SteadiVest probed for possible Ponzi scheme
Published: February 23,2010
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.
To sign up for Mississippi Business Daily Updates, click here.
Top Posts & Pages
- ANITA MODAK-TRURAN — Mississippi’s motion picture renaissance
- Entergy gives solar a shot
- Challenging times ahead for Pearl’s manufactured home residents, apartment complex owners
- Critics say Pearl out to eliminate mobile homes and apartments – not safeguard them
- Nehi Bottling Company has been a Cleveland fixture for 85 years
- WRESTLING SUCCESS — Ted DiBiase Jr. leaves ring to become entrepreneur
- Irby commits suicide after wife's prison release
- State Sen. McDaniel traveling Mississippi to promote PAC
- Despite obstacles, craft beer industry growing