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SEC closes site on fraud charges

The Securities and Exchange Commission shut down an Internet site accused of fraud.

The Securities and Exchange Commission has closed an Internet site accused of fraudulently selling promissory notes.

The SEC said the notes falsely purported to be backed by U.S. government securities and were supposedly guaranteed to earn tax-free annual returns of 12 percent to 22 percent. The site was offering an investment opportunity to make "$150,000 annually, tax free."

A U.S. District Court judge in the Southern District of Florida issued a temporary restraining order against William B. Sellin II and his two corporations, Zaitech Holdings and Baccaratt Holdings, according to David Chase, legal counsel with the SEC.

"We think this is a significant case because the people who are committing this kind of fraud need to know that we will bring a force of action to appropriate cases," Chase said.

The SEC said Sellin, a convicted felon and repeat securities law violator, solicited investors through at least 43 advertisements in at least 21 newsgroups on the Internet, including CompuServe's online services.

The court order freezes Sellin's assets and orders him to present records from the business. The SEC also seeks preliminary and permanent injunctions and financial penalty against Sellin.

The SEC has begun looking for potential fraud online more vigorously as the popularity of the Internet has boomed, and the agency recently opened the Enforcement Complaint Center at its site, as well as a fraud hotline.

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