N.J. Bureau of Securities Obtains Restitution for Defrauded Investors
Defunct Securities Dealer Operated from Monmouth County and Texas
NEWARK — Investors who were defrauded by a now-defunct unregistered securities dealer located in Allentown, N.J. were sent restitution checks last week after the N.J. Bureau of Securities obtained a court judgment against the defendants for securities fraud.
The judgment, issued on March 31, 2006 in State Superior Court, ordered that restitution to be paid to investors and civil monetary penalties to be paid to the Bureau
Sterling Enhancement Group, Inc.("Sterling") was ordered to pay $2,650,495.53 in restitution to victims of the fraud and $1,694,000 in civil monetary penalties to the Bureau. Defendant Charles Meyer, former Chief Executive Officer of Sterling, was ordered to pay $2,650,495.53 in restitution to victims of the fraud and $375,000 in civil monetary penalties to the Bureau.
During the course of the litigation, the court appointed a receiver to take over the firm's assets and pursue assets that had been improperly paid out or spent by the defendants. The receiver was recently able to make two distributions of money to victims of the fraud. A total of $414,804 went to 41 investors who were defrauded of their investments.
The Bureau this week mailed restitution checks to 10 investors, all of whom are located in the United Kingdom. Restitution for 31 U.S. investors was paid in late 2006. Other distributions may occur to more investors once pending issues are resolved.
Sterling, an unregistered securities dealer, misled investors into believing their money would be entered into a "reserved funds" contract with the World Bank. Investors were promised return rates between 75 and 150 percent within 13 months. Registration of the securities dealer and its agents, as well as any non-exempt securities sold by the firm, is required by the securities law.
"Enforcement of the securities laws and prosecution of securities fraud is a priority for this department," Attorney General Stuart Rabner said. "The Office of the Attorney General, through the Bureau of Securities, will continue to vigorously prosecute violators of our securities laws."
The state initially filed suit against Sterling and Meyer in 2000 and obtained a preliminary injunction freezing the company's assets, barring it from selling unregistered securities and preventing the destruction or concealment of any company records. A receiver also was requested and eventually appointed.
"Investigators from our Bureau of Securities diligently unraveled this scheme. As we found out, investors across the United State and on the other side of the Atlantic Ocean fell victim to the con perpetrated by Sterling and Meyer," said Stephen B. Nolan, Acting Director of the Division of Consumer Affairs.
In addition to its office in Allentown, Sterling also maintained an office in Dallas, Texas.
"When a fraud occurs, one of our goals is to obtain as much restitution as possible from the responsible parties," said Franklin Widmann, Chief of the Bureau of Securities. "Investors who believe they have been defrauded should contact us and file a complaint, so we can take action to stop the fraud and help others avoid the same scam. The earlier the Bureau is notified, the more likely some of the money can be recouped for investor victims."
The Bureau of Securities can be contacted toll-free within New Jersey at 1-877-I-INVEST (1-877-446-8378) or from outside New Jersey at 973-504-3600. The Bureau of Securities' web site is located at http://www.njsecurities.gov
Investigator Sylvia Kolankiewicz investigated the matter for the Bureau of Securities. Deputy Attorney General Victoria Manning of the Division of Law litigated the matter for the Bureau.