Attorney General Settles with Maryland Company
Making Payday Loans
Recovers More Than $3.2 Million; Company Operated as a Ponzi Scheme
BALTIMORE, MD (December
13, 2007) - Attorney General Douglas F. Gansler announced today
that the Securities Commissioner has reached
a settlement with First Cash Express, Inc. and its owner Alvin
Ambrose. The Commissioner found that First Cash Express and Ambrose
violated the antifraud provisions of the Maryland Securities Act
by misrepresenting the company’s history and legal status,
and failing to explain the risks associated with an investment
in First Cash Express, Inc. and that it had no operating profits.
A copy of the Consent Order is available on the Attorney General’s
website, at http://www.oag.state.md.us/Securities/Actions/index.htm.
“The Securities Division’s investigation and enforcement
action protected the investors’ assets,” said Attorney
General Gansler, “While this action will lead to a substantial
recovery of investors’ funds, it is critical that investors
understand the risks they face when they invest with insufficient
First Cash Express advertised its investment program over the
internet and by word of mouth. The company raised more than $5
million from about 180 investors and promised to pay investors
15% interest every month from profits it claimed to earn on loans
made at high interest rates. In fact, First Cash Express lent only
about $260,000 to payday borrowers who repaid approximately $135,179.
The approximately $800,000 in interest that First Cash Express
paid its investors was almost entirely funded with money from new
investors rather than interest earned from the payday loan program.
As part of the settlement, First Cash Express turned over to the
Office of the Attorney General approximately $3,279,544 and Ambrose
promised to turn over any future profits from the sale of real
estate that he owns. All funds will be distributed to investors,
taking into account any interest and other payments that investors
may have received.
Attorney General Gansler
reminds investors that interest payments made to earlier investors
are not a sign of a viable investment
program. Investors can contact the Securities Division of the Attorney
General’s Office at 410-576-6360 if they have questions concerning
investment promoters and the investment opportunities they offer.
Gansler also cautions potential investors to thoroughly check out
any securities professionals with whom they are considering investing,
including securities broker-dealers, agents, investment advisors,
investment advisor representatives, financial planners, the registration
status of securities, and to report suspected fraud.