January 7, 2010 – Richard Elkinson, 76 of Framingham, Massachusetts, was allegedly operating an investment scam out of his home through his company Northeast Sales. The criminal complaint filed by U.S. Attorney, Carmen M. Ortiz’ office claims that Elkinson raised $29 million from 130 investors over the last 20 years. On Tuesday, Elkinson was arrested in Mississippi and will be arraigned in Massachusetts in the near future.
Northeast Sales claimed investor capital was used to broker contracts with a uniform manufacturer in Japan. Many of the victims of the alleged scheme were friends and long time colleagues of Elkinson.
According to the Federal Bureau of Investigation (“FBI”), in 2003 or 2004, Elkinson recruited Jay Fialko and Jeff Ross to work as “finders” to induce more investors. Fialko and Ross were both investors in Northeast Sales since 1997 and the two men operate Ross Fialko Capital Partners in Newton, MA. According to the FBI, the two men raised about $10 million for Northeast Sales and received about $200,000 for their referrals. Ross and Fialko cooperated with the FBI and are not expected to be charged criminally.
Northeast Sales lured investors by offering promissory notes with annual returns of 9 to 13%. The complaint states that Northeast Sales purported to place orders on behalf of purchasers of the uniforms and would receive payments from the purchasers once orders were completed. Apparently, Elkinson claimed that investor funds would be used to put down payments on uniform orders from a Japanese manufacturer that made police uniforms, prison guard uniforms, and other similar uniforms.
The FBI claims that investor funds were actually used to make payments to earlier investors and for Elkinson’s personal use. The FBI also alleges that Elkinson offered investors the opportunity to reinvest their earned interest and principal amounts into new promissory notes once they came due. It appears that Elkinson was an avid gambler and according to the complaint he spent more than $3.7 million in Las Vegas casinos since 1998.
Source: The Metro West Daily News
If you are an Northeast Sales Investor/Victim or the victim of some other type of investment fraud, the Law Offices of Keith L. Miller, and its affiliates, is prepared to review your situation and potential claim(s) without charge, and will consider representing you on a contingent fee basis, which means that you will not have to pay out of pocket for your legal representation. The firm will take a fee only if we are successful in recovering your assets.
If you would like a free confidential initial consultation, please contact this office by calling (617) 523-5803, or click here to send a confidential email.