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Judge issues temporary injunction in alleged CD investment scam

A Brevard County Circuit Court judge has issued a temporary injunction against several companies that were allegedly taking investor money under the false premise of selling federally insured certificates of deposit.

The injunction was issued against First Merchant Capital LLC, Capstar Industries LLC, Southeast Mutual Insurance and Investment, Donald Ray Babb, Ralph V. Ruth and Catherine Ruth, state regulators said Wednesday.

The Florida Office of Financial Regulation alleges the defendants have lured at least 30 customers to invest nearly $3 million in a sham CD program since August 2011. The sales pitch, which included ads in the Tampa Bay Times and Jacksonville's Florida Times-Union, targeted primarily elderly investors with the promise of CDs paying the "highest rates in the nation," regulators said. The OFR said it is investigating allegations that the defendants falsely claimed the CDs were insured by the Federal Deposit Insurance Corp. and that investors' proceeds have been misused.

The companies have been placed under receivership as the inquiry continues.

Judge issues temporary injunction in alleged CD investment scam 11/27/13 [Last modified: Wednesday, November 27, 2013 6:56pm]
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