Mar 2 2010
Contact: Laura Egerdal; Abe Rakov, (573) 526-0949; (573) 526-4734

Carnahan Shuts Down $2 Million Russian Vodka Stand Investment Scheme

“Off books” sales are increasingly common in Missouri. Just last week, Secretary Carnahan met with seniors across the state to discuss this threat. "If your broker tells you they have a special deal just for you, be especially cautious," Carnahan said. "Investments sold off the books of your broker’s firm are risky and may be against the law. One call to the Investor Protection Hotline to check out an investment could help protect your savings.”

Paul E. Burkemper was registered with VSR Financial Services, Inc., a broker-dealer based in Overland Park, KS. In 2006, Burkemper and Ilya Vishnevetsky organized St. Louis-based I.P. Holding, L.L.C., which issued the unregistered vodka stand investment. By March 2008, Burkemper allegedly raised nearly $2 million from 11 individuals, including some of his clients at VSR. VSR discharged Burkemper in August 2009.

According to the order, Burkemper told the clients that the vodka stands would be located in St. Petersburg, Russia, and resemble an upscale coffee shop. He promised some investors high returns and a free trip to St. Petersburg. “I would hate for you to miss the boat on this one,” Burkemper told one investor, “I wouldn’t advise you to put money into it unless I felt very confident.”

As of October 2009, none of the investors had received any return on their investments. According to the order, some of the money was deposited into Burkemper’s personal account, and some of the funds were used to purchase cars for Select Auto, another business run by Burkemper and Vishnevetsky which purchased automobiles in the United States for resale in Russia.

The order also states that VSR failed to reasonably supervise Burkemper’s outside business activity. The respondents in this matter have thirty days to request a hearing. A separate proceeding has been initiated to take action on Burkemper’s securities agent registration.

For more information regarding investments and fraud protection, or for information regarding a company or representative, visit the Secretary of State’s online Investor Protection Center at or call the toll free Investor Protection Hotline at 1-800-721-7996.

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