Posted on 10/14/2003 12:00:05 PM PDT by JackDanielsOldNo7
Fayetteville businessman Anthony Wayne Allen was charged Monday with embezzlement by an insurance agent.
Anthony Allen, left, is escorted by Detective Sean Swain and Sheriff Moose Butler, right, at the Cumberland County Law Enforcement Center on Monday night. He is accused of taking $60,000 from a couple in July 1997. A warrant said Allen was supposed to purchase a life insurance policy and an annuity for the couple but failed to do so.
Allen is 41 and lives in the 400 block of Kingsford Road. Bail was set at $1 million. Allen, accompanied by lawmen, did not respond to questions as he walked to the jail from the Cumberland County Sheriff's Office.
The arrest came after six people filed lawsuits saying money they invested with Allen is lost or unaccounted for. Calvin Deans, identified as an account supervisor who worked for Allen, is named as a defendant in two of the three lawsuits. Four plaintiffs are named in one of the suits.
The six plaintiffs said they gave Allen a total of about $2 million to invest. They said they became suspicious as requests for the money or an accounting of the money were not fulfilled.
Allen is the publisher of a local edition of Fifty Plus magazine, which is aimed at retirees. He also is the chief executive officer of Client Relations, an estate-planning firm, and the owner of A.W. Allen Insurance Group Inc. He formed the insurance group Aug. 15, two weeks after he voluntarily surrendered his insurance license.
In 2001, Allen bought the Pentagon Federal Credit Union building on McPherson Church Road for $1.55 million. He has offices in the building as well as on the 10th floor of the Systel Building on Green Street.
Allen had failed to pay the rent at his offices in the Systel Building, according to an affidavit by property manager Stan Futrell, and the locks on those offices were changed last weekend.
Over the weekend, someone broke into the Client Relations suite. In the affidavit, Futrell said he identified Allen in a surveillance video entering and leaving the building between 11 a.m. and 12:30 p.m. Saturday.
"In his possession during this time were large amounts of files and personal belongings,'' Futrell said in the affidavit. ''On Monday morning, I also noticed large amounts of files spread over the floor of the Client Relations suite and evidence, in their office, of document shredding."
Investigators Monday night were drawing search warrants for Allen's offices, his house and his car. The searches are expected to happen this morning.
Court injunction
Judge Jack Hooks issued a preliminary injunction against Allen during a hearing in Superior Court on Monday. The injunction forbids Allen from investing any money on behalf of his clients and from destroying any related documents.
Ronnie Mitchell, a lawyer representing four of the plaintiffs, said the injunction applies to money and documents relating to all of Allen's clients, not just those named in the lawsuits that have already been filed.
About 20 people attended Monday's hearing. Larry Kidd, who is 63, said he has invested $276,000 with Allen. He said he saw an advertisement for Client Relations in Fifty Plus and decided to invest.
"It's hard to believe,'' he said. "He was very good at what he was doing."
A crowd gathered around Mitchell and his partner, Coy Brewer, outside the courtroom. There was a collective gasp when Mitchell told the group Allen was not bonded.
Mitchell said lawyers are considering a class action lawsuit. He said the District Attorney's Office, the U.S. Attorney's Office, the U.S. Securities and Exchange Commission and the State Bureau of Investigation are investigating.
In an Oct. 8 letter, an SEC lawyer told Allen that the agency was beginning an "informal, nonpublic inquiry" into Client Relations. The letter asks Allen to provide the SEC with documents and correspondence "on a voluntary basis."
"This matter is a fact-finding inquiry,'' the letter says. "The staff is trying to determine whether there have been any violations of the federal securities laws."
Retirees and elderly
Mitchell and Richard Wiggins, who is also representing a plaintiff, said Allen was preying on retirees and older people. According to the lawsuits, Allen gave presentations about investing at local churches, where he touted his abilities as a money manager. Allen promised his clients guaranteed returns and told potential clients they would be able to withdraw their money any time.
Laurinburg lawyer Terry Garner is representing an 88-year-old Hoke County woman who says she gave Allen more than $700,000 to invest. The money is missing or unaccounted for.
At a hearing in Hoke County last week, Garner asked Judge Jack Thompson to issue a preliminary injunction preventing Allen from disposing of any of his client's money. Thompson had not made a ruling as of Monday night.
Lawyer Neil Yarborough, who represents Deans, said his client plans to cooperate with the investigation. He said Deans invested with Allen. In an affidavit, Deans said he does not know where the money is, nor does he have information about the accounts.
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