Thursday, July 17, 2003 | 11:19 a.m.
FRANKFORT, Ky. -- Kentucky is suing a Henderson company for allegedly defrauding at least 63 local worm farmers of more than $700,000 in investment startup costs, the attorney general's office said Wednesday.
A temporary restraining order was issued against Combined Resource Systems Inc. of 2920 N. Green Valley Parkway, ordering the company to stop advertising and selling in the state, the state said.
CRS allegedly offered farmers business opportunities in which investors would pay $10,000 to $30,000 for large sums of "breeder worms," a state lawsuit says.
In exchange, the company agreed to pay $6 to $8.25 per pound to buy the farmers' live-worm harvests. Instead, the company allegedly bought worms from existing growers and then sold those worms to new growers to start their own operations, an official said. Meanwhile, the company did not have enough actual independent buyers to pay for newly produced worms, according to the suit.
CRS officials couldn't be reached for comment and the Nevada Attorney General's office declined to say if the company is under investigation in Nevada.
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