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PCR #166  (Vol. 4, No. 22)  This edition is for the week of May 26--June 1, 2003.
La Floridiana by Will Moriaty
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Don't Get Fooled, Fleeced and Flimflammed in Florida

Foreword: In some archived edition of PCR, Mike "Deadguy" Scott gave an excellent run down in one of his "Dementia" columns about coming to grips with, and preparing for, our passing from this world - - simply put, our death.
   This week's La Floridiana examines the topic from a slightly different perspective.
   Prayerfully, most of us will live long enough and be healthy enough to spend our last years on earth having reaped a bountiful financial reward from all of the efforts and sacrifices we made during our working years. For most of us, however, this rosy outlook will not come to pass. With the slimmest savings in American history, and a Social Security system that is teetering into insolvency, it is doubtful that most or any of us will be generously rewarded in later life for our work today. Shy of being born into wealth, or inheriting wealth, most of us from lower and middle-class backgrounds will sadly spend our remaining later years working up until forced retirement or death.

A Financial Plan
Unless starting as young in life as possible you have a plan on how to spend and save your earnings, odds are not in your favor of living life comfortably later in life. To plan for this inevitability, a sound financial plan is tantamount. But be aware that there are human parasites that would rob you of all of your money in a heartbeat without as much as pulling a trigger or a knife. No, this type of theft occurs simply by your signing on the dotted line for what you think will be a profitable investment at the advisory of flim flam confidence men who have no ethics or sense of remorse to pilfer every dime that rightfully belongs to you. This is a true story of such a pilfering, a pilfering that recently happened to my family. As there are civil and criminal investigations pending on this matter, the names of all but unaffected entities have been changed.

Anatomy of A Fraud
About ten years ago a member of my family who was in the military met a securities adviser who we will name "Friendly Freddy". My relative believed in Freddy's skills and competence and presumably used his services in a mutually satisfactory manner over the course of a decade. My wife and I were introduced to Friendly Freddy in 1998 as my relative thought that Freddy could mutually help all of us out through what my relative perceived to be more than adequate skills in the world of investment securities. So we plunked $20,000 into what we will call a "Wurst Choice Management Services" account. The account was founded by Adolphus Von Wurst who ran the operation out of a small converted cinder block house on Seminole Avenue near Bay Pines Hospital in Pinellas County. Von Wurst stated that the account would yield a guaranteed 12% quarterly dividend return and that the account was given an AM Best Rating by Lloyds. After two years we never saw a dime of the investment and it turned out that Lloyds was not the respected Lloyds of London, but basically a badly crafted letter size sheet of paper probably run off of Von Wurst's home computer.

When In Doubt, Spend!
You'd have thought that we would've learned our lesson not to go back to the well and invest again with Friendly Freddy, but like kids drawn to music, we were back for more punishment. We placed and even larger pot of money ($500,000.00) into a limited private offering investment for a medical industry operation that we'll call "FeePhyFoeMeds, Inc." (or "F.P.F.M., Inc".). F.P.F.M., Inc. offered a 12.5% quarterly return on an eighteen-month subscription to Preferred Convertible Shares. When discussing the offering prior to our signing on, Freddy flashed a copy of a Performance Bond in front of our faces and bantered about that "With this Performance Bond the degree of risk of this security would carry about the same amount of risk of getting eaten by a Great White Shark while sitting in your own easy chair at home and munching on Nacho Shards while watching reruns of Gilligan's Island!" What could we possibly loose? Sign me up Bubba, I'm ready to rock n' roll! We had faith in Friendly Freddy (chalk part of that up to short memories), that he did his homework and led us to an investment that would be to our financial benefit. We were wrong-disastrously wrong.

Just The Facts, Ma'am
Little did we all know on that fateful evening in very early 2001 that we were being sold a bill of goods by Friendly Freddy. Two years later when consulting with a securities attorney we would find out that the sale of stock of this type is in violation of Florida law.

Also unknown to us on that early 2001 evening was the fact that the Performance Bond, that would render the degree of risk of this security to the same amount of risk of getting eaten by a Great White Shark while sitting in your own easy chair at home and munching on Nacho Shards while watching reruns of Gilligan's Island, was fraudulent.

The Bond company, which we'll call "Anonymous Fidelity Company", was an offshore operation located in the Schlepp Islands in the little known South Pacific archipelago known as Morinica. It had one North American representative, Jefferson Davis Hogg, located in Hazzard, Georgia. Surprise of surprises, it was not licensed to conduct business in the State of Florida! This prompted the State Comptroller to issue an Unauthorized Business Alert in 1998 warning securities brokers and advisers that the use of Anonymous Fidelity's bogus Bonds could result in the revocation of their licenses. This was three years prior to our investment - - somehow Friendly Freddy and F.P.F.M., Inc. were somehow both unaware of this.

Next was the fact that as early as the winter of 2000, F.P.F.M., Inc., and its President, Hedley Lamar, had their hands full of legal actions from Lakeland to Laredo. In Colorado they were busted for using an unlicensed insurance agent to sell their securities of theirs in the form of nine-month promissory notes. - - the State of Arizona named Lamar ("That's Hedley!") personally for using an unlicensed insurance agent to sell securities unregistered in that state on behalf of F.P.F.M., Inc.

Lastly, careful research of the language of F.P.F.M., Inc's Year 2000 Prospectus showed that the company, which was only a year and a half old at that time, was over 4.3 million dollars in debt and well shy of its forecasted business benchmarks. Good Ol' Friendly Freddy shared none of that information with us as he was legally required to do, on the cold winter's night in 2001.

After hindsight investigation of all of these activities, one must come to one of the following two conclusions. Either Friendly Freddy did not show due diligence in his capacity as a securities broker (a.k.a. incompetence), or he intentionally misled us through omissions and misrepresentations (fraud).

Be here for PART TWO where F.P.F.M. Inc. changes Bonding companies to another South Pacific operation, this one with Bob and Doug McKenzie, Great White North, as North American representatives, and you get to witness the other shoe fall on our investment, where afterward my wife and I get fitted for the proper barrel size after losing a small fortune, all in next week's NCPCR/La Floridiana!


"La Floridiana" is ©2003 by William Moriaty.  Webpage design and all graphics herein (except where otherwise noted) are creations of Nolan B. Canova.  All contents of Nolan's Pop Culture Review are ©2003 by Nolan B. Canova.