Two financial services companies are being investigated by the Greensboro Police Department's fraud squad.
One company, DD&P Financial Planning Services, was recently evicted from its Ashewood Court office, said Michael J. Conwell, a detective with the Greensboro Police Department.In that case, security violation charges are pending against David Anthony Porter, 24, of 268-C Webster Road. Porter has been charged with two counts of obtaining property by false pretense for writing bad checks of more than $1,000 to pay for business expenses, Conwell said. Efforts to reach Porter Tuesday were unsuccessful.
The other company, A.D. Chafins Financial Services Corp., still is taking phone calls, but its owner, Allan Dale Chafins, declined to say whether the company is doing business.
Chafins, 28, of 2602 Fairway Drive has been charged with one count each of failure to register as a financial adviser and for fraudulent sale of securities, Conwell said.
Chafins declined to comment on the case Tuesday, but he told a reporter in December that he was specializing in handling retirement plans for college professors at N.C. A&T State University and at Guilford College.
Officials are unsure how many people invested funds with the companies and ask that people with complaints call Conwell.
The two firms are among many across the state under investigation for operating without a license and for securities fraud, Conwell said.
Gene Cella, enforcement attorney of the securities division for the secretary of state's office in Raleigh, said the department's five investigators are probing 334 businesses for fraud.
Complaints to the office increased from 578 in 1988 to 2,135 in 1989, partly because the public has learned where to send complaints, Cella said.
``There's a little bit of greed in everybody,' Secretary of State Rufus Edmisten said. ``When someone makes a pitch, you become very gullible. If it sounds too good to be true, it more than likely is too good to be true.'
Since January 1989, financial advisers have been required by law to register with the state. Under the registration process, applicants must pass a test that assesses their abilities.
Anyone can hang up a sign saying he is a financial consultant or broker, however, and unless a customer complains to authorities, no one notices he is operating without a license. Police were alerted to the Greensboro cases by complaints.
``Unless we know who they are, we can't register them,' Edmisten said. ``Those who are going to commit fraud certainly don't want to go around and get a license.'
A bill that would increase the penalty for securities fraud and set up a fund for victims is expected to be voted on during the General Assembly's short session in May, Cella said.
The legislation would make securities fraud and operating without a license 10-year felonies instead of five-year felonies.
Conwell cautioned that Greensboro residents should check to see if firms have a license before doing business with them. He said Greensboro several firms, from roofers to loan brokers, have been investigated for fraud.
``There are 250,000 businesses in Greensboro right now,' Conwell said. ``If people have questions, there are a number of agencies they can check with.'
Those agencies include the Better Business Bureau, the state attorney general's office and the secretary of state's office.