Brokers accused of bilking hundreds
Seven are under arrest in a scam in which 20 Pinellas and Pasco investors lost some $800,000.
By CHRIS TISCH, Times Staff Writer
Published January 7, 2004
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State agents have arrested seven Pinellas County residents and were looking for an eighth this week in connection with a scam that cheated more than 100 investors out of $5-million.
Most of the victims are elderly and live in Florida, many in the Tampa Bay area. Some lost more than $100,000.
"Most of these folks rolled everything they owned - IRAs and everything - into this investment," said Rick Morera, spokesman for the Florida Department of Law Enforcement. "So many of these folks lost everything they had."
In Pinellas and Pasco, about 20 victims lost more than $800,000, agents say.
The people arrested were charged with racketeering or selling unregistered securities. Arrested were Robert Darren Carlson, 38, of Clearwater; Loie E. Johnson, 36, of Madeira Beach; Jay W. Bock, 46, of Dunedin; Joseph A. Hobson Jr., 37, of Clearwater; Sean D. Hoyt, 36, of St. Petersburg; Damon E. Carlson, 35, of Seminole; and Michael F. Mann, 36, of Seminole.
An eighth suspect, Robert C. Taylor, 46, of Madeira Beach, remained at large Tuesday evening.
Agents said the people worked for Palm Beach Investment Group, a company formed in August 1998 in Wellington, Fla., by Michael D. Shuda and Andrew W. Hind. Not long after, the group opened an office in Pinellas County and started selling bogus investments to elderly people, FDLE agents said.
The group advertised in local newspapers, then offered minimum investments of $5,000. They promised yields of 9 percent to 29 percent. The group sold $5-million in stock in just six months.
FDLE agents said the salespeople told clients their investments were insured by the Federal Deposit Insurance Corp. when they were not. They also said their company had $19-million in capital, which was a lie, agents said.
The salespeople also told investors that their money would be used to purchase certificates of deposit and U.S. treasury bills. The group did not own any CDs, state officials said.
State officials said not only were the salespeople not registered to sell securities, but some had previously been in trouble with state regulators for doing the same type of thing.
State insurance and banking investigators began looking into the Palm Beach Investment Group, then ordered the company and its brokers to stop doing business in May 1999.
They found victims in Pinellas, Hillsborough, Pasco, Hernando, Citrus, Manatee and other Florida counties. More than 40 victims also are from out of state.
Palm Beach Investment Group paid its salespeople handsomely, but none of the money was invested as the salespeople promised.
About $600,000 went to Evergreen National Resources, Fairway Marketing Group and World Com - businesses owned by Taylor and Robert Darren Carlson.
Morera said the employees in the Pinellas office used the money for personal gain, but he declined to be more specific Tuesday because the investigation was still in progress.
But records show that after the people in the Pinellas office were paid their commissions, the investors' money was used to repay debt to investors in a sinking Bahamas company owned by Shuda and Hind.
FDLE agents arrested Shuda on securities fraud charges in October. He was booked into the Palm Beach County Jail on $500,000 bail. Hind remains a fugitive.
Most of the people from the Pinellas office were booked into the Pinellas County Jail, though Hoyt was booked into the Manatee County Jail and Johnson was arrested in San Diego. They both face extradition to Pinellas.
Bail for the defendants ranged from $100,000 and $500,000.
Hazel M. LeSan had her first job at 13 as a soda jerk in Lakeland. In later years, she bused tables, cleaned condos and worked at a bread company to provide for her two children and her husband, a disabled veteran.
LeSan always put a little money away so she could retire happy, which she did. But she lost all her savings - more than $90,000, she says - in the investment scam.
Her money gone, she had to sell her house. Her health sagged. She battled depression.
"Devastating can't even describe it," said LeSan, 76. "I'll never get over it. It affects you mentally and physically."
LeSan said Robert Darren Carlson sold her the investments that cleared out her accounts.
She first met him, she said, when he was selling viaticals for American Benefit Services Inc., another company that got in trouble for an investment scam. Many of that company's principals were sentenced to federal prison terms.
LeSan said she first gave Carlson $30,000, then gave him more money when he worked for Palm Beach Investment Group. She hopes to recoup some of the $90,000 she lost if there are convictions and orders for restitution.
"I went through hell to save that kind of money and retire," she said.
Morera said people interested in investing need to check with the state Department of Business and Professional Regulation to ensure whoever they are dealing with is licensed to sell securities.
That would have been a red flag to stay away from Palm Beach Investment Group, he said.
"They need to do their due diligence and research before they invest anything," he said. "They were not licensed security dealers."
- Chris Tisch can be reached at 727 445-4156 or tisch@sptimes.com
[Last modified January 7, 2004, 01:33:45]
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