Alabama Annuity News

Ozark Man Indicted For $2.8 Million Securities Wire Fraud

Bradley J. Schlozman, United States Attorney for the Western District of Missouri, announced today that an Ozark, Mo., man has been indicted by a federal grand jury for his role in a conspiracy to defraud 115 investors of more than $2.8 million in a securities fraud and wire fraud scheme.

Jack A. Calvin, 65, of Ozark, was charged in a three-count indictment returned under seal by a federal grand jury in Springfield on Jan. 24, 2007. That indictment was unsealed and made public upon Calvin’s arrest and initial court appearance on Monday, Feb. 5, 2007.

Count One of the federal indictment alleges that Calvin participated in a conspiracy to commit securities fraud from approximately January 1999 to at least March 2002. Calvin was the primary promoter of Growth Benefit Systems (GBS), which the indictment describes as a “sham letter of credit trading program.”

According to the indictment, Calvin, operating through GBS and other individuals, represented to investors that their funds would be pooled and used in a purported trading program that would yield 20 percent per month. Calvin allegedly told investors that their initial investments would be guaranteed by a promissory note, which purportedly provided an 8 percent return, payable within 13 months. In fact, according to the indictment, such bank trading programs do not exist and Calvin and others did not place any of the investors’ funds in the purported trading program. Instead, Calvin and others allegedly spent most of the $2.8 million raised from approximately 115 investors for their personal benefit and/or to pay purported “commissions” to themselves and others who helped them perpetrate the fraud.

Count Two of the federal indictment alleges that Calvin committed securities fraud. In the offer and sale of securities, the indictment says, Calvin employed a scheme to defraud, obtained money by means of untrue statements of material facts, and engaged in transactions and business practices that operated as a fraud and deceit upon the purchaser of those securities.

Count Three of the federal indictment alleges that Calvin committed wire fraud. According to the indictment, Calvin made interstate telephone calls and transmitted faxes that were in the nature of “lulling statements” intended to falsely explain to the investors why they had not yet received their promised investment returns and/or to assure them that they would eventually receive their promised investment returns. Those communications, the indictment says, included an unindicted co-conspirator (who was to disseminate that information to the investors) and an investor in New York.

This case is being prosecuted by Special Assistant U.S. Attorneys Silvestre A. Fontes and Louis A. Randazzo, attorneys for the U.S. Securities and Exchange Commission. It was investigated by the U.S. Securities and Exchange Commission

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	Did You Know?
	The NASD Reminds Members of Their Responsibilities Regarding the Sales of Variable Annuities NASD is an independent self-regulatory organization charged with regulating the securities industry, including sellers of variable annuities. The NASD recently issued a release to its members reminding them of their responsibilities to investors in selling variable annuities (NASD Notice 99-35, "The NASD Reminds Members of Their Responsibilities Regarding the Sales of Variable Annuities").