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Securities News Releases
Thursday, June 12, 2014
Contact: Kevin Flannery, (573) 526-0949
Kander Cracks Down on Fraud in the Ozarks
Jefferson City, Mo. — Secretary of State Jason Kander today cracked down on a Hartshorn man and his investment company, ordering him to stop committing fraud against Missourians.
According to an investigation by Kander’s office, Herman Beck and Ozark Investor’s Group, LLC supplied investors with false or incomplete information, taking in more than $130,000 from unknowing victims. After skirting state registration requirements, Beck allegedly took a portion of the investors’ money for himself.
"I encourage Missourians to call my office’s Investor Protection Hotline to ensure that both the person and product they are considering are registered," Kander said. "Nobody who handles people’s hard-earned money should act outside of the law. Not being registered is a major red flag."
Over the course of several years, Beck allegedly solicited prospective investors door-to-door and over the Internet with opportunities to purchase stock in Ozark Investor’s Group, which funneled the money to another business that Beck controlled: Back 40 Group. Beck also directly solicited funds for the Back 40 Group, an Internet-based retailer for books and media.
But none of the investors identified by Kander’s office have received full repayment of the principal of their investment, let alone a profitable return. Instead, the state’s investigation revealed that Beck commingled the investment money with personal and other business funds.
From the combined funds, Beck allegedly made numerous payments to himself as well as a nearby nature preserve that he owned and operated. The state’s investigation also turned up evidence that Beck spent investors’ money at several restaurants and retail establishments.
In defrauding his victims, Beck made claims that far outpaced the true financial position of the Back 40 Group, Kander’s office asserts. According to state investigators, one Summersville resident was told an investment in the Back 40 Group would triple. Allegedly, Beck brought in $40,000 from another victim after saying large investment banks were investing in the company.
"It is management’s opinion that our return to members will be well above average and that the risk is low," Beck wrote on the Back 40 Group’s website.
For the 58 investors who together had at least $130,000 in the operation, Kander’s action creates the possibility that they will be able to reclaim their money in the future. Beck also faces the prospect of multiple civil penalties.
Before making an investment decision, Missourians should call Kander’s toll-free Investor Protection Hotline at 1-800-721-7996.
Visit www.sos.mo.gov to learn more about the Office of the Missouri Secretary of State.