Monday, December 22, 2008
On December 22, the SEC issued an administrative Order Imposing Remedial Sanctions (Order) against George L. Phelps (Phelps), finding that on December 2, 2008, an order of permanent injunction was entered by consent against Phelps, permanently enjoining him from future securities violations. The SEC alleged that Phelps participated in a massive fraud orchestrated by Michael E. Kelly that victimized thousands of investors across the United States by raising at least $428 million through the offer and sale of fraudulent and unregistered securities called Universal Leases. Universal Leases were timeshares in several hotels in Cancun, Mexico, coupled with pre-arranged servicing agreements with a purportedly independent leasing agent that promised investors a safe investment and guaranteed returns. Phelps agreed to the issuance of the Order without admitting or denying any of the factual findings.