BAMBERG — The South Carolina Attorney General’s Office says it wants Bamberg County Administrator Joey Preston to give back the million or more it alleges he made off a silver-buying Ponzi scheme.
In a complaint filed Oct. 23, the state’s Securities Commissioner alleges that Preston violated the S.C. Uniform Securities Act through his connection with the long-running scheme in the Easley area.
The state doesn’t claim Preston knew it was a Ponzi scheme, but that he helped bring in investors without being properly registered and checking the investment as he should have.
“The state has filed a complaint against Joey Preston. It seeks to permanently bar him from ever conducting securities business in South Carolina, seeks a fine of $10,000 per violation. And the complaint lists three causes of action, but that doesn’t mean the fine could be a total of $30,000. There could be multiple victims per cause of action if a judge upholds it,” said Mark Powell, communications director for the state Attorney General’s Office.
“Basically, he has to forfeit his ill-gotten gain, and he has to give up the money he’s got from his transactions. We are waiting for his attorneys to respond. They are seeking an extension of the time needed to request a hearing,” Powell said.
Preston said, “I think that’s pretty common and pretty standard. It’s a civil issue, and we’re just dealing with them one at a time.” He is being represented by Joseph “Pete” Strom Jr., managing partner at Columbia-based Strom Law Firm LLC.
Preston is also in the middle of a legal battle with Anderson County over the $1.1 million severance package he received when he left.
At the center of the Ponzi scheme was Atlantic Bullion & Coin Co. Inc., a corporation controlled by former Anderson County Councilman Ron Wilson.
Wilson has been sentenced to 19-1/2 years in prison for the scheme, in which he told people he was buying them silver to be held in a Delaware depository, according to the Anderson Independent-Mail. He did not buy silver for most of his clients and lost a total of $57.4 million belonging to nearly 800 investors.
The state’s complaint claims Preston held “silver parties” at his home for Wilson, where guests received a seminar on silver investment. He also allegedly touted the investment publicly, and solicited investments without doing due diligence on the investment being offered.
Between March 2010 to March 2012, Preston received between $1,250,000 and $4 million in cash as well as credits of what he believed represented “interests in real silver in the amount of approximately $1,200,000,” the complaint alleges. It also states he did not disclose his commission to at least one investor.
It further stated that Preston’s personal investment in the scheme was less than $200,000.
Preston has said he was simply an investor who lost money to Wilson.
The complaint also alleges that Preston made false and misleading statements to investors in an effort to secure additional investments and induced one or more investors to purchase AB&C’s securities by offering “worthless personal guarantees” of one or more investors’ principal.
The state’s complaint alleges that Preston, acting in concert with Wilson and AB&C, sold securities which were not registered under the S.C. Uniform Securities Act. It further alleges that Preston transacted securities business in the state without being registered.
The complaint also claims that Preston failed to tell investors that the securities offered for sale were being sold under violation of the S.C. Uniform Securities Act and that he was not registered to sell them.
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