Make us your home page
Instagram

Column: Penny stock promises end in fraud charges

If there's one thing penny stock promoters have in plentiful supply, it's imagination. Turquoise Development Co. sounds glamorous and romantic. The Caribbean beaches pictured on the company Web site could have come from a travel brochure ... white sand beaches, swaying palms and, of course, a turquoise Caribbean. Who wouldn't want to invest in a company that seeks "high-yielding investment opportunities" in such a beautiful place?

For investors, it was all an illusion. Federal prosecutors say Turquoise Development was one of more than four dozen "worthless, nonexistent or near bankrupt" companies involved in a $70-million penny stock fraud based in the Tampa Bay area.

Paul Gunter of Odessa and his daughter, Zibiah, of Oldsmar recently were charged with mail, wire and securities fraud and money laundering. She was released last week on a $150,000 bond, while he remains in the Hillsborough County Jail with a detention hearing set for this week. "He's maintaining his complete innocence of any wrongdoing," said Gunter's lawyer, Howard Anderson, assistant federal public defender. Four other alleged conspirators, two of them with Tampa Bay ties, have not been charged.

Investigators say ring members stole the identifying stock numbers (known as CUSIP numbers) of defunct corporations. They'd incorporate a new company under the same name as the old one and then represent the two companies as one and the same. With a little sleight of hand, they could get a new CUSIP number, a new stock symbol and a new name. Then they were off and running.

Investigators say Gunter kept "to-do" lists on his computer. The one for setting up a company included these key ingredients: an escrow account for investor money, a Web site, a Florida business license, a telephone answering service, a FedEx account and someone to serve as company administrator. The list for later on mentioned cleaning hard drives, destroying leftover paperwork and researching Switzerland as a new home for escrow accounts.

A boiler room in Spain called investors in the United Kingdom, giving them the impression there was little to no risk involved and that the value of their shares was almost guaranteed to increase significantly. That should have been a tipoff right there, of course. But apparently many of the victims were sufficiently impressed by the spiel to send their money to Florida.

Yet there is no reason for anyone to lose money in penny stock schemes. Strangers who contact you with investment opportunities have their interests at heart, not yours. Listening to their spiel is a mistake. Just hang up. If they call back, hang up again.

Avoid becoming
a victim

•Never buy investments from strangers who solicit you.

•Don't buy individual stocks unless you've researched the companies yourself. Stick with mutual funds if you're not up for the research.

•Keep in mind that small companies without an established record of profits are inherently risky. Don't invest more than you can afford to lose.

Column: Penny stock promises end in fraud charges 03/22/08 [Last modified: Monday, March 24, 2008 3:45pm]
Photo reprints | Article reprints

© 2017 Tampa Bay Times

    

Join the discussion: Click to view comments, add yours

Loading...
  1. Clearwater attorney accused of condo foreclosure trickery fights back

    Real Estate

    The Clearwater lawyer accused of tricking a bidder into paying $458,100 for a gulf-front condo now plans to contest a judge's order tossing out the sale.

    John Houde, left, looks in the direction of Clearwater lawyer and real estate investor Roy C. Skelton, foreground, in August during a hearing Sixth Judicial Circuit court Judge Jack St. Arnold at the Pinellas County Courthouse. The judge agreed with Houde's allegation that he was duped by Skelton in thinking he bought a Redington Beach condo for $458,100 out of a foreclosure auction. Now Skelton is fighting back. 
[DOUGLAS R. CLIFFORD   |   Times]
  2. How a group of Florida tomato growers could help derail NAFTA

    Agriculture

    Tony DiMare, a third-generation Florida tomato grower, has spent two decades contending with cheap Mexican imports, watching his neighbors abandon crops in their fields and sell off their farms when they couldn't match the price of incoming produce.

    Workers fill a trailer with tomatoes as they harvest them in the fields of DiMare Farms in Florida City. [Joe Raedle | Getty Images(2013)]
  3. Pinellas deputies go door-to-door at dawn to arrest unlicensed contractors

    Crime

    Pinellas deputies began pounding on doors at 5 a.m. Tuesday, part of a widespread roundup of contractors accused of working without licences and workers compensation.

    Pinellas Sheriff deputies J. Short, left, and T. Festa, right, arrest suspect Randy Ronchi, center, in Largo early Tuesday, as part of a joint roundup of unlicensed contractors. [SCOTT KEELER | Times]
  4. HQ2 watch: As deadline looms for Amazon headquarters pitch, one metro bows out

    Business

    If there's one national business saga to keep up on these days, it's the frenzy by metropolitan areas — including Tampa Bay — to make their best pitches to Amazon in the hope of being chosen as the new location for the giant online retailer's second massive headquarters. HQ2, as it is called, would create …

    Cities across the country are trying to land Amazon's second headquarters, known as HQ2. In Birmingham, Ala., giant Amazon boxes were constructed and placed around the city as part of its "Bring A to B" campaign. [Ali Clark/Bring A to B Campaign]
  5. Shares in Tampa's Health Insurance Innovations rebound from stronger earnings report

    Corporate

    TAMPA — After a sharp drop in its stock price in August and September, Health Insurance Innovations on Monday announced strong revenue and net income gains in preliminary numbers for its third quarter of the year. The company also announced a $50 million stock buyback over the next two years meant to bolster its …

    After losing more than half its market value between August and September, shares in Tampa's Health Insurance Innovations are rebounding."The new share repurchase program underscores our confidence in our business strategy, financial performance, and the long-term prospects of our company while also allowing us the financial flexibility to continue to invest in our business," company CEO Gavin Southwell announced Monday. [Courtesy of LinkedIn]