Secretary of State Investigators Say Multi Million Dollar Scheme Was Based on Land Sale
(Las Vegas, NV; May 14, 2009) - Henry Neth, a former Nye County commissioner, was arrested at his Pahrump home today and charged with five counts of securities fraud and one count of embezzlement in connection with a land sale scheme. Investigators with the office of Secretary of State Ross Miller say Neth, and his partner Eric Frye took investors’ money for the purpose of buying land under the company name of Stockton Jane, LLC, then diverted the money for personal use and to buy land in their own names. Frye, who lives in Arizona, is facing one count of embezzlement.
Investigators say the two raised approximately $2.4 million dollars from investors in Nevada, Arizona, and California by telling them that the money would be used to purchase 252 acres of land under the company name Stockton Jane, LLC. Neth told investors they would receive annual returns of more than 123%. Neth and Frye, however, used the invested money to purchase the land in their own personal names and then diverted the remaining funds to a separate company in which they had an ownership interest and for other personal uses.
“This appears to be a case in which investors thought they would be getting an unheard of return, perhaps because the suspect had held elected office in the community,” said Secretary of State Ross Miller. “The prospect of a 123% return certainly falls under the category of ‘too good to be true,’ but the fact that it’s being offered by a former elected official might add credibility for some investors. It should serve as further warning that dealing with unlicensed brokers or dealers, or unregistered securities is virtually always a losing proposition for the investors. As with all of these cases, I have to repeat that a visit to the Secretary of State website, www.nvsos.gov, provides access to a number of resources for checking the licensing and background of security dealers in Nevada.”
Anyone who believes they may be the victim of a fraudulent investment scheme, should contact the Secretary of State’s office at (702) 486-2440, or (775) 688-1855. As in all criminal matters, the office maintains that the allegations are merely accusations and individuals are presumed to be innocent until proven guilty in a court of law.
For more information on how to choose an investment professional, go directly to http://www.nvsos.gov/securities/investors/publications/knowyourbroker.asp , or follow the Securities Center “investor education” links at www.nvsos.gov .