CONFERENCES

The Securities and Exchange Commission obtained an emergency court order yesterday to halt an ongoing scheme by a Palmdale, Calif., company and two individuals who defrauded investors through a series of false claims— including that Warren Buffett is associated with the company.

The SEC alleges that International Realty Holdings Inc. (IRH), Ottoniel Medrano and Leticia Isabel Medrano raised hundreds of thousands of dollars from investors in several states since October 2008. Ottoniel Medrano is a prison guard at California City Correctional Center. The Medranos and IRH defrauded investors by making such false claims as Warren Buffett being "Honorary Chairman" at IRH, Berkshire Hathaway and Credit Suisse being involved in the investment, and IRH having $4.8 billion in total assets and owning various properties throughout Asia. After obtaining money from investors, the Medranos transferred funds to offshore bank accounts.

"As alleged in our complaint, the Medranos and IRH lured investors through brazen misrepresentations intended to give a false sense of legitimacy and security regarding IRH's business," said Rosalind Tyson, director of the SEC's Los Angeles Regional Office.

According to the SEC's complaint, filed in federal district court in Los Angeles, the Medranos and IRH raised several hundred thousand dollars from investors by selling preferred stock in IRH. According to IRH's offering materials, the Medranos and IRH intended to raise up to $6 billion in the offering.

The SEC's complaint alleges that IRH and the Medranos violated the antifraud and registration provisions of the federal securities laws. In addition to the emergency and interim relief that has been obtained, the SEC seeks a final judgment permanently enjoining the defendants from violating the antifraud and registration provisions and ordering them to pay disgorgement of ill-gotten gains and financial penalties.