Office of Maryland Attorney General J. Joseph Curran, Jr.

January 29, 2001 Media Inquiries: Sean Caine 410-576-6357


Baltimore -Attorney General J. Joseph Curran, Jr., announced today that his office's Securities Division obtained a permanent injunction against a 22 year old Potomac man and his Bethesda based companies. The Securities Division's complaint filed in February, 2000, alleged that approximately 100 investors participated in John St. Augustine McDonald's investment program with Thornapple Capital and Many investors learned of McDonald's program through friends and family whom they trusted. Curran alleged that investors thought they were putting their money into Thornapple Capital limited partnerships so that McDonald could trade in stocks and options on their account, and into an internet food delivery service that McDonald said he was starting. In fact, according to the complaint, defendants operated a Ponzi scheme and used investor money for personal expenses such as limousines and trips, gifts to friends and payments to family members.

According to the court order entered today, the Securities Division's records show that John St. Augustine McDonald's companies, Thornapple Capital and, sold unregistered securities and engaged in a course of business that operated as a fraud on investors. McDonald and his companies are permanently enjoined from engaging in the securities or investment advisory business in Maryland. The court retained jurisdiction to determine the amount of restitution that McDonald must pay investors in light of any restitution that may be ordered in any related criminal proceeding. The court also retained jurisdiction to allow the Commissioner, acting as a receiver, to recover assets for the benefit of investors and other creditors of defendants.

"This case is a good example of why investors should be cautious about all investments," Curran said. "Con artists use all kinds of tactics, including capitalizing on social and cultural similarities, to separate unsuspecting investors from their money." Curran reminded investors to call the Securities Division at 410-576-6360 before they invest to find out whether their investment adviser, broker and securities are registered. Even when an investment program looks reasonable, and friends and family trust the promoter, it's better to take a few minutes to verify the status of the promoters.