Wednesday, September 23, 2009

St. Louis Mother, Son Accused of Misleading Investors; Spent Money on Cosmetics, Clothes

Posted By on Wed, Sep 23, 2009 at 11:52 AM

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Secretary of State Robin Carnahan today announced officials in her office issued a Cease and Desist Order against a St. Louis pair, Armod L. Hinkle and his mother, Gina M. Hinkle, for selling unregistered investments and spending $178,000 of their investors' money on personal expenses.

In 2006, the Hinkles formed a business, Direcutec, LLC, to develop, market, and sell personal digital assistants and software products to law enforcement, health care, and restaurant services industries. According to the order, the Hinkles sold membership units in Direcutec to at least 14 investors by promising returns of up to $3 million on a $10,000 investment.

The Hinkles allegedly raised more than $315,000, but did not use the money to start the business. Instead, most of the money was spent on mortgage payments, cosmetics, personal insurance, and cash withdrawals.

Additionally, a credit card under the company's name racked up $21,000 in charges at restaurants, groceries and clothing stores.
 
"Investors should be extremely cautious if promised unusually high returns," Carnahan said. "Before you invest, one call to the Investor Protection Hotline 1-800-721-7996) can help protect your savings."

According to the order, no sales were made by the Hinkles related to the development and marketing of personal digital assistants and software. Missouri Securities Division records indicate that neither the Hinkles nor the membership units they were offering were registered with the Secretary of State's office, as required by Missouri law.

Additionally, the Hinkles failed to provide Securities Division investigators with any information showing that steps were taken to purchase inventory, licensing agreements, or client prospects. The Hinkles now have 30 days to respond to the order and request a hearing.

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