Vision Communications to Answer Fraud Charges : Securities: SEC alleges Newport Beach company collected nearly $4.5 million from telephone sales. Firm says investors knew risks.
Vision Communications Inc. in Newport Beach is scheduled to appear in federal court today in Washington to answer charges of fraud brought by the Securities and Exchange Commission.
The operation collected nearly $4.5 million through so-called “boiler room” telephone sales offices in Costa Mesa, La Jolla and Plano, Tex., said SEC officials. Vision Communications promised 300% returns in three years on a wireless television cable system in the twin cities of Wilkes-Barre and Scranton, Pa.
The SEC charged Vision Communications with selling unregistered securities, operating a boiler room and overstating the rewards of the investment while understating the risks.
“There was a kernel of something there, but with the money they were pulling out of the operation, they could not capitalize a wireless system,” said Judith Starr, assistant chief litigation counsel for the SEC.
Howard Schiffman, a lawyer representing Vision Communications, said on Monday that he is working to resolve the dispute with the SEC. He said all of the 300 investors supplied to the company tape-recorded assertions that they knew the risks of the venture.
Investors, who spent an average of $10,000 to $15,000 each on Vision Communications’ securities, were located when they responded to a television infomercial, the SEC said. Respondents’ names were sold to Vision Communications for as much as $12 each, the SEC said, and many were elderly and invested their retirement savings.
Vision Communications principals William L. Clemens Jr. and Michael Imbesi have been ordered by two states to cease selling securities without registering as brokers or dealers, according to court documents supplied by the SEC. Clemens was ordered to cease business in Kansas, and Imbesi in Kansas and Iowa.
Last month, the state Department of Corporations raided and shut down several similar wireless sales operations in Orange, Los Angeles and San Diego counties. The operations were selling allegedly illegal investments in wireless cable.
About 250 citizens have called the Department of Corporations since the raid, said spokeswoman Lindsey Kozberg, and the calls have resulted in 20 more sales entities that the department may investigate. She said they are offering high-tech, mostly wireless cable, investments.