FOR IMMEDIATE RELEASE
February 18, 2016
Contact: Stephanie Fleming, (573) 526-0949
Kander Halts St. Louis-Area Investment Scheme
Jefferson City, Mo. — Secretary of State Jason Kander today shut down an investment scheme run by John G. Stanford, Jr., of Chesterfield, Mo., who is the owner of Statewide Financial Services. According to the cease and desist order, Stanford offered a 47-year-old Missouri resident an unregistered investment opportunity in a hedge fund and persuaded the resident to withdraw savings from annuities and Roth IRA accounts to fund it. He then used the investor funds for his personal expenses.
“My office has zero tolerance for fraud and will go after any individual or company that scams Missourians, Kander said. “Whether you’re approached with an investment opportunity by someone you trust or a stranger, it’s important to call my office before investing your hard-earned savings. The toll-free Investor Protection Hotline is a great resource for Missourians to check if an individual and the investments they offer are registered.”
The order alleges that after gaining the trust of a Missouri resident, Stanford approached the individual about investing in a hedge fund using funds withdrawn from the resident’s Roth IRA and two annuity accounts. Stanford claimed he was following the market closely, and could compound the interest on the hedge fund monthly rather than annually, which was a false assertion. He also claimed any taxes the investor would owe because of the withdrawals from their annuities and Roth IRA would be covered by the profits the investor would earn from the hedge fund investment.
According to the order, Stanford instructed the resident to make checks payable to the Statewide checking account. He would deposit and disburse those funds to the hedge fund company on behalf of the investor—a red flag for investors, who have a right to manage their own accounts directly. The investor gave Stanford a total of $11,000. After requesting a refund, the Missouri resident had a difficult time contacting Stanford, and eventually never heard from him.
Instead of depositing funds into the Statewide account, the order alleges Stanford commingled investor funds with his personal funds and used them for personal expenditures, including cash withdrawals, child support payments, restaurant and medical expenses, satellite television service, cellphone expenses, car payments and utilities.
Kander’s order seeks full restitution, fines and the costs of the investigation.
For more information, call (800) 721-7996 or visit www.MissouriSafeSavings.com.
Visit www.sos.mo.gov to learn more about the Office of the Missouri Secretary of State.