According to reports, David L. Olson of Lakeland, Fla. will plead guilty of conspiracy, mail fraud, wire fraud, securities fraud and money laundering.
The charges relate to funds raised for A&O Companies, the company for which Olson was the president (the company’s CEO, Edward A. Allen, 35, of Auburndale, Fla., is facing similar charges and penalties).
The indictment alleges that between 2006 and Jan. 20, 2009, the two solicited investors to buy into their company’s real estate ventures. Prosecutors claim they then used the money they took from investors to pay for employees’ salaries, personal expenses and to pay off other investors, whom they promised between 20 and 45 percent interest on their return.
The indictment also states that Allen and Olson lied to investors, telling them their investment was secured through promissory notes and guaranteed through a lakefront Florida property. The property, however, was promised as collateral on more than $8 million in promissory notes, while the property was purchased for only $425,000, before a sinkhole that drained water from the lake developed and reduced its value.
The criminal case stems from a 2010 civil suit filed by the Security Exchange Commission, which alleged the two fraudulently misrepresented unregistered offers and sales of securities and provides more insight into the scheme.
The complaint filed by the SEC said Allen and Olson raised about $14.8 million and promised 20 percent annual returns to at least 100 investors in nine states. The filing also said the two only spent $5.1 million on purchasing and rehabilitating property. It said the investors took $2.2 million for themselves, $3 million for employee salaries and $1 million for a “lavish” office building.
Allen and Olson recruited investors through the Georgia-based World Group Securities, Inc., where both were registered representatives. Olson worked until 2007 at the Boardman branch.
To the extent that an individual invested with Allen or Olson while either were employed by World Group Securities, they may be able to recover their losses through FINRA arbitration.
Even if a financial advisor is conducting business without the knowledge of his employer, the firm may still be liable for negligent supervision of their broker representative and may be responsible for investment losses in a FINRA arbitration claim.
If you have suffered losses due to your investment with Allen or Olson and would like to speak to a securities attorney about your potential to recover those investment losses, please call The White Law Group’s Chicago office at 312-238-9650.
The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm with offices in Chicago, Illinois and Boca Raton, Florida.
For more information on The White Law Group, please visit our website at http://www.whitesecuritieslaw.com.