HELENA, Mont. – Commissioner of Securities and Insurance Monica J. Lindeen today announced that Terry Parks was found guilty on three counts of investment fraud in Missoula County District Court. Parks, a former Missoula resident, sold $55,000 worth of phony investments under the guise of helping victims of Hurricane Katrina.
“This case shows the great lengths con-artists will go to sell hard-working, honest Montanans on a raw deal,” said Lindeen. “To predators like Terry Parks, even a heart-wrenching natural disaster like Hurricane Katrina is just another tool to swindle investors out of their life savings. The jury’s verdict in this case should send a clear message that my office won’t let con-artists like Parks rip off Montanans and run away scot-free.”
In 2007, Parks ran an advertisement under the investments section of the Missoulian classifieds, offering securities in the form of promissory notes. In the ad, he claimed the notes were well-secured and paid 24 percent annual returns. Parks also told investors the money he raised would be used to help rebuild areas devastated by Hurricane Katrina.
One victim from Plains, Mont., responded to Parks’ ad and invested $55,000 in the notes. Over the course of several months, Parks encouraged the victim to send more money and even offered to pay him $100 for each new investor he could send Parks’ way. The victim began to worry about his investment because he wasn’t receiving the promised interest and asked Parks for his money back.
Parks, who had since moved to Texas, refused to return the victim’s money. It was later determined that the notes were not secured as promised in the advertisement. The victim filed complaints against Parks with Lindeen’s office and the Missoula County Attorney.
The verdict follows a two-day jury trial in District Court Judge Karen Townsend’s courtroom. Parks was charged with three counts, including failure to provide investors with disclosure information regarding investments he was offering and selling in Tower Trust Two “Business Purpose Notes,” failure to inform investors that the notes were not registered in Montana, and failure to inform investors that he was not registered in Montana to sell investments.
Jesse Laslovich, Chief Legal Counsel for the Commissioner’s office, prosecuted the case as a Special Deputy Missoula County Attorney. Parks faces a possible sentence of up to 30 years in prison, $15,000 in fines, and court-ordered restitution for his victim. Parks’ sentencing hearing is scheduled for October 25.
Parks’ victim from Plains could be the first investor in Montana to access the state’s new Securities Restitution Fund if Parks is unable to pay restitution.
“We worked hard with legislators last session to set up a last-resort restitution fund for victims of investment fraud,” said Lindeen. “Our goal was to help victims who may never get their money back from perpetrators. Because Parks wasn’t a licensed broker and there was no investment firm backing him, the restitution fund might be the only way his victim can get back a portion of what was lost.”
For more information on the Parks case, Montana’s Securities Restitution Fund, or if you suspect investment fraud, visit www.csi.mt.gov or call the Commissioner’s office at 1-800-332-6148.