The U.S. Securities and Exchange Commission announced today that the U.S. District Court for the District of Nevada entered default judgment against a Canadian man for securities fraud.

The court entered a permanent injunction against Lee Gahr, a Vancouver resident and former chief operating officer of Chill Tech Industries Inc., a Nevada corporation.

The court found the defendant had violated the antifraud provisions of the federal securities laws by issuing false and misleading press releases between September 1998 and May 2000 and by selling the securities of Chill Tech without filing a registration with the commission.

It slapped Gahr with a civil penalty of US$246,409, and further ordered him to disgorge US$246,409 of profits from his fraudulent activities.

The SEC filed a civil injunctive case on Sept. 5, 2000 alleging that between September 1998 and May 2000, Chill Tech and Gahr made numerous false and misleading statements through the company’s Web site, various press releases, phony unsolicited faxes, and a magazine article.

These statements concerned the “environmentally friendly” nature of, purported testing, and Chill Tech’s ability to manufacture, the “Arctic Can,” purportedly a self-cooling beverage can.

The complaint alleged that this information was false and misleading because the Arctic Can contained Freon, an environmentally banned substance. Chill Tech neither tested nor had the ability to manufacture the Arctic Can.

It also alleged that the company’s sales “presentations” at best consisted of unsolicited correspondence. The complaint further alleged that the company’s financial projections lacked a reasonable basis because, among other reasons, they were predicated on fictitious business relations and undermined by Chill Tech’s developmental stage status, lack of a viable product, and lack of significant assets or revenues.

Further, according to the complaint Gahr sold his personal holdings of the Chill Tech common stocks into the resulting inflated market for profits of US$246,409. This action was part of the fourth nationwide Internet fraud sweep conducted by the Commission since October 1998.

The court found in the final judgment that Gahr violated antifraud provisions of the Securities Act. In the same case, the court previously entered a permanent injunction on December 27, 2000 against Chill Tech finding the defendants had violated the anti-fraud provisions of the federal securities laws by issuing false and misleading press releases. Chill Tech consented to entry of a final judgment without admitting or denying the Court’s findings.