PRESS RELEASE
State Regulator Sues to Stop Gaming Machine Investment Scheme
 
For Immediate Release
Tuesday, June 22, 2004 
 
Contact: Irving L. Faught, Administrator
  Oklahoma Department of Securities
  405-280-7700
 
 
Oklahoma City/////  The Oklahoma Department of Securities filed a civil action today in Kay County District Court alleging the fraudulent sale of securities in connection with the distribution of electronic gaming equipment on Native American lands.

Specifically, the petition alleges that Charles Scherer, doing business as Southern Cross Ltd. in Ponca City, Oklahoma, and Wrightwood, California, sold interests in future revenues from Class II gaming machines to be purchased and installed by Scherer at the Kaw Nation Casino in Newkirk, Oklahoma. Such revenue sharing arrangements are subject to the registration and anti-fraud provisions of the Oklahoma securities laws.

The petition states that Scherer eventually installed Class III gaming machines at the Kaw Nation gaming facility; machines that are illegal under state and tribal laws and regulations. Scherer is also alleged to have used investor funds to pay for his personal expenses.

The suit seeks restitution for investors, a civil penalty, and an injunction against further offers or sales of securities in or from the state of Oklahoma. “This action was filed in order to put a stop to the Defendants’ fraudulent activity in this state, and to give notice to other investors, as well as the Native American tribes, of Charles Scherer’s methods of operation,” said Irving L. Faught, Administrator of the Department of Securities.

The Administrator of the Department of Securities is charged with administration and enforcement of the Oklahoma Securities Act. The Department investigates securities fraud, the offer or sale of unregistered securities, and the sales practices of stockbrokers and investment advisers. The Administrator may seek administrative or civil sanctions against any person who violates state securities regulations and, when appropriate, make criminal referrals.
-30-
 
 
This press release, and related information, is available on the Securities Commission's web site at securities.ok.gov, by phone at (405) 280-7700, or in writing at:  Oklahoma Securities Commission, 204 North Robinson, Suite 400, Oklahoma City, OK 73102.