The secretary of state’s office alleges SteadiVest, LLC, operated an illegal Ponzi scheme. Fines could be up to $25,000 for each offense.
The Clarion-Ledger reports SteadiVest also has been sued by investors.
According to the Secretary of State’s Office, SteadiVest was supposed to purchase houses and then rent them out.
However, the secretary of state says SteadiVest and CEO Marshall Wolfe and president Jack Harrington “misled and deceived its investors in order to pay off mounting debt and keep its numerous subsidiaries afloat.”
The investors’ lawsuit claims about $6 million in losses.
The Secretary of State’s Office issued a temporary cease and desist order in November and released an additional report Jan. 26.
SteadiVest filed for bankruptcy last March. Investors filed suit in August.
Besides fraud, the investors’ lawsuit alleges Wolfe and others sold promissory notes and used the funds generated to raise money for new investors and “pay themselves exorbitant salaries and benefits.” The lawsuit said SteadiVest’s parent company, MTW Investment Financing LLC, has lost millions.
The secretary of state’s report says money collected through the sale of memberships for the company allegedly was never set aside, a violation of the agreement between SteadiVest and its investors.
The report says money was transferred to the parent company, MTW, and used to pay off MTW investors. One of those investors was Harrington, who received more than $300,000 after SteadiVest’s account was emptied.
The Secretary of State’s Office said the payment was made because of a disagreement between Harrington and Wolfe “with the intent of buying out a dissatisfied insider.”
In 2005, Wolfe and MTW was reprimanded for the sale of unregistered promissory notes. He and MTW each paid $10,000 to the state, according to documents from the secretary of state’s office.
BEFORE YOU GO…
… we’d like to ask for your support. More people are reading the Mississippi Business Journal than ever before, but advertising revenues for all conventional media are falling fast. Unlike many, we do not use a pay wall, because we want to continue providing Mississippi’s most comprehensive business news each and every day. But that takes time, money and hard work. We do it because it is important to us … and equally important to you, if you value the flow of trustworthy news and information which have always kept America strong and free for more than 200 years.
If those who read our content will help fund it, we can continue to bring you the very best in news and information. Please consider joining us as a valued member, or if you prefer, make a one-time contribution.Click for more info