UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 17464 / April 10, 2002

Securities and Exchange Commission v. FoneCash, Inc., and Daniel E. Charboneau, Civil Action No. 1:02CV00651RJL (D.D.C. April 8, 2002)

The Securities and Exchange Commission ("Commission") announced today that it has filed a complaint in the United States District Court for the District of Columbia against FoneCash, Inc. ("FoneCash"), a Delaware corporation with its principal office located in New York, New York, and Daniel E. Charboneau ("Charboneau"), its president, chief executive officer and chairman of the board.

The complaint alleges that a registration statement and amendments, filed with the Commission by FoneCash in December 2001, January 2002 and March 2002, and signed by Charboneau, contain material misrepresentations and omissions. Such misrepresentations include, among other things, the claim that FoneCash manufactures credit card terminals under a specified patent to which it obtained the exclusive rights in 1997, when in fact, the patent had lapsed in 1993. The complaint further alleges that Fonecash maintains a website which grossly misrepresents the company's business and, through Charboneau, has distributed via the internet several misleading press releases which falsely describe various mergers and acquisitions.

The complaint seeks preliminary and permanent injunctions enjoining the defendants from further violations of Section 17(a) of the Securities Act of 1933 and Sections 10(b) and 13(a) of the Securities Exchange Act of 1934 and Rules 10b-5, 12b-20, 13a-1 and 13a-13 thereunder, and enjoining Charboneau from further violations of Section 16(a) of the Exchange Act and Rules 16a-2 and 16a-3 thereunder. The Commission further seeks the disgorgement of all ill-gotten gains with prejudgment interest, and the imposition of civil penalties against the defendants.

The Commission also instituted proceedings under Section 8(d) of the Securities Act of 1933 to determine whether a stop order should be issued suspending the effectiveness of the FoneCash registration statements and amendments.

For tips on how to avoid Internet "pump-and-dump" stock manipulation schemes, visit http://www.sec.gov/investor/online/pump.htm. For more information about Internet fraud, visit http://www.sec.gov/divisions/enforce/internetenforce.htm. To report suspicious activity involving possible Internet fraud, visit http://www.sec.gov/complaint.shtml.

See also Securities Act Release No. 8079 (D.D.C. April 8, 2002).