The promoters of a planned Internet shopping mall who raised more than $1 million through telemarketing and direct mail solicitations are being sued for fraud by the Securities and Exchange Commission.
The suit alleges that between August 1996 and May 1998, Home Shopping Partners and Telesys Communications–seeking to finance a new retail shopping outlet on the Internet–raised the money by falsely promising investors annual returns of between 10% and 216%. Both companies are based in Los Angeles and owned by Eleazer Heracleopolis of Granada Hills, CA.
The SEC suit, filed in U.S. District Court in Los Angeles, seeks full repayment to investors plus sanctions for violating SEC rules. It also alleges that Heracleopolis and his companies, none of which could be reached for comment, failed to assure investors that all of their money “would be spent exactly as indicated.”
According to the SEC, Heracleopolis used 39% of the money to buy a commercial laundry, and to pay himself, members of his family and sales representatives.
The suit also alleges Heracleopolis and his companies sold investments in the proposed Internet shopping mall without registering with the SEC or using a registered securities broker/dealer for the sales.
