Richard Meyer wired $500,000 into an attorney’s escrow account and signed a contract that promised his money would never leave that account. Meyer was guaranteed a 200% return on his investment, which would be wired back into his bank account in 90 days.
More than two years later, he’s still waiting for the money.
“All I’ve gotten is one excuse after another,” said Meyer, an oil-industry retiree from Edmonton, Alberta, Canada.
Meyer is suing John and Marian Morgan, the Sarasota couple accused of running a Ponzi scheme and defrauding more than 100 investors out of about $14 million.
He claims the Morgans never invested his money and used it to pay mortgages.
“They’re in the same category as the men from Enron and (Bernard) Madoff,” he said. “They’re scammers, and they’re very good at it.”
Meyer said a Canadian investigation has revealed the Morgans have employees in various places who find investors for their company, Morgan European Holdings, which is based in Sarasota and Denmark.
One of those suspected Canadian employees, Lloyd Cullham, was on a golf outing with Meyer in June 2007, when Meyer made an offhand comment — he talked about paying too much in taxes.
Culham, a retired dental surgeon, told Meyer that he knew someone who might be able to help cut his tax bill — a man named John Morgan.
But before talking to Morgan, Culham introduced Meyer to Ross Bayne, whom Culham described as “one of the smartest men in Edmonton” and someone who had powerful connections in the financial world.
Neither man mentioned that the Alberta Securities Commission (ASC) was investigating Bayne for making illegal trades and misrepresentations to investors.
A month after meeting Meyer, the ASC ruled that Bayne had performed illegal trades.
According to Meyer’s lawsuit, Bayne and Culham set up a conference call with Morgan who told Meyer that the reason he could offer a 200% return was “because of the high amount of funds being invested and because it was being lent to the World Trade Bank, which, in turn, lends money to other banks.”
Meyer said when he asked Morgan how they picked who invested with Morgan European Holdings, Morgan told him that Bayne and Culham chose people in the Edmonton, Alberta, area, and they decided if an investor was right for the Morgan fund.
They determined that Meyer was “right.” And on June 27, 2007, he wired $500,000 into MEH lawyer Eli Hecksher’s Danish escrow account.
Three months later, Meyer received some great news — his investment had grown to $1.3 million. Culham urged Meyer to rollover the funds. Meyer agreed, but asked for $200,000 of his profit. Meyer said that’s when everyone stopped responding to his e-mails.
“When I requested to get some of my money back, I got no reply at all,” he said.
Meyer later began to receive a series of excuses as to why he couldn’t receive his money, including: the Patriot Act made transaction time longer on international wire transfers; the Morgans’ lawyer was out of town and had no answering service; and the sub-prime mortgage mess resulted in stricter rules.
James Thorlakson, Meyer’s attorney, claims in the lawsuit that the supposed profits never existed and that the rollover was “a further fraud perpetrated by the defendants to avoid detection.”
He also claims that Bayne and Culham received commissions or returns on their own investments for bringing new investors to Morgan.
Meyer said it’s “a huge embarrassment” to publicly admit that he was defrauded. He says he knows people will think he’s dumb, but he said it’s worth taking a little embarrassment to warn others of his experience investing with the Morgans.
Said Meyer: “They’re criminals. They’re crooks. They have no morals. They should be locked up.”
The Morgans, Bayne and Culham could not be reached for comment.
Meyer made reference to the parties the Morgans have hosted for the Florida Winefest the past two years at their $3 million waterfront home — one of three Sarasota properties they own that are valued at more than $1 million.
“They put on like they’re elite and high-society, but they’re just crooks,” he said.
TERMS OF THE DEAL
Before Richard Meyer invested $500,000 with Morgan European Holdings, he signed a contract, which included the following provisions:
•Net yield of 200%, plus the principal invested.
•Points are paid to client when investment is complete.
•Return is projected to be 90 to 120 days from the start of the investment.
•Original loan will be returned to client upon completion of the investment.
•Principal is never put at risk and is held in escrow for the duration of the transaction.
•Funds would be used in a bank-trade program.
•Funds were deposited to dedicated accounts of Morgan European Holdings/Brussels Fund Escrow.
•Expected length of loan is four months with optional rollover every 90 days.
John and Marian Morgan have been ordered to appear July 16 in a federal courtroom in Tampa to face a possible contempt of court charge.
During the Morgans’ initial court hearing June 25 to answer to SEC charges that they have run a Ponzi scheme, Judge Richard Lazzara ordered the couple to stop their investments and deliver an accounting of the money invested with them. They failed to do either to the judge’s satisfaction.
If they fail to show up July 16, a warrant for their arrest will be issued.
The Sarasota Observer will be in the courtroom Thursday. Visit www.YourObserver.com throughout the day for updates.