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Ohio Division of Securities Issues Summary of Recent Securities Fraud Orders

Ohio Division of Securities Issues Summary of Recent Securities Fraud Orders

The Ohio Department of Commerce Division of Securities released recently a summary of the Orders issued by the Division last month. The Division issued three Cease and Desist Orders and one Consent Agreement in a total of three cases.

The Division ordered John P. Tonelli, Jr., of Batavia, Ohio, to cease and desist from engaging in any securities-related activities after an allegedly fraudulent transaction came to the Division’s attention. According to the Order, Tonelli allegedly represented himself to his cousin’s husband (Mr. Ricks) as operating under the name Rapid Cash Flow Solutions, and solicited an investment from Mr. Ricks in ASM Financial Funding’s Wealth Enhancement Club (WEC). WEC was purported to be a joint venture program of ASM Financial Funding Corporation (ASM), and one which ASM managed.

Tonelli allegedly represented the WEC investment as a short-term, low-risk opportunity that would render a profit of 10 percent. He also allegedly assured Mr. Ricks that his principal would be protected. Mr. Ricks believed Tonelli’s claims and invested a total of $200,000 in WEC. (The funds were from an insurance settlement the husband and wife received for damage done by Hurricane Katrina to their Louisiana home.) Tonelli later solicited an additional $30,000 from Mr. Ricks for another investment. At no time was Tonelli registered to sell securities in Ohio. The securities sold by Tonelli to Mr. Ricks were also unregistered. Mr. Ricks has yet to receive back any of the $230,000 he invested with Tonelli.

Ohio Kentucky Oil Corporation, an oil and gas business with offices located in North Canton, Ohio, was also named in a Division Cease and Desist Order. According to the Order, Ohio Kentucky paid a $2,826.50 commission or "bonus" to an employee as a result of a 2006 Ohio securities transaction in which one Ohio investor purchased $43,515.00 worth of shares in an Ohio Kentucky Joint Venture investment product. The employee was not a licensed Ohio securities dealer at the time of the sale. Further, the Division states that the product’s Form D filing stated that, "no commissions were being paid to anyone involved in the sale of the offering." The Division found that the employee’s "bonus" violated state securities regulations.

The third Cease and Desist Order issued by the Division last month was against Universal Property Development Corp. (formerly known as ProCore Group, Inc.), a California corporation located in University Heights, Ohio. In the Order, the Division accused Universal Property of soliciting an investment in and selling $100,000 worth of unregistered securities in ProCore Group, Inc. in 2005.

Additional information about these cases are available on the Ohio Division of Securities website.

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