Volume 1 Number 4
January 26, 2004








 

 

OFFICE OF FINANCIAL REGULATION

LOCAL ENTREPRENEUR SENTENCED IN SECURITIES FRAUD CASE           

The former owner of a Broward County-based home delivery service company has been sentenced to 20 years in federal prison after he was convicted in November on multiple charges of securities fraud, money laundering, wire fraud and conspiracy.

“Individuals who take advantage of Floridians, especially our elderly residents, will not be tolerated,” said Chief Financial Officer Tom Gallagher, who oversees the Department of Financial Services. “Making sure scam artists get jail time sends a strong message to those who are thinking of preying on our seniors.”

More than 450 investors, including 60 Floridians, gave Paul R. Johnson, 32, formerly of 1533 SE 9th St., Deerfield Beach, nearly $19 million, which he placed in mostly fraudulent investments.  Johnson spent nearly $6 million in investor funds to purchase a Miami nightclub, buy $700,000 in gifts, pay off gambling debts and fund a personal entourage.

Investigators with the state’s Office of Financial Regulation discovered the offenses and initiated a joint investigation involving the SEC, FBI, IRS-Criminal Enforcement Office, and the Florida Department of Law Enforcement. 

“All of the agencies involved deserve credit for bringing this matter to justice,” said Don Saxon, director of the Office of Financial Regulation, which regulates securities in Florida. “Through our commitment to working together, we can continue to protect the citizens of Florida.”

The SEC previously filed a civil suit in 2001 alleging securities fraud and money laundering. The case was delayed pending the criminal proceedings, but the SEC did freeze Johnson’s personal and business accounts.

Potential investors are advised to verify that they are dealing with a licensed broker and that the investment product is legitimate. Investors are urged to call the department’s toll free consumer helpline at 1-800-342-2762 for more information.