The Oregon Department of Consumer and Business Services said Tuesday it has imposed a $1 million civil penalty against a Vancouver, Wash., man who promised big returns to investors who paid him $25 apiece.
On a website, Shelby H. Bell described his Hobo Prince Economic Project as a privately funded and managed "stimulus package," promising investors a return of $900 a week for seven years.
While no investors apparently have made money, Bell in less than a year attracted more than $187,000 from at least 7,480 people in multiple states and U.S. territories.
"Not only has Mr. Bell offered false hope to thousands of people, he refused to shut down his operation after being told he was violating Oregon securities law," said David Tatman, manager of the department's Division of Finance and Corporate Securities.
State investigators found that Bell was not licensed to sell securities in Oregon and the investment was not registered with the state. Additionally, claims about Bell's financial worth and details of the investment were untrue, and Bell failed to disclose key facts to investors.
Bell claimed to be worth billions with backing from the U.S. Treasury through an International Bill of Exchange, which actually has no value. Also, investigators determined that Bell used investors' money to pay for food, movie tickets, a vehicle, and other personal expenses.
State law allows penalties of up to $20,000 per violation of securities law. In addition to the civil penalty, DCBS ordered Bell and his Hobo Prince Economic Project and Be'Rio Transports to stop doing business in the state.
Here's a link to the final order: http://www.cbs.state.or.us/external/dfcs/securities/enf/orders/S-12-0064.pdf.
Bell sought clients at seminars, often at locations affiliated with religious groups. He also gave webinars and hosted a website with instructions on how to invest.
"With so many struggling in this economy, people need to take extra care before investing any amount of money," Tatman said. "What Bell was offering was false hope to those who are most vulnerable. It is our responsibility to stop such abusive schemes even though each person suffered small losses."
The Division of Finance and Corporate Securities helps ensure that a wide range of financial products and services are available to Oregonians and protects consumers from financial fraud and abuse.
It does that by licensing financial institutions and service providers, regulating the sale of securities in Oregon, investigating complaints and alleged violations of financial-service laws, and providing education and other resources to consumers.
The agency can help investors find licensing, registration, and enforcement history information on individuals, companies, and securities products. Call DFCS toll-free 866-814-9710, 503-378-4140 in Salem, or go to www.dfcs.oregon.gov and click on "Securities."
The Department of Consumer and Business Services is Oregon's largest business regulatory and consumer protection agency.