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SEC: Ponzi Scheme Involved Gambling

17 October 2003

CONNECTICUT – As reported by the Connecticut Day: "Blake A. Prater, the man the Securities and Exchange Commission says masterminded an alleged Internet Ponzi scheme based in Gales Ferry, also operated a `production gambling' company that paid employees to bet company money at craps tables at local casinos, according to court documents and Prater.

"The company, Mpactplayers, Ltd., sent employees to Mohegan Sun and Foxwoods casinos in four-hour shifts, giving them between $300 and $2,400 with which to gamble, said two former employees. Working in five-member teams, the two former employees said, the players would use gaming techniques that Prater devised and taught at his Gales Ferry office.

"The players always played craps, looking for patterns in the dice and placing bets accordingly, the two said.

"…In September the SEC filed a civil lawsuit that alleges that Prater, 51, was selling unregistered securities through Wellspring Capital Group, Inc. to fuel a Ponzi scheme designed to bilk consumers. In a filing for the lawsuit, the SEC describes the gambling company to bolster its claims that Prater sold unlicensed investments.

"…While he said Mpactplayers gambling money wasn't from Wellspring clients, Prater wouldn't say where the company got funds to bet.

"…In its lawsuit, the SEC says Prater solicited money from a Web site to fund the gambling business that promised $360 return on a $20 investment.

"In documents seized from Prater's home, Prater boasted of making $2.9 million from Connecticut casinos, the SEC says…"

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