Hilton Head investors defrauded, says AG’s office
05/12/2013 12:00 AM
05/11/2013 9:10 PM
A group of Hilton Head Island investors thought its money was paying for a grass farm and timber operations, but evidence suggests it really paid for shopping trips to Victoria’s Secret and Macy’s, college applications to Wake Forest and Vanderbilt, and other unrelated purchases, according to an order from the S.C. Attorney General’s Office.
The Securities Division of that office says it has found evidence that John McIntyre of Hilton Head, manager of seven limited liability corporations, spent investors’ money on personal expenses. The money was supposed to go toward a startup biofuel business called Silver Oak Energy and several timber-cutting operations in South Carolina and North Carolina.
Investors’ money was used for dining, jewelry, groceries, wine, liquor, and trips to a pet hospital and kennel, according to the cease-and-desist order.
“He started using some of the revenue that came in — mainly from the timber-cutting operations — to pay his daily living expenses,” said Daufuskie Island resident Richard Silver, an investor in the energy company and four of the timber operations. “We don’t even know whose dog was even being treated or kenneled.”
The findings by the Attorney General’s Office are not final. McIntyre has until later this month to request a hearing with the division, present evidence and refute the claims.
If he does not, the order stands and civil penalties of as much as $10,000 must be paid for each of the 39 alleged securities violations, as well as the cost of the investigation. He also can opt to pay a flat $50,000 civil penalty.
Attempts Friday to reach McIntyre and his attorney were unsuccessful.
The Attorney General’s Office attempted to subpoena documents and testimony from McIntyre, but he refused unless granted criminal immunity — something the division cannot provide, according to the order.
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