Holly Saelens, the interim director of the Ohio Department of Insurance (ODI), has notified Powell securities dealer Vernon W. Shiflett and associate Paul L. Edwards, an insurance agent from Marion, of the Department’s intent to revoke their licenses on charges related to the alleged sale of fraudulent investments.
Shiflett was indicted last week by a Licking County grand jury on 35 felony counts related to the allegedly fraudulent sale of promissory notes, following similar charges earlier in the year. He signed an agreed permanent injunction with the Ohio Department of Commerce, Division of Securities in late November prohibiting him from selling certain types of securities.
Edwards allegedly also conspired with Shiflett in running fraudulent promissory note and partnership schemes though 22 Columbus-based investment companies and bilking investors nationwide out of $29 million. The ODI has alleged that both Shiflett and Edwards violated Ohio insurance law “by soliciting investors, some of whom were previous insurance clients, to invest in non-insurance products such as limited-liability partnerships and promissory notes purportedly used to raise funds for several concert promotion companies.,”
“Allegedly, the money from at least 12 of Edwards’ customers totaling more than $186,000 was never invested and instead, individual investments ranging from $10,000 to $30,000 were diverted to Shiflett,” it continued.
The investments, made through various entertainment companies, were purportedly backed by as many as three offshore insurers, none of which are licensed to conduct business in the state of Ohio. The ODI has alleged that Edwards did not conduct due diligence that would have revealed that the insurers were not licensed in Ohio, and failed to protect his clients’ best interests.
“Shiflett and Edwards may request a public hearing within 30 days to contest their respective proposed license revocations. If neither agent requests a hearing in a timely manner, the director of insurance will issue orders revoking each agent’s license.
A Department investigation into the actions of additional Ohio insurance agents who allegedly participated in Shiflett’s scheme is ongoing,” the bulletin concluded.
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