Post by Sapphire Capital on Jul 18, 2008 5:58:02 GMT 4
COLUMBIA, S.C. - July 16, 2008
The head of a small South Carolina investment firm pleaded guilty on Wednesday to bilking dozens of people of about $6 million in two alleged fraud schemes, federal prosecutors said.
Daryl Batts, owner and operator of Comprehensive Financial Solutions Inc. in Easley, pleaded guilty to one count each of securities fraud and mail fraud, U.S. Attorney Walt Wilkins said.
Authorities think about 150 people invested about $6 million with Batts, who told them he would use it to purchase securities. Instead, the 46-year-old Batts deposited the money into his own accounts, fabricating monthly statements showing substantial gains for those clients, Wilkins said.
Prosecutors say Batts also used some of the funds from those investors to fund an insurance fraud scheme, paying out insurance premiums for policies he had never actually filed, Wilkins said.
A spokesman for MassMutual Financial Group, whose insurance products Batts had sold since 2004, said the company terminated its relationship with his firm on June 27 and began its own investigation.
"Due to the ongoing investigation, we cannot discuss the matter in any greater detail," said Jim Lacey, spokesman for the Springfield, Mass.-based company. "All of our information to date indicates that the inappropriate actions arise solely from the unauthorized business dealings of Comprehensive Financial Solutions."
Batts' attorney, Frank Eppes of Greenville, did not immediately return a message seeking comment.
Batts faces up to 50 years in prison and a $500,000 fine. The investigation is still open, but Wilkins said Batts was the main target.
Batts' company was known both as College Funding Solutions Inc. and Comprehensive Financial Solutions Inc., according to records of the Secretary of State's Office. On Wednesday, it was listed as a corporation in "good standing" that originally filed with the office in October 2002.
Authorities have seized about $2 million from Batts' accounts, and a receiver has been appointed to identify more potential victims and help recover additional funds, Wilkins said.
"When we learned of his potential fraud, the investigation moved extremely quickly, in an effort to minimize damage to the investors," Wilkins said. "This potentially could have been a huge loss amount."
The head of a small South Carolina investment firm pleaded guilty on Wednesday to bilking dozens of people of about $6 million in two alleged fraud schemes, federal prosecutors said.
Daryl Batts, owner and operator of Comprehensive Financial Solutions Inc. in Easley, pleaded guilty to one count each of securities fraud and mail fraud, U.S. Attorney Walt Wilkins said.
Authorities think about 150 people invested about $6 million with Batts, who told them he would use it to purchase securities. Instead, the 46-year-old Batts deposited the money into his own accounts, fabricating monthly statements showing substantial gains for those clients, Wilkins said.
Prosecutors say Batts also used some of the funds from those investors to fund an insurance fraud scheme, paying out insurance premiums for policies he had never actually filed, Wilkins said.
A spokesman for MassMutual Financial Group, whose insurance products Batts had sold since 2004, said the company terminated its relationship with his firm on June 27 and began its own investigation.
"Due to the ongoing investigation, we cannot discuss the matter in any greater detail," said Jim Lacey, spokesman for the Springfield, Mass.-based company. "All of our information to date indicates that the inappropriate actions arise solely from the unauthorized business dealings of Comprehensive Financial Solutions."
Batts' attorney, Frank Eppes of Greenville, did not immediately return a message seeking comment.
Batts faces up to 50 years in prison and a $500,000 fine. The investigation is still open, but Wilkins said Batts was the main target.
Batts' company was known both as College Funding Solutions Inc. and Comprehensive Financial Solutions Inc., according to records of the Secretary of State's Office. On Wednesday, it was listed as a corporation in "good standing" that originally filed with the office in October 2002.
Authorities have seized about $2 million from Batts' accounts, and a receiver has been appointed to identify more potential victims and help recover additional funds, Wilkins said.
"When we learned of his potential fraud, the investigation moved extremely quickly, in an effort to minimize damage to the investors," Wilkins said. "This potentially could have been a huge loss amount."