ROGERSVILLE, Mo. -- Even investors who suspected that a local volunteer firefighter was lying about being a convicted felon put thousands of dollars toward his business ventures.
Many never knew the truth until recently. But those who did confront 53-year-old Roy Harris, of Rogersville, were met with denial about his convictions in 2002 for felony stealing, securities fraud and deceptive business practices, according to Secretary of State Jay Ashcroft's office.
These and other charges were levied against Harris earlier this month by Ashcroft's investment fraud squad, which alleges numerous instances of misleading business activity over several years.
Harris, who has spent time as a volunteer firefighter with the Logan-Rogersville Fire Protection District, now faces the possibility of paying several $15,000 civil penalties for violating state securities law and an order to pay at least $622,889.81 (plus 8 percent annual interest) in restitution as a result of his attempts to reel in donations from Missourians and people around the country.
David Minnick, Ashcroft's commissioner of securities, noted that Harris has the right to request a hearing in order to argue his case and present additional evidence but has not done so yet.
Minnick added that the civil penalties against Harris and his companies could combine to reach $180,000.
Harris told the News-Leader on Thursday the "numbers are erroneous and the accusations are misleading" and expressed confidence the matter would be resolved.
Harris did not deny concealing his felony conviction from investors but claimed that they solicited from him and not the other way around. He also said the News-Leader's story would do more harm than good and added that the Secretary of State's office exaggerated the figures in its investigation and "their claims about uses of the money are not correct."
"It's typical grandstanding," Harris said in a brief interview.
As people were wiring him money they have yet to see returned, Harris was earning recognition outside of his business schemes.
For his efforts to save a family of five whose vehicle was swept into floodwaters in May 2015, Harris was among the Logan-Rogersville firefighters who were honored by the International Association of Water Rescue Professionals, the News-Leader previously reported.
The district recognized Harris in January on the five-year anniversary of his service.
Chief Richard Stirts of the Logan-Rogersville Fire Protection District confirmed that Harris volunteered for the district but did not want to comment in detail until he had reviewed the state's allegations.
Stirts noted that Harris "came from Texas with a lot of training." The chief had not seen Harris in a couple of weeks, but "that's not uncommon. We don't see him a lot," Stirts said.
"We'll have to take it before our board and see what it does affect," Stirts continued. "Obviously, it is an item of interest to us that we need to look at and address."
Harris later told the News-Leader he had recently resigned due to health reasons.
In August 2014, Harris spoke to the News-Leader about the Logan-Rogersville district's training efforts to prepare for ignited crude oil being shipped through southwest Missouri by rail.
But from June 2014 to May 2017, Harris "solicited at least 25 investors to invest more than $1 million in unregistered stock" in companies he created with names like Orthogistic and Amniogistic - without telling his benefactors that he had been convicted of a felony, according to Ashcroft's office.
The companies Harris formed have the veneer of legitimacy. Orthogistic has a working website that offers links to information about its leadership, products and order forms, though many pages are protected by passwords. And the company appears to have had patents for products like WoundCleanse and SurgiCleanse, purportedly a disinfectant solution that "kills" HIV, tuberculosis, "and other "superbugs."
But when investors and investigators scratched past the surface, the gloss came off.
Several of the investors got involved with Harris after he met a 45-year-old resident of Alpharetta, Georgia, in 2015. Harris gave a presentation about his pharmaceutical products at the Georgia man's workplace and gave investors the impressions that his chemicals were FDA-approved and that Harris "had potential clients in the Middle East and the U.S. Defense Department," Ashcroft's office determined.
That was good enough for the Georgia man, who sent Harris $110,000 over a period of time in late 2015 and early 2016. The man received stock certificates good for 400,000 shares in one of Harris' companies. No money has made its way back to the man, Ashcroft's office said.
But the Alpharetta investor encouraged several relatives and acquaintances in Pennsylvania, Texas, Georgia and Wyoming to also invest with Harris. All told, Harris gleaned at least $300,000 more from these connections - none of whom told Ashcroft's office they were aware of his felony conviction.
Other investors were more careful. A 38-year-old man in New Jersey heard about Harris through a cousin and listened to his pitch during a conference call in March 2016. According to Ashcroft's office, Harris said he had a West Coast distribution deal lined up with a major health-care entity and expected his business to generate more than $20 million over three years.
Before investing, though, the New Jersey resident looked up Harris' history and found federal tax liens and a history of criminal and civil litigation. He confronted Harris about the findings in an email.
Harris replied that the tax liens had been resolved and the civil judgment was an unsupported lawsuit over a land deal. He also disputed being "charged or convicted of any theft" and said that he couldn't have a concealed carry permit or clearance to work as a firefighter or deputy if he had indeed been convicted, according to Ashcroft's office.
"When you are doing a background check in future please use correct and reliable sources," Harris told the man.
Impressed by the proposal and undeterred by the background check, the New Jersey man contributed $60,000. Afterward, he learned the deal never happened, Ashcroft's office alleged.
A 51-year-old Rogersville investment adviser and financial planner sent Harris $50,000 after finding Harris' criminal history online. Harris denied that he was the same Harris convicted of the felonies in question when confronted.
Harris pleaded guilty in September 2002 to several felony violations of unlawful merchandising practices, stealing and securities fraud, and he was sentenced to several years in state prison, according to online court records.
According to an old news release from Roy Blunt (now a Republican U.S. senator and Missouri Secretary of State in 2002), multiple Missourians invested more than a quarter-million dollars with Harris under the presumption he would use the money to buy stock and make them millions. Instead, he used the money to pay for his personal expenses, according to the release.
The state's recent review of Harris' financial coffers shows more of the same.
A Kansas resident - among Harris' earliest investors - met Harris in Springfield and provided at least $150,000, purportedly to develop pharmaceuticals.
Harris transferred about $125,500 to a personal account and later withdrew about $103,000 in mid-2015. Ashcroft's securities team traced the money and determined Harris had used it to buy a house in southern Missouri.
A credit union associated with Orthogistic was filled with more than $100,000 in wire transfers from various investors and checks from Texas for the purchase of products. From there, $37,000 went to Harris' personal account, about $37,000 more went to a pharmaceutical manufacturer, and more than $25,000 in payments were made to banks, convenience stores, retailers and "INTERNET," according to Ashcroft's office.
A similar account racked up a balance of about a half-million dollars. From that, about $57,000 went to Harris and more than $87,000 was spent on payments to banks, credit card companies, airlines, motels, "INTERNET," big box stores, and other vendors, according to Ashcroft's office.
The check from the fellow Rogersville resident went to another account for a different Harris company. Disbursements from this fund included more than $7,000 spent on food, shipping, shopping and computer expense, Ashcroft's office said.
One 73-year-old Florida investor wired $100,000 to Amniogistic and, after learning that Harris lied about being a convicted felon, demanded the money back. Harris sent back half, including $25,000 in "medical products (stem cells) as partial compensation," according to Ashcroft's investigation.
Eventually, Harris fessed up.
Ashcroft's office says the man called state securities enforcers in July 2017. Harris admitted he didn't tell his investors about his securities fraud conviction. In a subsequent call, Harris said he informed his investors and provided correspondence with his lenders from December.
"I haven't taken 1 penny in dividends and left mine in the company to be very clear," Harris wrote. He went on to tell folks he was sorry for hiding his felon status. "I apologize for not sharing this upfront with you all and will accept anything that comes for that failure to disclose that to you."
(Story shared by Springfield News-Leader. Read the original article here.)
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