(March 12 – 16:10 ET) – The U.S. Securities and Exchange Commission has filed a complaint and obtained an emergency asset freeze against a Florida company, accusing it of defrauding Christian investors and using the proceeds to buy drugs and porn.

The SEC’s complaint, against Families On Line Corp., its CEO Mark Thurman and its COO Robert Fiene, alleges that the defendants raised US$3.9 million from approximately 410 investors — primarily fundamentalist Christians.

According to the SEC , Thurman and Fiene stole at least US$1.8 million of investor funds for their personal uses, “including purchases made at stores specializing in drug paraphernalia and adult novelty items”.

The SEC alleges that between July 1999 and December 2000, the defendants raised investor funds in unregistered securities transactions by using, among other things, a fake letter from a Christian-based television network, false claims of projected subscribers and profits, and complete fabrications about an impending IPO. The SEC’s complaint also alleges that the defendants failed to disclose to investors that both are convicted felons.

Upon the SEC’s motion, the U.S. District Court of the Southern District of Florida entered an order temporarily freezing the assets of all of the defendants. The U.S. Attorney’s Office for the Southern District of Florida also announced the arrests of the pair on charges of securities fraud and other crimes.