Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SUNDAY, September 24, 1995 TAG: 9509220130
SECTION: BUSINESS PAGE: F2 EDITION: METRO
SOURCE:
DATELINE: LENGTH: Medium
The church members knew they could not take their money with them when they died. But they didn't want to leave it to Donald Paul Clark and his associates.
Still, that is what they did, to the tune of more than $10 million.
Clark operated Atlanta-based Peoples Financial Resources Corp. before the Securities and Exchange Commission in 1993 got a permanent injunction against him, the company and several other people associated with the company. The company is no longer in business.
The SEC alleged that Clark and associates held financial seminars in churches in several states and persuaded thousands of members to invest in various ventures.
The money was supposed to be invested in stocks, government bonds, investment clubs and automatic teller machines. The SEC charged, however, that the money was ``dissipated'' by Clark and others in a number of ways.
Promoters claimed they had inside connections with overseas banks and could buy standby letters of credit from the banks at discounts of 20 percent or more. A $10 million SLC, for example, could be bought for $8 million.
But the promoters needed help from investors in raising the $8 million. Once the $8 million was raised, the $10 million SLC would be purchased and resold to someone else for $9 million. The investors would share in the $1 million profit.
It doesn't work. There is no SLC. The promoters took the investors' money and ran.
The securities office of the Georgia secretary of state has helped federal officials close down three SLC operations. One of them involved James Grady Hands, a Georgia native who claimed to be a CIA agent who had access to millions of dollars in CIA ``covert'' funds to finance an SLC if, for some reason, the foreign banks refused to do so.
Hands and two other men were caught and sentenced to federal prison - but not before they had taken $3 million from investors in Oregon, Wyoming and Georgia.
Football and Abe Lincoln
William Lincoln told people he was a direct descendant of Abraham Lincoln. Not true, said Martin Weinstein, assistant U.S. attorney in Atlanta.
Calvin Word said he had played football for the Dallas Cowboys. Not true, said a Cowboys spokesman.
But what is true, said Weinstein, was that Lincoln, Word and several other people operated First Alliance Securities Inc., an Atlanta firm that allegedly defrauded more than 1,000 investors of $3 million in 1989.
First Alliance sold penny stocks, highly speculative stocks that normally sell for $1 or less and are not listed on major exchanges.
Among the charges against First Alliance salespeople were that they did not tell investors First Alliance was manipulating the price of stocks that it promoted and First Alliance insiders had undisclosed interests in the stocks.
U.S. Attorney Kent Alexander said First Alliance salespeople described one company to investors as everything from a vodka distillery to a bottled water operator to a mining venture.
Justice took a while to come but, in recent months, Word, Lincoln and other First Alliance salespeople have pleaded guilty or been convicted of securities fraud or related charges.
Lincoln has yet to be sentenced, but the others were sentenced to prison or fined. The company is no longer operating.
Gold in the dirt
We all have heard of gold dust. But gold dirt?
That's what the caller from California said. And he was looking for investors to help finance a gold-mining operation that would double their money.
The caller said he and his partners had discovered a new method of extracting gold from the ``dirt tailings'' of old gold mines in the West. The previous owners, using old-fashioned mining techniques, had left lots of gold in the dirt.
The caller offered to sell 80 ounces of gold, valued at about $400 an ounce, for $200 an ounce. Send a down payment of $1,600 and the money would be held by a trustee until the gold was sent in 18 months, when full payment was due.
But the caller made one big mistake. The person he called was an investigator in Georgia's securities office.
The investigator initiated an investigation, which ended with a federal court conviction in California of Murray Brooks and Croft Ireland on charges of securities fraud and wire fraud.
Before their arrest, however, they had received $2 million from investors. And, of course, there was no trustee. No funds were recovered.
-Cox News Service
by CNB