UNITED STATES OF AMERICA

UNITED STATES OF AMERICA

Before the

SECURITIES AND EXCHANGE COMMISSION

ADMINISTRATIVE PROCEEDING

File No. 3-15211

____________________________________

:

In the Matter of

:

:

GREGG C. LORENZO,

:

FRANCIS V. LORENZO, AND

:

CHARLES VISTA, LLC,

:

:

Respondents.

:

____________________________________:

PROPOSED PLAN OF DISTRIBUTION

1.

Purpose and Background. This proposed plan of distribution (the

“Plan”) has been developed pursuant to the Commission’s Order Making Findings

and Imposing Remedial Sanctions and a Cease-and-Desist Order Pursuant to Section

8A of the Securities Act of 1933 and Sections 15(b), 21B, and 21C of the Securities

Exchange Act of 1934 as to Respondents Gregg C. Lorenzo (“Lorenzo”) and Charles

Vista, LLC (“Charles Vista”) (collectively “Respondents”) dated November 20, 2013

(the “Order”) (Securities Act Rel. No. 9480 (November 20, 2013)). The Plan

provides for the distribution of funds collected from the disgorgement, prejudgment

interest, and civil penalties paid pursuant to the Order. The Plan’s methodology

proposes to pay affected customers of Charles Vista who suffered harm by virtue of the

fraudulent misrepresentations made by Respondents.

The Order found that Respondents made fraudulent misrepresentations to

several customers of Charles Vista, a broker-dealer controlled by Lorenzo, to induce

them to invest in convertible debentures issued by a start-up waste management

company, Waste2Energy Holdings, Inc. (“W2E”). The Order further found that

Charles Vista had a considerable financial interest in the debentures offering and was

the exclusive placement agent for the issuance of 12% W2E debentures. The

debentures were convertible to W2E stock, which is a penny stock. Additionally, the

Order found that W2E’s financial situation was precarious and W2E’s securities were

extremely speculative because, among other reasons, the company had millions of

dollars of debt that was senior to the debt W2E was issuing through the debentures

offering. Finally, the Order found that after Respondents knowingly or recklessly

made fraudulent misrepresentations to several Charles Vista customers, these

customers invested in W2E debentures.

In the Order, Lorenzo and Charles Vista were jointly ordered to pay disgorgement

of $130,000 and prejudgment interest of $20,000. In addition, Lorenzo was ordered to

pay a civil penalty of $375,000 and Charles Vista was ordered to pay a civil penalty of

$4,350,000. In accordance with the Order, Lorenzo has paid $130,000 in

disgorgement, $20,000 in prejudgment interest, and a civil penalty of $375,000.

Charles Vista has not made any payments to date. The Order created a Fair Fund

pursuant to Section 308(a) of the Sarbanes-Oxley Act of 2002, as amended. The Fair

Fund is comprised of the disgorgement, interest, and penalties paid and to be paid by the

Respondents (the “Fair Fund”) and is for distribution to affected customers of Charles

Vista who suffered harm by virtue of the Respondents’ fraudulent misrepresentations

(individually, each an “Eligible Customer;” collectively, “Eligible Customers”). The

Fair Fund is subject to the continuing jurisdiction and control of the Commission and

the Fair Fund is currently on deposit in a Commission designated account at the

United States Department of the Treasury (“U.S. Treasury”). The Plan is subject to

approval by the Commission, and the Commission retains jurisdiction over the

implementation of the Plan. Any outstanding payments made pursuant to the Order

and received after approval of the Plan will be added to the Fair Fund and distributed

in accordance with the Plan.

Under the Plan and unless additional funds are paid pursuant to the Order such

that the total amount available for distribution equals or exceeds the Harm Amount, as

defined in paragraph 7, a pro rata share of investors’ losses will be distributed to

Eligible Customers from the “Net Fair Fund,” which is the Fair Fund, less any reserve

for taxes, fees or other expenses of administering this Plan.

2.

Fund Administrator. Nichola L. Timmons, Assistant Director, Office

of Distributions in the Commission’s Division of Enforcement, is proposed to act as

the administrator of the Fair Fund (the “Fund Administrator”). As a Commission

employee, the Fund Administrator will receive no compensation from the Fair Fund

for her services in administering the Fair Fund. In accordance with Rule 1105(c) of

the Commission’s Rules on Fair Fund and Disgorgement Plans (“Rules”), 17 C.F.R.

§§ 201.1100 through 201.1106, no bond is required since the Fund Administrator is a

Commission employee. In carrying out her duties, the Fund Administrator may be

assisted by other Commission staff acting under her supervision.

The Fund Administrator will, among other things: oversee the administration

of the Fair Fund, obtain mailing information for Eligible Customers, distribute money

from the assets of the Fair Fund in accordance with the Plan, resolve disputes, and

distribute the Fair Fund to Eligible Customers in accordance with the Plan. The Fund

Administrator will also cooperate with the Tax Administrator, defined in paragraph 3,

as necessary, prepare a final accounting with assistance from the Tax Administrator,

and provide the Tax Administrator with funds to pay tax liabilities and tax compliance

fees and costs, pursuant to the Omnibus Order Directing the Appointment of Tax

Administrator in Administrative Proceedings that Establish Distribution Funds

(Exchange Act Rel. No. 68683 (January 17, 2013)).

3.

Tax Administrator. The Commission has appointed Damasco and

Associates, LLP as the tax administrator (“Tax Administrator”) of the Fair Fund

(Exchange Act Rel. No. 72856 (August 15, 2014)). The Tax Administrator will be

compensated for reasonable costs and expenses from the Fair Fund in accordance with

its 2013-2015 Engagement Letter Agreement with the Commission. Tax obligations

will be paid out of the Fair Fund.

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4.

Specification of Eligible Fair Fund Recipients. The Fund

Administrator will distribute the Net Fair Fund to those Eligible Customers that have

been harmed by the conduct described in the Order. A customer will be deemed

harmed only if that customer suffered harm by virtue of the conduct described in the

Order and as calculated pursuant to paragraph 7 of the Plan.

5.

No claims-made process. The Fair Fund is not being distributed

according to a claims-made process, so the procedures for making and approving

claims are not applicable.

6.

Qualified Settlement Fund. The Fair Fund constitutes a Qualified

Settlement Fund (“QSF”) under Section 468B(g) of the Internal Revenue Code, 26

U.S.C. § 468B(g), and related regulations, 26 C.F.R. §§ 1.468B-1 through 1.468B-5.

7.

Methodology for Determining Distribution Amounts. The Fund

Administrator will determine the amount to be distributed to each Eligible Customer

in the following manner. First, the Fund Administrator will determine, for each

affected customer, using information collected by the Commission staff the harm

amount that each Eligible Customer incurred by virtue of the conduct described in the

Order (“Harm Amount”). The Harm Amount is calculated as the sum of actual

principal investments by an Eligible Customers (“Investment Amount”), less any

monies received by Eligible Customers as settlements, insurance, or other payments

in connection with this matter from Respondents, or any other third party. Second,

the Fund Administrator will determine what percentage of the total pooled Harm

Amounts of all Eligible Customers is represented by each individual Eligible

Customer’s Harm Amount (“Pro Rata Share”). Finally, for each Eligible Customer,

the Fund Administrator will multiply the Pro Rata Share by the Net Fair Fund to

determine each Eligible Customer’s distribution amount (“Fair Fund Payment”).

In the view of the Fund Administrator, this methodology constitutes a fair and

reasonable allocation of the Fair Fund. Based on this methodology, it is anticipated

that there will be one distribution to the Eligible Customers, which will take place as

outlined in paragraph 9.

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Based on this methodology, the individual Investment Amounts, Harm

Amounts, and percentages of pooled harm for Eligible Customers are as follows:

Eligible

Customer

Investment

Amount

Third Party

Payment

Received

Harm

Amount

% of

Pooled

Harm of

All

Eligible

Customers

Eligible

Customer #1

Eligible

Customer #2

Eligible

Customer #3

Eligible

Customer #4

Eligible

Customer #5

Eligible

Customer #6

$41,800

None

$41,800

6.00%

$200,000

None

$200,000

28.69%

$125,000

$80,000

$45,000

6.45%

$200,000

None

$200,000

28.69%

$15,000

None

$15,000

2.15%

$195,400

None

$195,400

28.03%

TOTALS

$777,200

$80,000

$697,200

100%

8.

Procedures for Locating and Notifying Eligible Customers. On the

basis of information obtained by the Commission staff based on review and analysis

of applicable records, the Fund Administrator will identify the Eligible Customers.

Within sixty (60) days of the Commission’s approval of the Plan, the Fund

Administrator will send each Eligible Customer a notice regarding the Commission’s

approval of the Plan, and, including as appropriate, a statement characterizing the

distribution, a link to the Plan posted on the Commission’s website and instructions

for requesting a copy of the Plan, a Harm Amount calculation and a preliminary

calculation of the Eligible Customer’s distribution check amount (“Fair Fund

Payment”), a description of the tax information reporting and other related tax

matters, the procedure for the distribution as set forth in the Plan, and the name of the

Fund Administrator to contact with questions regarding the distribution (the “Plan

Notice”). The Fund Administrator will coordinate with the Tax Administrator to

request information from each Eligible Customer that is needed to accomplish the

distribution in accordance with applicable tax requirements relating to the Fair Fund.

If a Plan Notice and/or Fair Fund Payment are returned as undeliverable, the

Fund Administrator will make all reasonable efforts to ascertain an Eligible

Customer’s correct address. The Fund Administrator will then resend the Plan Notice

and/or Fair Fund Payment to the Eligible Customer’s new address within thirty (30)

days of receipt of the returned Plan Notice and/or Fair Fund Payment. If the Plan

Notice and/or Fair Fund Payment is returned again, and the Fund Administrator,

despite all reasonable efforts, is unable to find an Eligible Customer’s correct address,

the Eligible Customer will be removed from the distribution and the allocated amount

of the Fair Fund Payment will be added to the Net Fair Fund and may be distributed

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to the remaining Eligible Customers. In no event will an Eligible Customer receive

from the Fair Fund more than the Eligible Customer’s Harm Amount.

9.

Distribution Timing. The Fund Administrator will use her best efforts

to start the distribution within one hundred and twenty (120) days of the Plan’s

approval.

10.

Bureau of the Fiscal Service; Validation and Approval of

Disbursement of the Fair Fund. The Fair Fund disbursement to Eligible Customers

will be implemented by the Commission and disbursed through the U.S. Treasury’s

Bureau of the Fiscal Service (“BFS”), which will mail checks or electronically

transfer funds to each payee as instructed by the Fund Administrator. The Fund

Administrator will compile the payee information and prepare a payment file to make

the disbursements through BFS. Pursuant to Rule 1101(b)(6), the Fund Administrator

will obtain an order from the Commission to disburse the Fair Fund.

The Fund Administrator will work with BFS to obtain information about

uncashed checks, any returned items due to non-delivery, insufficient addresses,

and/or other deficiencies. The Fund Administrator is responsible for researching and

reconciling errors and reissuing payments when possible. The Fund Administrator

also is responsible for accounting for all payments. Checks issued by BFS will state

on their face that they are valid for one (1) year. If any checks issued are not cashed

within the one (1) year time period, the Fund Administrator will work with BFS to

identify all uncashed checks. In the event that there are uncashed checks, the Fund

Administrator will determine the extent to which, under the circumstances in this

distribution, it would be appropriate and feasible to make additional efforts to contact

investors holding such checks. Following the conclusion of any efforts by the Fund

Administrator to locate any such Eligible Customers, the amount of all uncashed

checks will be credited to the Fair Fund account and may, if ordered by the

Commission, be distributed to the remaining Eligible Customers.

11.

Accountings. When all funds have been disbursed, except for the

residual described in paragraph 16 of the Plan, the Fund Administrator will submit a

final accounting pursuant to Rule 1105(f) for the approval of the Commission prior to

termination of the Fair Fund and discharge of the Fund Administrator. Since the

funds are being held in a Commission designated account at the U.S. Treasury, and

Commission staff is proposed as the Fund Administrator, no interim accountings will

be made.

12.

Expenses of Administration. Fees and other expenses of administering

the Plan will be paid from the Fair Fund.

13.

Amendments and Procedural Deadline Extensions. The Fund

Administrator will take reasonable and appropriate steps to distribute the Net Fair

Fund according to the Plan. If there are any changes to the Plan that are determined to

be material, Commission approval is required prior to implementation by amending

the Plan, which may be done upon the motion of any party, the Fund Administrator,

or upon the Commission’s own motion. Immaterial changes may be made by the

Fund Administrator. For good cause shown, the Fund Administrator may extend any

of the procedural dates set forth in the Plan.

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14.

Procedure for the Receipt of Additional Funds. Should any

outstanding payments or any other additional funds be received for this matter by the

Commission prior to the Commission’s termination of the Fair Fund, such funds will

be added to the Net Fair Fund and distributed in accordance with the Plan’s

methodology in paragraph 7.

15.

Procedures for Disputing Amounts Received. Disputes will be limited

to the calculation of an Eligible Customers’ Harm Amount. Within thirty (30) days of

the date that an Eligible Customer’s disbursement is made, the Fund Administrator

must receive a written communication detailing the dispute along with any supporting

documentation. The Fund Administrator will investigate the dispute, and such

investigation will include a review of the written dispute as well as any supporting

documentation. Within thirty (30) days of receipt of the written dispute, the Fund

Administrator will notify the Eligible Customer of her resolution of the dispute, which

will be final. This procedure will be set forth in the Plan Notice.

16.

Disposition of Undistributed Funds. A residual account within the Fair

Fund will be established for any amounts remaining after the final disbursement to

Eligible Customers from the Fair Fund. The residual account may include funds

reserved for future taxes and related expenses, distributions from checks that have not

been cashed, from checks that were not delivered or from funds returned to the

Commission, tax refunds for overpayment or for waiver of IRS penalties. All funds

remaining in the residual account will be transferred to the U.S. Treasury after the

final accounting is approved by the Commission.

17.

Termination of the Fair Fund. Following the final disbursement from

the Net Fair Fund to Eligible Customers, the Fund Administrator will make

arrangement for the final payment of taxes and Tax Administrator fees and will

submit a final accounting to the Commission. The Fair Fund will be eligible for

termination after all of the following have occurred: (1) a final accounting, in the

Division of Enforcement’s standard accounting form, has been submitted by the Fund

Administrator, and has been approved by the Commission; and (2) all taxes, fees, and

expenses have been paid. When the Commission has approved the final accounting,

staff will seek an order from the Commission: (1) to transfer the remaining residual

amounts to the U.S. Treasury; (2) to terminate the Fair Fund; and (3) to discharge the

Fund Administrator.

18.

Notice of Proposed Plan and Opportunity for Comment. The Notice of

Proposed Plan of Distribution and Opportunity for Comment (the “Notice”) will be

published in the SEC Docket and on the Commission’s website at

http://www.sec.gov/litigation/fairfundlist.htm. Any person or entity wishing to

comment on the Plan must do so in writing by submitting their comments within

thirty (30) days of the date of the Notice (i) to the Office of the Secretary, United

States Securities and Exchange Commission, 100 F Street, NE, Washington, DC

20549-1090; (ii) by using the Commission’s Internet comment form

(www.sec.gov/litigation/admin.shtml); or (iii) by sending an e-mail to rulecomments@sec.gov. Comments submitted by e-mail or via the Commission’s

website should include “Administrative Proceeding File Number 3-15211” in the

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subject line. Comments received will be available to the public. Thus, persons should

only submit information that they wish to make publicly available.

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