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Permanent injunction approved against Centerville businessman accused of securities fraud
DAYTON — A permanent injunction has been approved against a Centerville businessman and his three companies, all accused of securities fraud by the Ohio Department of Commerce.
Both the preliminary and permanent injunctions were approved Tuesday and signed by Montgomery County Common Pleas Judge Mary Wiseman. Those injunctions, prohibit Wayne T. Essex and his companies from:
• selling or offering to sell securities in violation of the Ohio Securities Act • selling or offering to sell securities without prior approval of the court • engaging in any deceptive, fraudulent or manipulative act
The affected companies are Essex And Associates, Inc., in Dayton, Essex HR & Associates, Inc. in Beavercreek and HR Reconciliation, LLC in Dayton, according to the commerce department.
In December 2011, Judge Wiseman issued a temporary restraining order against Essex and his companies. Wiseman also appointed local attorney James Swaim as receiver, who will work to recover Essex’s business assets for distribution as approved by the court.
The Division of Securities initiated the action based on allegations that Essex sold promissory notes in the Dayton Small Business Capital Fund, which he told investors would be invested in Dayton-area small businesses. Twenty investors purchased approximately $1.1 million in the fraudulent investment between July 2010 and November 2011. The state charges that Essex never made loans to or investments in small businesses with the money, according to court records.
The Division’s investigation found that Essex sold securities without a license, sold unregistered securities and engaged in securities fraud. The Division also found that Essex commingled investor funds with his business and were used to support his personal lifestyle, including out-of-state travel, according to the court records.
Essex did not tell investors that he was not licensed to sell securities and that the securities were not properly registered. Essex told investors that their funds were guaranteed and that they would receive annual returns of five, seven or 10 percent - with higher rates to those who invested larger dollar amounts, according to the commerce department.
Essex said in December that he was “disappointed and a bit dismayed” by the commerce department’s position. He said that earlier that month, after state officials approached them, company officials began the steps to properly liquidate the fund.
“The majority of investors have already received all of their initial investments, with the full amount of interest promised,” Essex said. “Any remaining investors have received the significant majority of their initial investment, and we expect that in the very near future, once all liquidation efforts are complete, every investor will receive not only their initial principal investment, but all promised interest as well.”
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