State investigation nets securities fraud charge against Springfieldian

A Springfield man was charged with securities fraud following an investigation by the Missouri Secretary of State’s office for allegedly leading an investment scheme involving at least two backers and $450,000.

Missouri Secretary of State Jason Kander’s office charged Paul Benton Weeks III with a felony count of engaging in fraud, which included misrepresentation in the offer and the sale or purchase of securities in Greene County. According to online court documents, Circuit Judge Dan Imhof issued a warrant for Weeks’ arrest on Christmas Eve, and he was arraigned Jan. 14 and released on $25,000 bond the following day.

Upon his arraignment, Kander issued a cease-and-desist order against Weeks and his company, Lavender Farms LLC, alleging Weeks collected at least $450,000 from two investors after promising returns of 50-100 percent.

According to a news release from Kander’s office, the order alleges Weeks convinced two individuals to invest funds into what he called a “risk-free” opportunity through a network of investing “experts.” Weeks told investors to wire funds to a Scottrade account under his control, but they were assured they would be able to have access to the account and would receive monthly statements detailing the account transactions, holdings and balance.

One individual invested $250,000 with Weeks and was promised a full return plus half of any profits made by the investment. The other invested $200,000 and was initially promised a 50 percent return by Weeks.

According to the order, Weeks told the first investor he and his wife had applied to finance the construction of a rural orphanage in China and would use a portion of the profits received from the investment. The order alleges Weeks fabricated account statements to distribute to investors, reflecting extremely high returns when, in fact, Weeks and his wife used the accounts to make withdrawals for personal use.

The investigation revealed Weeks had signed promissory notes with both investors, assuring them their funds would be repaid, and then refused to pay when the notes became due.  Allegedly, in at least one instance, the second investor requested a return of invested funds and was told by Weeks they would receive money “only if you keep your head and not try to disparage me and my family,” according to the release.
   
The cease-and-desist order seeks restitution, fines and the cost of the investigation. Weeks retained criminal defense attorney Thomas Carver of Springfield firm Carver, Cantin & Grantham LLC. A bond appearance hearing is set for 9 a.m. Feb. 18 in Greene County court.