JUST A REMINDER: https://www.sec.gov/litigation/li
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Posted On: 01/22/2016 4:16:40 PM
JUST A REMINDER: https://www.sec.gov/litigation/litreleases/lr14963.txt
SECURITIES AND EXCHANGE COMMISSION
LITIGATION RELEASE NO. 14963, June 24, 1996
SECURITIES AND EXCHANGE COMMISSION V. MYRON BARRY MICHAELS AND
HOLLY S. MICHAELS
Civil Action No. CV 95-2499 LGB (BQRx)
The Securities and Exchange Commission ("Commission"
announced that the United States District Court for the Central
District of California ordered a permanent injunction,
disgorgement of $363,306.44 and civil penalties against Myron
Barry Michaels (aka Barry Michaels) and Holly S. Michaels on June
19, 1996. The order issued by Judge Lourdes G. Baird found that
the husband and wife couple, residents in Las Vegas, Nevada,
participated in the fraudulent offering of $5 million of
unregistered stock of a discount start-up airline, Family
Airlines, Inc. ("Family" in 1992 and 1993, before they were
ousted from the airline by a group of Family investors.
Specifically, the Court found that the Michaelses misused
funds and made misrepresentations and/or omissions of material
facts to investors in connection with the offer and sale of
unregistered Family stock, both orally and in Family's Private
Placement Memorandum. The misrepresentations concerned: (1) the
use of investor proceeds; (2) Family's financial condition; (3)
the association of certain individuals with Family; (4) the
likelihood of Department of Transportation ("DOT" and Federal
Aviation Administration ("FAA" certification; and (5) the nature
and status of two financial commitments in the amount $25-30
million. The Michaelses fraudulently used investor money to fund
a lavish lifestyle that included a $50,000 down payment on their
home, an exclusive country club membership, lease payments on
"his" and "hers" Mercedes Benz automobiles, payment of a personal
debt of $20,000, and payments to themselves of $246,184.15.
The Court also found that in connection with applying to the
DOT/FAA for Family flight certification, the Michaelses lied to
the DOT and FAA about numerous civil lawsuits and judgments
against them. The Commission presented the Court with evidence
that at least 20 civil lawsuits had been filed in Los Angeles
County alone against the Michaelses for engaging in similar
investment dealings. The Commission also presented evidence that
the California Department of Corporations issued a Desist and
Refrain Order against Barry Michaels in 1983 for engaging in
similar fraudulent conduct relating to a cosmetics company.
Family investors initially became suspicious of the
Michaelses' activity after someone researched and discovered the
==========================================START OF PAGE 2======
Michaelses' significant legal history and reported it to the
FAA/DOT. Immediately thereafter, the DOT/FAA refused to issue
flight certification to Family unless the Michaelses stepped down
as officers and directors of Family. The airline ultimately was
dissolved.
SECURITIES AND EXCHANGE COMMISSION
LITIGATION RELEASE NO. 14963, June 24, 1996
SECURITIES AND EXCHANGE COMMISSION V. MYRON BARRY MICHAELS AND
HOLLY S. MICHAELS
Civil Action No. CV 95-2499 LGB (BQRx)
The Securities and Exchange Commission ("Commission"
announced that the United States District Court for the Central
District of California ordered a permanent injunction,
disgorgement of $363,306.44 and civil penalties against Myron
Barry Michaels (aka Barry Michaels) and Holly S. Michaels on June
19, 1996. The order issued by Judge Lourdes G. Baird found that
the husband and wife couple, residents in Las Vegas, Nevada,
participated in the fraudulent offering of $5 million of
unregistered stock of a discount start-up airline, Family
Airlines, Inc. ("Family"
in 1992 and 1993, before they were ousted from the airline by a group of Family investors.
Specifically, the Court found that the Michaelses misused
funds and made misrepresentations and/or omissions of material
facts to investors in connection with the offer and sale of
unregistered Family stock, both orally and in Family's Private
Placement Memorandum. The misrepresentations concerned: (1) the
use of investor proceeds; (2) Family's financial condition; (3)
the association of certain individuals with Family; (4) the
likelihood of Department of Transportation ("DOT"
and Federal Aviation Administration ("FAA"
certification; and (5) the nature and status of two financial commitments in the amount $25-30
million. The Michaelses fraudulently used investor money to fund
a lavish lifestyle that included a $50,000 down payment on their
home, an exclusive country club membership, lease payments on
"his" and "hers" Mercedes Benz automobiles, payment of a personal
debt of $20,000, and payments to themselves of $246,184.15.
The Court also found that in connection with applying to the
DOT/FAA for Family flight certification, the Michaelses lied to
the DOT and FAA about numerous civil lawsuits and judgments
against them. The Commission presented the Court with evidence
that at least 20 civil lawsuits had been filed in Los Angeles
County alone against the Michaelses for engaging in similar
investment dealings. The Commission also presented evidence that
the California Department of Corporations issued a Desist and
Refrain Order against Barry Michaels in 1983 for engaging in
similar fraudulent conduct relating to a cosmetics company.
Family investors initially became suspicious of the
Michaelses' activity after someone researched and discovered the
==========================================START OF PAGE 2======
Michaelses' significant legal history and reported it to the
FAA/DOT. Immediately thereafter, the DOT/FAA refused to issue
flight certification to Family unless the Michaelses stepped down
as officers and directors of Family. The airline ultimately was
dissolved.
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