First Capital Group Ponzi Alleged - Long Running Scheme
On March 7, 2006 the United States Attorney for the Northern District of Ohio announced that "an information was filed charging Richard A. Daniels with one count of securities fraud.
Daniels, age 57, resides at 17604 Eastbrook Trails, Chagrin Falls, Ohio.
According to the information, from in or about 1997, through in or about December 2005, Daniels, promoted and sold securities in the form of promissory notes, through his company, First Capital Group, Inc. ("FCG"), to investors, resulting in an overall investor and client loss of approximately $2,254,138. During this same time period, Daniels also worked as a securities representative at Lincoln Financial Advisors Corp. ("Lincoln").
The information alleges that the securities were not registered with the SEC or the State of Ohio-Division of Securities. While Daniels sold securities and investments in the form of promissory notes, the investments did not have the represented purpose of generating a fixed return from between 4 percent to 7 percent, but rather had the purpose of promoting an illegal "Ponzi" scheme and supporting Daniels' personal debts and expenses.
The information states that Daniels was the subject of previous enforcement action brought by the United States Securities and Exchange Commission ("SEC") for his role in defrauding investors in Ohio and three other states when he and others sold investment contracts in the form of furniture and office equipment lease agreements; Daniels also sustained felony convictions in 1983 for two counts of mail fraud due to conduct relating to the SEC action." (my emphasis)
This is not the typical ponzi scheme since the rate promised to individuals is not too good to be true, it ran for over eight years, and the person allegedly selling the notes was a registered securities representative. How would you like the job of compliance officer at Lincoln Financial Advisors? I understand that it is now available.
Technorati Tags: lincoln financial advisors, daniels, chagrin falls ohio, state of ohio, ohio division, securities fraud, promissory notes
