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Sunday, August 3, 2014

GEORGIA MINISTER CHARGED WITH FRAUD BY SEC

FROM:  U.S. SECURITIES AND EXCHANGE COMMISSION 

SEC Charges a Self-Proclaimed Ordained Minister in Georgia and His Company with a Fraudulent Offering of Securities.

The Securities and Exchange Commission filed fraud charges and sought emergency relief on July 31, 2014, against Thomas J. Lawler, a resident of Snellville, Georgia and a self-proclaimed minister, and his company, Freedom Foundation USA LLC for fraudulently offering and selling fictitious securities.  

The SEC's complaint filed in U.S. District Court for the Northern District of Georgia alleges that, since as early as 2004, the defendants  Lawler and Freedom Foundation have offered investors the opportunity to eliminate their debts and collect lucrative profits through the purchase of so called “administrative remedies” (“ARs”).  Defendants have told potential investors, according to the complaint, that every individual had funds established for them in an account at birth -- where, by whom, and in what amount the supposed account is established are details Lawler does not provide.  Defendants further told potential investors that the investors therefore did not owe their creditors for mortgage and other debts, and that Freedom Foundation would use its unique and proprietary process to create the ARs, which would eliminate the investors’ debt and provide a lucrative financial return.  The complaint alleges that defendants told potential investors that a $1,000 AR would cancel the investor’s debt and return $325,000 to the investor, while a $10,000 investment would supposedly entitle the investor to receive $1 million when the AR funded.  According to the complaint, Freedom Foundation claimed it would fund the ARs through a mysterious process involving a Papal decree.

The complaint alleges that Lawler has sold approximately 2,000 ARs over ten years to investors throughout the country and that he is actively soliciting additional investors.  Although the defendants continue to tell investors that funding of the ARs is “imminent,” the complaint alleges that not one investor in this scheme has received any of the promised returns. 

In response to the SEC's request for emergency relief, U.S. District Court Judge Amy Totenberg issued a temporary restraining order and imposed an asset freeze to preserve assets, among other things.  A hearing on the SEC's motion for a preliminary injunction has been scheduled for Friday, August 8th.   

The complaint alleges that defendants violated the registration and antifraud provisions of the federal securities laws, Sections 5(a), (c) and 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. 

The SEC's investigation and litigation have been conducted by Gregory F. Smolar, Karaz S. Zaki, Pat Huddleston, M. Graham Loomis and William P. Hicks of the Atlanta Regional Office.   The SEC acknowledges the assistance from the United States Attorney’s Office for the Northern District of Georgia. 

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