Friday, Dec. 5, 2003 | 11:10 a.m.
SUN STAFF AND WIRE REPORTS
The Securities and Exchange Commission on Thursday accused two Las Vegas-area women of defrauding investors by selling interests in a fund that falsely promised to pay an annual return of at least 12 percent.
A federal judge on Thursday issued a temporary restraining order against Connie S. Farris, 59, of Henderson; Dawn M. Reese, 45, of Las Vegas; and businesses owned or controlled by Farris, the SEC said in a statement. The businesses include Global Express Capital Mortgage Corp. and Las Vegas broker-dealer Global Express Securities Inc.
The SEC claims the women offered a fund that purported to pool money from investors to buy interests in mortgage loans and trust deeds. The fund raised at least $48 million from 600 investors, and didn't generate enough income to pay monthly distributions to investors, the agency said.
"Global and its affiliates have fully complied with all state and federal regulations, and cooperated with such officials," said Charles Clawson, a lawyer for Farris and Reese at the firm Alverson Taylor in Las Vegas. "I expect the defendants will be fully exonerated."
The move by the federal agency follows regulatory action initiated by a Nevada agency this summer against Global Express Capital Mortgage.
The state Financial Institutions Division seized the company on June 12, citing 28 complaints it had received since September 2001 and accusing Global of fraudulent advertising, operating in an unsafe manner and of carrying a large number of delinquent loans -- jeopardizing the principal payments due investors.
At issue was a portfolio of 144 loans totaling about $58 million and allegations that some investors were placed in loans that substantially exceeded the appraised value of the collateral. The company completed its 60-day state conservatorship in August, when the state said it had received an infusion of capital to correct its insolvency and had filed a plan of corrective action with the FID.
But in September, the state filed charges against the company that could result in fines or the loss of its mortgage license. The state claimed the company advertised for investors in a Henderson office building called Corporate Park at 120 Corporate Park Circle and misled would-be investors about the project's collateral and loan-to-value ratio.
Global Express has denied those allegations.
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