MEDIA RELEASE
October 14, 1998
"John R. Manion, 50, 1227 Majestic Oak Drive, Apopka, charged with violation of RICO; conspiracy to violate RICO; scheme to defraud; and securities fraud. "
STATEWIDE GRAND JURY INDICTS 13 IN SCHEME TARGETING ELDERLY
145 Floridians lost almost $11 million in retirement nest eggs
ORLANDO – A statewide grand jury has charged five insurance agents, one stockbroker and seven others with defrauding 145 Floridians out of $10.9 million in connection with a promised upscale "golf, recreation and entertainment" complex near here, state officials announced today.
State insurance fraud investigators arrested most of the suspects in a predawn sweep that stretched from Central Florida to communities on both the west and east coasts. Another 37 sales agents -- 29 of them licensed insurance agents -- remain under investigation, with more arrests expected, said State Insurance Commissioner Bill Nelson.
"Unscrupulous developers and agents targeted Florida retirees and robbed them of nest eggs ranging from $25,000 to almost $300,000," Nelson said in a joint announcement of the indictments with state Comptroller Bob Milligan and Statewide Prosecutor Melanie Ann Hines. "The victims were deceived into cashing in annuities and other investments on a promise of big profits that never materialized."
Milligan initiated the investigation two years ago, ordering the Altamonte Springs-based Legend Sports Inc. to stop selling unregistered securities in Florida. The Department of Banking and Finance then worked closely with state Division of Insurance Fraud investigators in developing the criminal case. Vowing to continue such cooperative regulatory efforts, Milligan today said, "This is yet another example of older Floridians being targeted and cheated out of their life savings. We will continue our interagency crackdown on schemes that cross jurisdictional lines."
The Statewide Grand Jury, under Hines’ guidance, returned indictments charging the 12 men and one woman with violating Florida’s Racketeering Influenced Corrupt Organization (RICO) law, scheming to defraud, and committing securities fraud. Most also face charges of conspiring to violate RICO, selling unregistered securities, selling securities by unlicensed dealers, and conducting unauthorized insurance business in Florida.
James T. Staples, 52, of Knoxville, Tennessee, and Joseph Anthony Monaco, 46, of Lake Mary, Florida, in 1995 concocted a Ponzi scheme, where original investors are paid from funds invested by newer investors instead of any profits, investigators said. Their object was to raise money for development of golf ranges in Florida and other states. Staples headed Legend Sports Inc. and Monaco, an insurance agent, acted as a consultant receiving a commission on every security sold.
Staples, Monaco and others enlisted additional insurance agents and a stockbroker to help tap the savings of people living in Central Florida, Tampa Bay and other coastal communities with high numbers of retired residents. Potential investors were shown an artist’s rendering of one of Legend’s initial projects: An "upscale" recreational complex in Altamonte Springs, featuring baseball batting cages, a lighted par 3 golf course, golf driving range, 18-hole golf putting course, clubhouse, and indoor instructional facility.
Insurance agents persuaded their customers to cash in annuities, IRA’s, and other investments in exchange for 9-month promissory notes paying 12 percent interest. The agents assured investors there was no risk, claiming the notes were insured by "financial guarantee bonds" issued by insurance companies, investigators said. But, they added, the insurance companies didn’t exist, and the bonds were worthless.
The bonds were printed by a Nassau, Bahamas firm headed by John Keith McGarrity and represented in the United States by a disbarred Charlotte, N.C., attorney named Francis Clarkson. Both McGarrity, whose current whereabouts are unknown, and Clarkson were among the 13 indicted by the statewide grand jury. The bogus bonds bore the names of Tangent Insurance Co., Westwood Insurance Co. LTD., and Indemnity Reinsurance Co., which listed offshore addresses and were never licensed to do business in Florida.
In all, according to the investigators, about $12 million was raised in Florida and another $4.5 million in 14 other states, from the Carolinas to California, the Midwest and New England. The original Florida investors received about $1 million. But half of the Florida money was spent on sales commissions, operating expenses and lavish life styles, investigators said. Some was put toward the promised Altamonte Springs facility, which was never fully developed and has since been sold. Investigators said the Legend master plan was to erase some $15 million in debt by converting the noteholders into Legend stockholders and manipulating stock prices. But that scheme collapsed when the U.S. Securities and Exchange Commission halted the sale of Legend’s common stock in 1997.
Attached are the names, ages and addresses of the 13 suspects, together with the charges against each of them. Insurance agents are identified with an asterisk, the stockbroker with two asterisks.
James T. Staples, 52, 7011 Brickton Way, Knoxville, Tenn., charged with violation of the RICO Act; conspiracy to violate RICO; scheme to defraud; securities fraud; sale of unregistered securities; sale of securities by unlicensed dealers; and unauthorized insurance.
Joseph A. Monaco, 46, 240 Eagle Knob Point, Lake Mary, charged with violation of RICO; conspiracy to violate RICO; scheme to defraud; securities fraud; sale of unregistered securities; sale of securities by unlicensed dealers; and unauthorized insurance. *
James E. Deas, 72, 443-101 Hampton Crest Circle, Heathrow, charged with violation of RICO; conspiracy to violate RICO; scheme to defraud; securities fraud; sale of unregistered securities; sale of securities by unlicensed dealers; and unauthorized insurance.
Francis Clarkson, 68, 1124 Bolling Road, Charlotte, N.C., charged with violation of RICO; conspiracy to violate RICO; scheme to defraud; securities fraud; sale of unregistered securities; sale of securities by unlicensed dealers; and unauthorized insurance.
John K. McGarrity, 52, Nassau, Bahamas (last known U.S. address was Pinehurst Road, Dunedin), charged with violation of RICO; conspiracy to violate RICO; scheme to defraud; securities fraud; sale of unregistered securities; sale of securities by unlicensed dealers; and unauthorized insurance.
John R. Manion, 50, 1227 Majestic Oak Drive, Apopka, charged with violation of RICO; conspiracy to violate RICO; scheme to defraud; and securities fraud.
William "Jeff" Mann, 38, 1929 Wingfield Drive, Longwood, charged with violation of RICO; conspiracy to violate RICO; scheme to defraud; and securities fraud.
Richard G. Mann, 36, 3334 S.E. 12th Street, Ocala, charged with violation of RICO; scheme to defraud; and securities fraud.
David E. Trotter, 50, 13509 Magnolia Park Court, Windermere, charged with violation of RICO; conspiracy to violate RICO; scheme to defraud; securities fraud; sale of unregistered securities; sale of securities by unlicensed dealers; and unauthorized insurance. *
Steven R. Schaefer, 38, 1419 Oak Forest Drive, Ormond Beach, charged with violation of RICO; scheme to defraud; securities fraud; sale of unregistered securities; sale of securities by unlicensed dealers; and unauthorized insurance. *
Jeno K. Koch, 45, 11419 Pine Lilley Place, Bradenton, charged with violation of RICO; scheme to defraud; securities fraud; sale of unregistered securities; sale of securities by unlicensed dealers; and unauthorized insurance. **
Julie A. Gilvary, 31, 219 S.E. 43rd Lane, Cape Coral, charged with violation of RICO; scheme to defraud; securities fraud; sale of unregistered securities; sale of securities by unlicensed dealers; and unauthorized insurance. *
Michael E. Lewis, 38, 632 Stonefield Loop, Heathrow, charged with violation of RICO; conspiracy to violate RICO; scheme to defraud; securities fraud; sale of unregistered securities; sale of securities by unlicensed dealers; and unauthorized insurance. |
