a discount. The Grand Jury, however,
accused Premier of conducting very little, if any,
legitimate business activities and converting most
of the investors' funds to the personal use of the
defendants.
As alleged in the indictment, over US$4m of
investors' funds were used to buy two seaside
mansions in Belleair Shores, Florida (in the name
of Newcastle Trust and Dorchester Trust, respec-
tively) while other amounts were wired-transferred
to an account in a Caribbean offshore bank. The
indictment also alleged that additional entities were
created (Windsor Management Trust, Edin-
borough Management Trust, Breckenridge
Management Trust and Wales Management Trust)
for the purpose of functioning as depositories or
conduits for funds raised by Premier through the
sale of capital notes to individual investors.
The indictment further alleged that Premier
Financial Services was formed to act as a 'market-
ing' arm for Premier Benefit Capital Trust to sell
the capital notes in other states and hold sales
meetings to induce individuals to become agent/
distributors of the capital notes in their local
communities. The Grand Jury also charged that
these agents were told that the capital notes were
not subject to any Government oversight and they
would be defended by the Premier Legal Depart-
ment at The Citizens Law School, an entity
created by David J. Rose and Theodore T. Nav-
olio,
against any state or federal regulatory actions.
In the Commonwealth of Pennsylvania, paid
advertisements promoting the sale of capital notes
to the public were placed in various newspapers
Page 116
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