Businessman Charged With Securities Fraud
A New Hampshire businessman is in legal trouble after being outed for leading a securities fraud scam, in which he lied to investors to collect funding he used for his own personal expenses.
According to the New Hampshire Bureau of Securities Regulation (BSR), James A. Philbrook solicited a Maine couple in June 2005 to invest in a proposed pay-per-view program starring Carmen Electra and was able to get them to send him $71,505. However, the couple’s investment, which was wired to Philbrook’s own account, was instead used to pay off restitution to a former employer of Philbrook’s son, who had previously been found guilty of theft by deception against his employer.
One month later, Philbrook once again was able to get the same couple to invest an additional $73,494 by adding so-called “Triple Bonus” offer as incentive. Three other victims were also persuaded by Philbrook to invest $20,000, $22,000, and $50,000, respectively. In each of these instances, he claimed that the money would be used for investments, but instead used it to pay off personal bills.
When attempting to explain his actions, Philbrook attempted to characterize the investments he received as personal loans that he could use however he wanted.
“Although Philbrook contends that these transactions were merely loans, that was not the understanding of those who turned over tens of thousands of dollars at a time to Philbrook with the hope of significant investment returns,” said Barry Glennon, the director of the BSR.
The bureau also found that Philbrook had some of his investors sign confidentiality agreements.
As punishment for violating investment and securities fraud laws, the bureau ordered Philbrook to return $237,000 he obtained from the investors. He was also fined $12,500, must pay the bureau $10,000 in expenses, and must cease and desist from any further violations of the securities laws.
If you or a loved one has been taken advantage of by a securities fraud scheme, call Sokolove Law today for a free legal consultation regarding a securities fraud lawsuit.
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