U.S. Securities and Exchange Commission

Litigation Release No. 18685 / April 28, 2004

SECURITIES AND EXCHANGE COMMISSION v. PAUL HOWE NOE, ET AL., Civil Action No. 3:02-485-17 (D.S.C., filed February 14, 2002)

UNITED STATES v. PAUL HOWE NOE, ET AL., Criminal No. 3:02-0096 (D.S.C., December 2, 2003)

SEC SETTLES CASE AGAINST FOUR INDIVIDUALS CHARGED WITH CONDUCTING HIGH-YIELD INVESTMENT SCHEME

The Securities and Exchange Commission announced today that on April 26, 2004, the United States District Court for the District of South Carolina entered final judgments against defendants Paul Howe Noe, Nuell W. Paschal, Noel Alelov and Carolyn M. Kaplan arising from charges that they were part of a group that conducted a fraudulent high-yield investment scheme that raised more than $1.1 million from more than 20 investors in 2001 and 2002. Without admitting or denying the allegations in the Commission's complaint, Noe, Paschal, Alelov and Kaplan consented to the entry of the final judgments, which permanently enjoin them from violating the antifraud provisions of the federal securities laws.

In the Complaint filed on February 14, 2002, the Commission alleged that Noe and his brother, Clif Goldstein, used two entities that they controlled along with Kaplan -- Great American Trust Company and Great American Trust Corporation -- to operate a fraudulent high-yield investment scheme that targeted both cash-poor companies unable to obtain funding through conventional means, and individual investors who desired to earn high investment returns quickly. Noe and Goldstein served as the primary offerors of the investment programs that comprised the fraudulent scheme, while Paschal and Alelov served as selling agents. As a result of their efforts, the defendants raised more than $1.1 million from more than 20 individuals.

The final judgments permanently enjoin Noe, Paschal, Alelov and Kaplan from violating Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. On the basis of their representations in sworn financial statements and other documents and information furnished to the Commission, payment of disgorgement by Noe, Paschal, Alelov and Kaplan was waived and civil penalties were not imposed.

On the same day that the final judgments were entered, the Court also granted the Commission's motion to dismiss the case against defendants, Goldstein and Russell B. Gerstein, both of whom died during the pendency of the litigation. Previously, default judgments were entered against Great American Trust Company and Great American Trust Corporation.

Prior to Goldstein's death, he and Noe were criminally prosecuted by the United States Attorney's Office for the District of South Carolina for the same conduct alleged in the Commission's complaint. Noe was convicted in a jury trial of five counts of wire fraud, one count of transportation of stolen securities, and one count of conspiracy to defraud. Goldstein pleaded guilty to one count of conspiracy to commit wire fraud. On December 2, 2003, Noe and Goldstein were sentenced to prison terms of 78 months and 46 months, respectively and jointly and severally ordered to pay $645,708.20 in restitution to 21 victims.

Additional information can be found in Litigation Release Nos. 17362 (February 14, 2002), 18349 (September 12, 2003) and 18498 (December 10, 2003).

http://www.sec.gov/litigation/litreleases/lr18685.htm