Jefferson City, Missouri.— Secretary of State Jay Ashcroft announced the findings of two investigations conducted by the Secretary of State’s Securities Division involving possibly more than 42 victims. One of the investigations involved a local Lebanon CPA.
“These cases involve unregistered brokers gaining the trust of Missourians and using those Missourians’ hard-earned dollars for their own personal purposes, including paying prior debts and even financing trips to Six Flags,” Ashcroft said. “Investors must be constantly alert to offers that seem too good to be true, and to know they can contact our Securities Division at any time to see if a purported broker is registered with the state. That said, if you believe you have been a victim of fraud in these cases – or in any other investment situation – please call our office.”
Enforcement officials filed a Petition based on findings that Douglas Richardson, a Certified Public Accountant, embezzled more than $3 million from 21 victims over a three-year period ending in 2016. Richardson, while serving as Chief Financial Officer for an Oklahoma corporation, provided subscription agreements to investors in exchange for funds through his Missouri limited liability company.
The subscription agreements stated that investment funds would purchase Class A-1 shares in the Oklahoma corporation and that the subscription shares were securities. Richardson also told investors the funds would be used to develop a power supply semiconductor chip/module through the Oklahoma corporation.
The agency says Richardson personally solicited at least 21 investors, mostly from Lebanon, Mo., and then misappropriated the funds to pay back debt from a prior failed business. The Oklahoma corporation- Smart Prong Technologies. has also filed suit against Richardson, currently pending in Greene County, Mo. The Enforcement Section within the Securities Division seeks an order from Securities Commissioner David Minnick for restitution of investment losses in addition to costs of the investigation and civil penalties.
In another investigation, Mark Stafford, an unregistered and non-exempt agent, improperly offered and sold securities in Missouri between 2012 and 2016. At least 21 investors – most over 60 years old and considered elderly – made investments totaling almost $700,000 to the Stafford Financial Firm.
Stafford is alleged to have concentrated his efforts on elderly St. Louis residents, primarily in the North County areas of Ferguson and Florissant. He is alleged to have committed affinity fraud by promoting fraudulent securities investments through church connections and to have offered free meal enticements.
The investigation determined that Stafford solicited investors to fund purported IRAs or annuities, promising a return on those investments and providing fraudulent statements from the purported investments in which he never invested. Instead, Stafford misappropriated investor funds by trading in foreign exchange accounts and using the funds personally at places such as liquor stores, Bed Bath and Beyond and Six Flags.