Legislative panel to study loopholes in laws dealing with investor scams

Monday, April 20, 1998 | 9:57 a.m.

At the request of Assemblyman David Goldwater, D-Las Vegas, the committee was formed by the Legislative Commission. The panel has full subpoena power in its efforts to come up with proposed new laws to be considered by the 1999 Legislature.

More than 400 individuals invested at least $22.7 million in construction and real estate loans handled by the now-defunct Harley L. Harmon Mortgage Co., owned by the former assemblyman of the same name.

Harmon promised investors a return of up to 15 percent annually on their investments, but many never got payments or recovered their principal.

The Nevada Financial Institutions Division revoked the company's license last December after a long investigation.

Some individuals invested with Harmon while he was under investigation but were unaware of the state probe and remain bitter that they weren't informed.

The state division countered that it would have been unfair to force Harmon to disclose the probe to customers if it turned out later that his company was cleared of any wrongdoing.

Goldwater, a financial adviser, got interested in the case because some of the investors are his clients. He said he would subpoena Harmon if he believed such testimony would help the committee.