FOR IMMEDIATE RELEASE
Jun 1 2011
Contact: Laura Egerdal, (573) 526-0949
Carnahan Exposes $2 Million Energy Scheme in Mid-Missouri
According to the order issued by officials in Carnahan’s Securities Division, Grammer and Baxter told investors that Boydoplex could produce a generator the size of a shoe box that could power a city and a pacemaker that could run without batteries. Since at least 2004, Baxter and Grammer allegedly have raised more than $2 million from at least 30 investors in Missouri, North Carolina, Florida, and Australia, though neither Grammer nor Baxter is registered to sell securities and the investments were not registered in Missouri.
Records obtained by the Securities Division indicate that investor money was used to pay for personal expenses including vehicles, farm equipment, retail stores, mortgage payments, music expenses, and adult entertainment website charges.
“As I always say, if an investment sounds too good to be true, it probably is,” Carnahan said. “If either the investment itself or the returns promised seem out of the ordinary, please to call the Investor Protection Hotline to make sure everything is properly registered with my office.”
The order alleges that Baxter told investors that she did not believe the project would lose money and the worst thing that could happen was investors would get their money back, plus 10 percent, in six months. She also said they could possibly receive 10 times their initial investment. But when Securities Division investigators began scrutinizing Boydoplex, Grammer and Baxter would not disclose the identity or street address of the development labs, indicating that any inquiry might lead to the identity of a potential buyer that was in negotiations to acquire the Boydoplex project for $800 million. Grammer filed for bankruptcy in late 2010.
The cease and desist order alleges that Grammer and Baxter sold unregistered securities and committed securities fraud by failing to disclose material information to investors, providing untrue information to investors, and misleading investors as to how their funds would be spent. Grammer and Baxter face the imposition of up to $80,000 in penalties and costs, and the possibility of being ordered to pay more than $2 million in restitution to harmed investors. Respondents have 30 days to request a hearing and contest this matter. The Securities Division is collaborating closely in this matter with other law enforcement agencies.
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 www.MissouriSafeSavings.com or call the toll free Investor Protection Hotline at 1-800-721-7996.
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To find out more about Missouri’s Secretary of State’s office, visit www.sos.mo.gov