Nine Florida Insurance Agents Face Charges In $3 Million Securities Fraud Scheme.TAMPA, Fla.--(BUSINESS WIRE)--Sept. 24, 1998--A joint investigation by state and federal agencies has resulted in criminal charges against three Tampa Bay Tampa Bay, inlet of the Gulf of Mexico, 25 mi (40 km) long and 7 to 12 mi (11.3–19 km) wide, W Fla., separated from the Gulf by numerous small islands; it receives the Hillsborough River. St. area insurance agents for alleged securities fraud in a Ponzi scheme A fraudulent investment plan in which the investments of later investors are used to pay earlier investors, giving the appearance that the investments of the initial participants dramatically increase in value in a short amount of time. that claimed more than $3 million from Florida investors. Six other Florida agents face civil administrative charges. Comptroller Bob Milligan, Insurance Commissioner Bill Nelson, and Hillsborough County Hillsborough County is the name of two counties in the United States:
A blood test sometimes used to confirm ELISA results instead of using the Western blotting. In an IFA test, HIV antigen is mixed with a fluorescent compound and then with a sample of the patient's blood. ) of Tampa, Taft Womack, Jr. and Robert S. McMillian, both of St. Petersburg. As a result of investigations by the Florida Department of Banking and Finance (which the Comptroller directs), Florida Department of Insurance, US Securities and Exchange Commission, and the Hillsborough County State Attorney, it is alleged that IFA, Moses, McMillian, and Womack used licensed Florida insurance agents to sell unregistered securities in the form of "private trust agreements" and "private placement agreements" to 70 Florida investors, totaling $3,076,917. Individual investments ranged from $2,200 to $125,000, with promised interest rates ranging from 10 to 40 percent. Investors were told the agreements were exempt securities Exempt securities Instruments exempt from the registration requirements of the Securities Act of 1933 or the margin requirements of the SEC Act of 1934. Such securities include government bonds, agencies, munis, commercial paper, and private placements. , secure and risk free. The funds were to be maintained in the Bank of America
Bank of America (NYSE: BAC TYO: 8648 ) is the largest commercial bank in the United States in terms of deposits, and the largest company of its kind in the world. , and offered to major brokerage companies as collateral for guaranteed insurance contracts Guaranteed insurance contract A contract promising a stated nominal interest rate over some specific time period, usually several years. , which in turn were supposed to guarantee the investments. However, it is alleged that investor funds were not invested in guaranteed insurance contracts, but were used to make interest and principal payments to earlier investors, pay commissions to the agents, and pay personal expenses of officers and directors of a Nevada-based company that instituted the scheme. The Department of Banking and Finance also filed civil administrative complaints against Womack, McMillian, William G. McNamara of Tampa, Gerald Lee Wilkins of Port Charlotte, Leon M. Streetman of Plant City, and William Rae of Largo, alleging violations of the Florida Securities and Investor Protection Act. The Department of Insurance filed administrative charges, alleging several violations of the State Insurance Code, against Moses, Womack, McMillian, McNamara, Wilkins, Streetman, Rae, and Arnold E. Schmiel and William R. Gignilliat, both of Tampa. The US Securities and Exchange Commission filed a civil lawsuit in the US District Court for the Middle District of Florida seeking a permanent injunction permanent injunction n. a final order of a court that a person or entity refrain from certain activities permanently or take certain actions (usually to correct a nuisance) until completed. and civil money penalties in connection with the alleged sale of unregistered securities. Moses and IFA entered into joint agreements with the Department of Banking and Finance, consenting to the issuance of permanent cease and desist orders An order issued by an Administrative Agency or a court proscribing a person or a business entity from continuing a particular course of conduct. The force and effect of a cease and desist order are similar to those of an Injunction issued by a court. . Schmiel, Gignilliat, and Gladys Godbey of St. Cloud have also entered into joint agreements with the Department of Banking and Finance, consenting to the issuance of permanent cease and desist orders, and have paid fines for their involvement in the scheme. |
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