SEC FILES EMERGENCY ACTION TO HALT $98 MILLION PRIME BANK SCHEME, RECOVER INVESTORS� FUNDS
The SEC charged Resource Development International and father-son principals David and James Edwards with orchestrating a $98 million prime bank fraud targeting over 1,300 investors by falsely promising 48–120% annual returns on non-existent bank instruments, diverting funds for personal use, and blaming payout delays on post-9/11 anti-terrorism measures, leading to emergency court orders freezing assets and repatriating offshore funds.
The SEC alleged that Resource Development International (RDI) and its principals, David and James Edwards, defrauded more than 1,300 investors out of $98 million by claiming their money would be used to trade high-yield financial instruments with top global banks, allegedly backed by the Federal Reserve—claims that were entirely false. Investors were promised annual returns of 48–120% with guaranteed principal safety and 50% of excess profits going to charity, but no such instruments or markets existed, and funds were instead used for personal expenses. The SEC obtained emergency court orders including an asset freeze, appointment of a receiver, and a repatriation order to recover millions moved offshore, while also naming accomplices Gerald Stock, Kevin Lynds, and William Whelan on charges of securities fraud and related violations.
The SEC filed an emergency action against Resource Development International (RDI) and its principals, David and James Edwards, for orchestrating a $98 million prime bank fraud that targeted over 1,300 investors nationwide, many of whom invested retirement funds. The defendants falsely claimed investor money would be used in secret, high-yield trades with 'top 25 or 50' global banks, allegedly sponsored by the Federal Reserve, promising annual returns of 48–120% with complete safety of principal and 50% of excess profits going to humanitarian causes—claims that were entirely fabricated, as no such financial instruments or markets existed. Instead, the Edwards and their team diverted investor funds for personal use and falsely blamed delays in payouts on post-9/11 anti-terrorism regulations and government freezes. The U.S. District Court in Dallas granted the SEC’s requests for a temporary restraining order, asset freeze, and appointment of a receiver to safeguard remaining assets for victims. A repatriation order was issued compelling the return of tens of millions of dollars moved offshore to jurisdictions like Nevis and Nevada. The complaint also named multiple affiliated entities—including Jade Asset Management, Intercoastal Group LLC, and Blackwolf Holding LLC—and accomplices Gerald Stock, Kevin Lynds, and William Whelan, all charged with securities fraud and related violations. The case underscored the SEC’s warning that prime bank schemes are flagrantly fraudulent and often exploit national tragedies to justify delays.
Extracted insights
- $98.00M $98 MILLION $10M–$100M
- $98.00M $98 million $10M–$100M
- person david edwards
- person harold f. degenhardt
- person james edwards
- person judge jerry buchmeyer
- person resource development international
- agency Securities and Exchange Commission
- person temporary restraining order
- SEC filed emergency action $98 million prime bank scheme
- Resource Development International operated $98 million prime bank scheme
- David Edwards bilked more than 1,300 investors
- James Edwards bilked more than 1,300 investors
- Judge Jerry Buchmeyer issued repatriation order requiring return of tens of millions of dollars moved offshore
- Judge Jerry Buchmeyer granted temporary restraining order
- SEC obtained asset freeze and receiver appointment
- Edwards and facilitators falsely claimed money would trade financial instruments with top 25 or top 50 banks
- RDI promised investors annual returns of 48 to 120 percent
- Edwards and accomplices used investor funds personal and unauthorized purposes
- SEC named defendants Resource Development International, Jade Asset Management, Sound Financial Services, David Edwards, James Edwards, Intercoastal Group entities, Gerald Stock, Kevin Lynds, William Whelan
- Harold F. Degenhardt stated prime bank schemes are flagrantly fraudulent
- Defendants claimed delays were due to September 11th and anti-terrorism regulations
FOR IMMEDIATE RELEASE 2002-47 SEC FILES EMERGENCY ACTION TO HALT $98 MILLION PRIME BANK SCHEME, RECOVER INVESTORS� FUNDS Washington, DC, March 27, 2002�The Securities and Exchange Commission announced today that it has obtained emergency court orders to shut down a nationwide, $98 million prime bank scheme and recover victims� money. In a complaint filed in the U.S. District Court in Dallas, Texas, the SEC alleged that a Tacoma, Washington company, Resource Development International (RDI), and its two principals, David and James Edwards�a �father-son team��bilked more than 1,300 investors nationwide in a �prime� bank scheme that targeted retirement funds. U.S. District Court Judge Jerry Buchmeyer issued a repatriation order Wednesday that requires the scam�s promoters to return to the U.S. tens of millions of dollars that they had moved offshore. Earlier this week, Judge Buchmeyer granted the SEC�s request for a temporary restraining order directing the promoters to immediately cease their illegal activities. The court also granted the SEC�s requests for an asset freeze and the appointment of a receiver to take possession of money and other assets for the benefit of the victims of the scam. According to the SEC complaint, the Edwards and a team of �facilitators� falsely claimed to investors that their money would be used in Europe to trade financial instruments with �top 25� or �top 50� banks in a program sponsored by the Federal Reserve and global organizations. Investors were promised annual returns of 48 to 120 percent with complete safety of principal, and with 50% of excess profit going to humanitarian causes, according to the SEC complaint However, neither the financial instruments touted by RDI nor the markets on which they purportedly trade exist. The Commission alleges that, instead, the Edwards and their accomplices used investor funds for their own personal and unauthorized purposes while telling victims that their investment returns were tied-up by anti-terrorism efforts. �These schemes involving the purported issuance, trading or use of so-called �prime� bank or �top 25 or 50� world bank instruments are flagrantly fraudulent,� said SEC Fort Worth District Administrator Harold F. Degenhardt. �Even more outrageous were claims by the defendants that delays in paying investors were due to the tragic events of September 11th and new anti-terrorism regulations.� The SEC�s lawsuit names Resource Development International, LLC, of Tacoma, Washington; Jade Asset Management, Ltd., incorporated in Nevis, West Indies; Sound Financial Services, of Tacoma, incorporated in Nevada; David Edwards, of University Place, Washington; James Edwards, of Tacoma, Washington, and the father of David Edwards; Intercoastal Group, LLC, of Manitowoc, Wisconsin, a Nevada limited liability corporation; Intercoastal Group II, LLC, of Manitowoc, Wisconsin, a Delaware and Nevada limited liability corporation; Blackwolf Holding, LLC, of Manitowoc, Wisconsin, a Nevada limited liability corporation; Gerald Stock, of Manitowoc, Wisconsin; Kevin Lynds, of Wichita Falls, Texas; and William Whelan, of Visalia, California. Additional information on how prime bank and other banking-related investment schemes work can be found at the SEC�s Prime Bank Fraud Information Center (http://www.sec.gov/divisions/enforce/primebank.shtml) in the Enforcement Section of the SEC Web site. For further information about the RDI lawsuit see SEC Litigation Release No. LR-17438. # # # Press Contacts: Spencer C. Barasch, Associate District Administrator, and Jeffrey Norris, District Trial Counsel for the SEC�s Fort Worth, Texas District Office, (817) 978- 3821.