More on Promissory Notes...
nasaa.org
KENTUCKY:
Defendant: Lew Perrin McGee
Location: Lexington, KY
Summary of Case:
The Kentucky Division of Securities encounters securities violations involving "exotic securities" on a frequent basis. One disturbing trend the Division has recently observed involved offerings to unsophisticated investors of worthless investments in promissory notes. On June 13, 1997, the Division entered into an Agreed Order with one of these perpetrators, Lew Perrin McGee, a former insurance and securities agent. Under the terms of the order, Mr. McGee agreed that he has violated the Kentucky Securities Act and that he would offer recession to the 59 investors he had taken money from. The aggregate loss to these investors, many of whom are elderly and on fixed incomes, is over $3.4 million. Because Mr. McGee has declared bankruptcy, the Division is continuing with its own separate action against him in bankruptcy to recover the monies he owes to these duped investors.
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OHIO:
Defendant: Theodore E. Mong II, former President of Liberty Bell Association, IN.
Location: Newark, OH
Summary of Case:
Mong was indicted on 81 counts, including 32 counts of selling securities without a license, 31 counts of selling unregistered securities, 8 counts of false representations in selling securities, 8 counts of securities fraud, one count of receiving stolen property and one count of corrupt activities under the Ohio Corrupt Activities Act (a first degree felony).
The Division's investigation found that Mong, through Liberty Bell Association, Inc., sold promissory notes to approximately 40 OH investors who were defrauded out of approximately $1.5 million. Many investors were elderly and were convinced to transfer and invest their IRA funds. Mong had previously been licensed to sell securities with an OH brokerage firm, before he opened his own store-front unlicensed firm.
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