The Ohio Department of Commerce's Division of Securities is urging Ohioans to take a thorough, critical look when encouraged to invest in any non-traditional investment scheme.

The department is joining the Federal Trade Commission and the North American Securities Administrators Association today in raising public awareness of these schemes. A free “Investor Alert” that outlines the problem and suggests ways to guard against such schemes can be obtained by calling the Ohio Investor Protection Hotline at 1-800-788-1194.

“The tactics of investment swindlers can be powerful and, unfortunately, quite effective,” said Donna Owens, director of the Ohio Department of Commerce. “While their sales pitches may seem out of the ordinary, they are oftentimes just new twists on old schemes. To ensure that you are not taken in a scheme, do your homework before you invest.”

In recent months, the Division of Securities has taken action in response to several non-traditional schemes. Examples of some of these schemes include:

• The marketing and selling of the frozen embryos of a cow named Missy Cool lured an Ohio investor to make a $9,000 investment in a joint venture. This venture, however, was not registered for sale in Ohio or exempt from registration. The Division issued a cease and desist order against Michael D. Mahaffey of Hilliard who was the managing partner for the joint venture. (See information at the end of this release on a video news release.)

• In Newark, Ohio, Theodore E. Mong II may have given the appearance that he and his company, Liberty Bell Association, were properly licensed to sell securities. Instead of working out of a hidden away basement and soliciting over the telephone, Mong opened a storefront office and advertised his services in the local newspaper. In one advertisement, he promised a 230% return on a minimum deposit of $2,000 over a four-year period. Unfortunately, 40 central Ohio investors were caught in this fraudulent scheme and lost approximately $1.5 million. The Division of Securities investigated this case and made a criminal referral to the Licking County Prosecutor's Office. Mr. Mong was indicted on June 19, 1997 on 79 counts of securities law violations and one count each of receiving stolen property and corrupt activities under the Ohio Corrupt Activities Act. Mong pled not guilty to all the counts when he was arraigned on June 30.

• Specialized Mobile Radio, a set of dedicated radio frequencies or channels similar to cellular telephone communication, was the product used to lure a West Chester, Ohio couple to purchase more than $83,000 in stock, promissory notes and an interest in these companies. Securities salesperson Bruce Schuerger of Fairfield sold these securities involving companies in which he had a financial interest and was the sole proprietor. These securities were not registered, he misrepresented the risk, return and use of proceeds to the investors, and he had sold them without the authorization of his brokerage firm. The Division issued a cease and desist order against Schuerger.

• Timber was the non-traditional scheme that Fredrick Steven Greetham of Wellington used to lure Ohioans to purchase approximately $80,000 in Equishare Timber Management, Inc., an Arizona timber company, and International Timber Management, an Idaho timber company. Greetham, who was not licensed to sell securities in Ohio, was issued a cease and desist order from the State of Ohio.

To help prevent Ohioans from falling prey to similar schemes, Commissioner of Securities Thomas E. Geyer offers the following advice to prospective securities investors:

1. Investigate before you invest. Telephone the Ohio Investor Protection Hotline at 1-800-788-1194 to check if the salesperson and brokerage is licensed and if the security being offered is properly registered. When calling, prospective investors should have the legal name of the salesperson, brokerage and security.

2. Understand how your money is to be used and learn the facts and the risks about the investment. Beware of “can’t miss” deals and "guaranteed returns." Remember, if it sounds too good to be true, it probably is.

3. Don’t be pressured by phrases such as “tomorrow may be too late” and "I have only one investment left" to get you to invest immediately. Remember, you did not ask them to contact you. If they pressure you, hang up! In this instance, it’s acceptable to be rude.

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The Division of Securities promotes an honest and fair securities market where individuals and businesses can raise capital and investors can expect a fair return on their investment. Other Commerce divisions enforce regulations regarding industrial compliance, financial institutions, real estate, auctioneers, and unclaimed funds, among others. On July 1, the former Department of Liquor Control joined the department as the Division of Liquor Control.