FOR IMMEDIATE RELEASE
Nov 1 2011
Contact: Laura Egerdal, (573) 526-0949; (573) 526-4734
Carnahan Orders Shutdown of California Popcorn Vending Machine Investment that Targeted Elderly Missourians
Kirk Porter of Whittier, Calif., allegedly advised the Missouri residents that he was seeking resources to grow Pop N Go, Inc. (POPN), a business that purportedly sold popcorn vending machines, and that they could invest funds from their IRAs in low-risk investments that would pay 14 percent quarterly interest. Porter, Melvin Wyman, a Whittier resident who is also named in the order, and POPN have never been registered to offer or sell securities in the State of Missouri.
“My office will continue going after anyone who preys on elderly Missourians, whether the fraudsters are from Missouri or not,” Carnahan said. “Before investing any of their hard-earned savings, Missourians should call my office to find out if the investment and those offering the investment are registered.”
According to the Cease and Desist Order issued by officials in Carnahan’s Securities Division, Porter allegedly misled Missouri investors as to the true financial condition of POPN by providing investors with company literature and financial documents projecting sales of over $14 million and net earnings of over $5 million. However, the order alleges that SEC registration filings reported total POPN sales of $77,000, with a net loss of over $9 million. In addition, an independent auditor expressed serious doubt as to POPN’s ability to continue to operate.
The order also states that Porter allegedly required the investors to sign a subscription agreement declaring them “accredited investors” without discussing either the meaning of that designation or whether they actually qualified. Although the investors repeatedly requested a refund of their investment, it was never received. The order states that the investments would be made through Sterling Trust, a passive custodian for self-directed IRAs, qualified business retirement plans and non-qualified custodial accounts.
Wyman and Porter face up to $90,000 in penalties and costs and the possibility of being ordered to pay more than $87,000 in restitution to harmed investors. Respondents have 30 days to request a hearing and contest this matter.
State securities regulators and the U.S. Securities & Exchange Commission issued a joint investor alert last month warning of the misuse of self-directed IRAs in fraudulent investment schemes. Among other issues, securities regulators are concerned that fraudsters are using self-directed IRAs as a component of their schemes to give investors a false sense of security by adding credibility and formality.
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.MissouriInvestorProtection.gov or call the toll free Investor Protection Hotline at 1-800-721-7996.