TRENTON
– Attorney General Peter C. Harvey
has obtained a court order to seize a
bank account containing about $2.5 million
and shut down phone lines of a fictitious
company, Heritage Financial Inc., which
was used as a front by con artists who
defrauded stockholders by making false
offers to purchase stock shares at inflated
prices. Victims were asked to pay thousands
of dollars in up-front transaction fees,
but the stock purchases were never completed.
Superior
Court Judge Kenneth S. Levy of the Chancery
Division, Essex County, signed the order
late yesterday granting the relief requested
by the Attorney General and the New
Jersey Bureau of Securities within
the Attorney General’s Office. The
fraudulent scheme was conducted entirely
through the Internet, with no legitimate
physical address given for Heritage Financial
Inc. or its officers and employees. The
company’s Website at www.heritagefinancialinc.com
claimed the company was based at 103 Franklin
Corner Road, Trenton, N.J. That address
does not exist.
“We
acted quickly to both shut down this fraudulent
securities scheme and seek to recover
funds lost by innocent investors,”
said Attorney General Harvey. “These
con artists used the Internet to convince
people that their fictitious company had
the approval of various regulatory agencies,
which also were illusory. Fortunately,
some of those who were targeted contacted
legitimate authorities when they recognized
the No. 1 red flag for securities fraud
– the offer was simply too good
to be true.”
“The
investing public should beware of fake
Web sites that con artists may use to
prop up their scams. As in this case,
the sites may look legitimate and purport
to be official Web pages of regulatory
agencies,” said Franklin L. Widmann,
Chief of the New Jersey Bureau of Securities.
“We urge people to call the Bureau
of Securities if they have any doubt about
the legitimacy of such a site.”
Several
names were listed on the Heritage Financial
Inc. Website as officers of the company
or were used by persons who contacted
victims, including Tim Bailey, David Cairns,
Gordon Currie, Richard Osbourne and Anthony
Santoro. However, the names may well be
fictitious.
Individuals
holding low-performing stocks were targeted
with cold calls and offered prices for
their shares far exceeding market value.
They were told that to complete the sale,
they must pay an up-front fee, which the
con artist usually called a “fully
refundable penalty restriction bond,”
represented as being for the purpose of
protecting investors from fraud.
The
victims were asked to wire the money to
accounts at Bank of America in Tampa,
Fla., or International Registry Group
Corporation, an escrow agent. Money was
transferred from Bank of America to a
Panamanian bank, Banco Uno S.A. Panama,
which has an office in Miami. It appears
that money was transferred to an offshore
account, using the Banco Uno account as
a clearinghouse. It is believed that there
were hundreds of victims, including many
living outside of the United States. The
seized account at Bank of America contains
about $2.5 million.
When
people questioned the legitimacy of Heritage
Financial Inc. or the purchase offer,
they were directed to telephone one of
several regulatory agencies that the con
artists fabricated and falsely portrayed
as legitimate on Internet sites, including
the International Exchange Regulatory
Commission, the International Securities
Department, the Regulatory Compliance
Commission, the Securities Protection
Agency and the International Registry
Corp.
In
fact, all of the phone numbers provided
by the defendants were linked to the same
computer or network of computers through
an Internet service that allows personal
computers to serve as telephones. The
defendants had an account with an Edison-based
telecommunications company that allowed
them to establish dozens of computer-linked
telephone numbers, including numbers with
out-of-state area codes.
The
Bureau of Securities is continuing its
investigation to track down the perpetrators
who opened the bank and telecommunications
accounts.
Deputy
Attorney General Megan Harris is handling
the case for the Attorney General. It
is being investigated for the Bureau of
Securities by Investigators William Hoefling,
Adam Heck and Patrick Uket.
Investors
can telephone the Bureau of Securities
at 973-504-3600, or call
toll-free from within New Jersey at 1-866-838-6240.
They also can reach the Bureau through
its Web site www.njconsumeraffairs.com/bos.htm.
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