This is your Oct. 24, 2013 issue of the State Securities Board Bulletin, a biweekly roundup of regulatory news and investor education information.
A fraud centered on a phantom biodiesel plant in Hunt
County has resulted in three more defendants being sentenced. Casey Ray
Vanloon, Ricky Ray Knowles, and John David Riddle were sentenced to 10 years
deferred adjudication on Oct. 7 in the 380th State District Court in
Collin County. The three men were ordered to pay a total of $580,292
restitution to the victims, most of whom were senior citizens when the scam
started in 2008.
Vanloon, Knowles, and Riddle pleaded guilty to engaging
in organized criminal activity. They sold interests in a purported joint
venture, to be managed by Greenway Energy Partners LLC, which would build a
plant to produce biodiesel fuel for sale. Investors were promised annualized
returns of 33% for five years, but no plant was ever built. All told, the joint
venture raised more than $800,000 from investors.
The three men cooperated with the investigation into
Kenneth Paul Lawrence of Allen, who was sentenced in July to five years in
state prison on a charge of money laundering and to 10 years of probation on a
charge of engaging in organized criminal activity. As a condition of his probation, Lawrence, the proposed
operator of the biodiesel plant, was ordered to repay investors the $265,000 he
received from Greenway Energy Partners’ sale of fraudulent investments.
Another defendant, Ronnie Gene Nichols Jr. was sentenced
in 2011 to eight years in state prison on a charge of felony theft.
All the defendants were prosecuted in cooperation with
the Collin County District Attorney’s Office. State Securities Board
enforcement attorneys Dale Barron, Alexis Goldate, and Tina Lawrence served as
special prosecutors in the cases.
William Charlton Mays IV, a former
investment adviser representative in Corpus Christi, allegedly made that
ironclad guarantee to six clients who invested $225,000 in a gold, silver, and
commodities trading operation. Mays, who allegedly sold the investments in 2011
and 2012 in the form of promissory notes and investment contracts, was indicted Sept. 26 in the 105th State District Court of Nueces County on
charges of securities fraud, money laundering, theft, and securing the
execution of a document by deception.
Mays was registered as an investment
adviser representative from 1995 until Nov. 1, 2011. The indictment alleges he used
investors’ money to pay his personal expenses, failed to disclose his personal financial problems, and misrepresented the shaky
financial condition of his company, Mays Financial Group LLC. Investors weren’t
told, for instance, that all the assets of Mays’ company were pledged to Accion
Texas, a small business loan provider. Mays also did not disclose a federal tax
lien filed against him in Nueces County in 2007 and a 2011 judgment against him
in Travis County Court at Law #2 in the amount of $20,289.
The Financial Industry Regulatory Authority
on Oct. 4 filed a complaint against Mays, alleging that he converted and
misused client funds, including giving a client’s money to his father and his
ex-wife. FINRA also alleges Mays operated an outside business -- Mays Financial
Group -- without informing his employers.
The State Securities Board registers securities offered
or sold in Texas; oversees the firms and individuals selling securities or
providing investment advice; enforces the Securities Act through criminal,
civil and administrative penalties; and provides investor education presentations and
material. For more information, contact Robert Elder at relder@ssb.state.tx.us or 512-305-8386.
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