Ex-GV manager defrauds seniors

Green Valley News

The former Green Valley branch manager of the investment firm Emmet A. Larkin Co. has admitted defrauding at least 80 senior citizens out of millions of dollars in a Ponzi scheme and has agreed to pay $1.5 million in restitution, a state agency said.

The Arizona Corporation Commission has issued multiple orders involving unregistered securities sales, requiring the return of over $19.2 million to investors and the payment of $350,000 in administrative penalties.

In one case, the commission revoked the securities registration of Michael Dawes of Tucson, a former branch manager for the Sierra Vista and Green Valley offices of investment firm, Emmet A. Larkin Co. Inc. Dawes has agreed to pay at least $1.5 million in restitution and $100,000 in administrative penalties for operating a Ponzi scheme that defrauded at least 80 investors, most of whom were seniors, an ACC news release said.

Dawes raised at least $4 million by selling promissory notes that he claimed would bring 10 percent to 30 percent returns from off-shore investments that the commission found were fictitious. Instead, Dawes used investor funds to pay for his own stock market losses, repay other investors, and personal expenses.

Approximately $2.5 million has been returned to investors. In November 2007, Dawes pleaded guilty to felony mail and money-laundering charges in federal court and agreed to pay approximately $1.5 million in restitution to investors. He will be sentenced in May 2008.

Other cases involved: David Gotlieb and his company, G’ieber Financial LLC, who agreed to pay $1,559,650 in restitution and $50,000 in administrative penalties for violating the Arizona Investment Management Act; and Ryan J. Herndon and Scott Renny Bogue Sr., who agreed to pay administrative penalties and restitution for selling unregistered stock and certificates of participation in a trio of companies—Trend Management Group Inc., Trend Capital LLC, and The Trend Group Inc.

The commission dismissed its case against Cameron Guy Campbell, a former California attorney who was involved with The Brixon Group Ltd., a Mesa-based company that fraudulently sold high-yield insurance portfolio investments. The dismissal follows Campbell’s guilty plea in federal court to wire fraud charges and his sentencing to 63 months in prison.

The full commission orders can be viewed at: http://www.azcc.gov/divisions/securities/enforcement/enforce-orders.asp

Investors were warned to be especially cautious now because scam artists will use the recent downturn in the stock market to exploit investors’ anxiety about increasing their earnings.

Even when investing with someone they know, investors are urged to verify the registration of sellers and investment opportunities and investigate disciplinary histories by contacting the Arizona Corporation Commission’s Securities Division at 602-542-4242 or toll free in Arizona at 1-866-VERIFY-9.

The division’s investor education Web site also has helpful information at www.azinvestor.gov.

pfranchine@sahuaritasun.com | 547-9738