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SEC Shuts Down Alleged Scam Targeting Christians

It began with a small Baptist Church in East Texas.  According to the U.S. Securities and Exchange Commission (SEC), Paul D. Poetter sold members of that church ”trust certificates” that investors could purportedly exchange for “common shares” of a publicly traded-company called 4309, Inc., a public shell company controlled by Poetter. “Later, Poetter allegedly told investors [...]

It began with a small Baptist Church in East Texas.  According to the U.S. Securities and Exchange Commission (SEC), Paul D. Poetter sold members of that church ”trust certificates” that investors could purportedly exchange for “common shares” of a publicly traded-company called 4309, Inc., a public shell company controlled by Poetter. “Later, Poetter allegedly told investors they would receive shares of AMs-TEC Acquisitions (“AMs-TEC”), a purported Arizona entity that Poetter claimed had a “projected value of $13.5 billion” and was qualified to trade on a European stock exchange.”


In “shareholder newsletters” mailed to investors, Poetter encouraged investors to solicit investments from family members and friends. Poetter allegedly misrepresented to investors that AMs-TEC and its affiliated entities were in the process of acquiring, or had acquired, several valuable assets or companies. For example, Poetter touted AMs-TEC’s acquisition of an African cocoa processing plant with negotiated contracts to process over $120 million worth of cocoa. However, Poetter never acquired the cocoa plant and there were no outstanding orders to process cocoa. It is also alleged that Poetter misappropriated and misapplied investor funds by transferring millions of dollars to various affiliated entities which were used to fund various administrative and employment-related expenses, including at least $300,000 paid to Poetter.

The complaint also named as defendants three of Poetter’s affliated entities, 4309 Inc., 4309 Acquistion Trust, and AMs-TEC Acquisition Trust, as well as four entities named as relief defendants, AMs-TEC Commodities, Inc., AMs-TEC Energy, Corp., Greener Cleaner Farms, Inc., and RoboCargo Corporation.

Poetter ultimately raised more than $5.2 million from more than 2300 investors nationwide.  But the damage goes beyond the financial losses.  People have lost not just money, but also friendships and maybe even their faith.  Please, never invest in anything sold by appeal to your faith or the supposed faith of the person offering the investment.  Remember that while a life-long friend may be utterly convinced that the investment he tells you about is legitimate, unless he has SEC experience it is just as likely that he has been duped by a cleverly-disguised scam.

Care enough about your church, your friends, and your nest egg to hire a professional investor protection company to do a pre-investment investigation.  You might save not just yourself, but also many others.

 

23 Responses to “SEC Shuts Down Alleged Scam Targeting Christians”

  1. scastillo says:

    Poetter should be punished by doing time in jail and not just fined. He defrauded honest working people out of there money and possibly there life’s earnings as well. Using religion as a base to defraud is despicable. He obviously has no morals and light sentenceing would only seem like a slap on the wrist. If this was the old west he would be hung. Well, maybe he should. He defrauded alot of people in an East Texas town known as the oldest town in Texas, Nacogdoches. Don’t they hang people there, still. They should!!!

  2. Hi, scastillo:

    Thanks for the post. A criminal prosecution might not be far behind.

    Fraud against people of faith is epidemic. People drop their defenses when they believe they are talking to another person of faith. For scam artists, taking money from Christians is like taking candy from a baby.

    Stay tuned. We’ll post again if there are any other developments.

    Peace,

    Pat

  3. Jeremy says:

    I, my family members, and many friends of mine are shareholders. Many of us are involved in ministries or are missionaries. This entire thing is false. The SEC has been threatening people, using scare-tactics… we’re talking shareholders who disagree with them, not just employees. They did an investigation a year ago and cleared the company of anything wrong. Many of the claims they have made against Paul have since been found (by them) to have been false, and they have yet to rectify their facts. Paul is a good and honest man, and a sincere Christian.

  4. Jeremy says:

    Moreover, they have put Paul on a gag order, so he can’t even tell the shareholders what’s going on. The SEC also has yet to notify ANY of the shareholders that the investigation is even under way, other than the posting of their website citing all the allegations. They claim they are acting on behalf of the shareholders, but what they are planning on doing with the company’s assets is essentially auction them all off, then take a currently undeclared amount from that to pay their own expenses in the investigation, and then presumeably pay back the shareholders what’s left of their investment, even though the company was about to actually go public.

  5. Hi, Jeremy:

    I checked the docket for the SEC case. Poetter has consented to an Order enjoining him from violating the anti-fraud provisions of the securities laws, requiring him to disgorge more than $5.2 million, and pay a civil penalty of $150,000. It is hard to imagine how a successful operation, operating properly, would agree to such an Order. Of course, an Order requiring him to pay that money back does not mean that he has the money to do so. So folks should not get their hopes up.

    As far as the SEC threatening people, that is very hard to believe. Please have the folks who’ve been threatened post a comment here giving the details of the threat.

    I have talked to hundreds of fraud victims and worked to help thousands recover. It is not at all unusual for the investors to disbelieve the SEC’s allegations and to even be hostile to the staff. The SEC is bringing very bad news, and the first reaction to very bad news is always denial.

    The SEC does not go off half-cocked. They must present admissible evidence to the Court in order to get the temporary restraining order. If they do not get that evidence, they do not commence the action. They never shoot first and ask questions later. Their processes and procedures do not allow for it. Their case against every defendant is poured over by many layers of management, including the Commissioners of the SEC, and, finally, by a federal judge. If the defendants deny the charges, they can take the case to trial and contest them. That’s why we have courts.

    I am sorry that you and you family were caught up in this. It is very painful, I know. Blessings on you and yours.

    Peace,

    Pat

  6. Rick Styles says:

    Pat, thank you for your website and for your thoughtful comments. I believe that while your comments are true and the fact that Paul signed a neither admit nor deny basis document doesn’t mean he or anyone else are guilty however that’s what we want to assume. How often do we hear of decisions being made in the legal arena that is based only on what is the least amount that this will cost me in both time (the time it takes to fight something) and the money it will cost to pay for Attorneys. The filing that I read alleged that Poetter began his scheme in June 2007 by convincing a few members of a small Baptist church in East Texas to invest. Pat, there where people from this church that got in touch with Poetter because of other business dealings they had been in. They trusted Poetter because of there past history not as some have alleged by saying Potter picked this gullible church to pray on. Even there pastor, Mr. Murray said in an article “It wasn’t like they chose this area and came in here and said, “Here’s some people we’re going to take advantage of and start this business here.” That’s not the case, whatsoever, Murray said. “These are just allegations that have been brought against Mr. Poetter. I don’t really know anything about the case, so it would be a strong statement to make that I thought he took advantage of somebody. I don’t feel that at all. I think his intentions were good, and I think they still are good.” He, the pastor went on to say “ that to the best of his knowledge, when Poetter first approached his church members, he already had a base of earlier investors and defended him as an honest business man. Pat, in all the reports that I have read they talk about all the millions of dollars Poetter transferred to various affiliated entities and used the monies to fund various administrative and employment-related expenses, including at least $300,000.00 paid to Poetter. I haven’t read anywhere in any report that tells where this money went and is $300, 000.00 paid to Potter for the job he was doing for the 3 years really a lot of money. With the work being done by the different companies including the R&D from engineers, accountants, attorneys office staff, cost of travel in the states and abroad for the last 3 years, it just doesn’t seem to me that they where all that extravagant. The last and maybe the most important thing is that Poetter told people to pray about there decision, we have reached a sad place when someone ask us to seek an answer by praying before we make a decision on something and that is considered being taken advantage of. This is where we are to go, to Him who will guide and direct. Does this mean that we always hear correctly? The answer is NO, but also the answer is YES. I can’t tell you how many people have testimonies of how God answered their prayer as to whether or not they should do this or not. Many believe this is a spiritual battle being waged in opposition to what could be accomplish by this fund if it is allowed to work its course. Pat what if Poetter is an honest man with the desire to create a company that will help reduce the dependence on foreign oil to help build a business that reduces are carbon foot print and that in someway creates jobs for people here in the USA and reduces outsourcing to countries like China, What if Poetter was a man that loves his country and loves the men and woman that serve in the armed forces and wants to make this a better place for them and the next generation coming up after us. What if Potter was a family man that served in his church, his wife and daughter worked the church with mentally handy caped children and Potter at the age of 56 had no prior run in with the law and SEC or any other organization. Why would Potter include his family in a scam that would effect all of his family for just 5.2million dollars? This man doesn’t fit the mold, he doesn’t live high off the hog as they say in Texas. He doesn’t have the fancy cars or houses or anything else that we read about in the news or that some of the article would imply by assuming that he did something with all this money. I, as a Christian could have made a bad mistake however my wife and I prayed about it and have had many answers to prayer about this and have heard the stories from many others that feel the same. Why just close it down? Why not allow a new appointment to head it up through the investigation so the company can continue working? How can it begin to succeed when all resource and contact is stopped. Just makes no since to me. Thank you Pat for allowing me to carry on, this is not the man you think he is. You have made a decision and drawn your conclusion based on what you read and that is wrong. Try to get to know the man, he is far more then these allegation give him credit for.

  7. Dear, Rick:

    Many thanks for your observations. You bring up a phenomenon that I should write more about. Not all people who run afoul of the securities laws are professional con men. That is why investing is such a minefield. Some start out with the best of intentions, but are overmatched from the start. They believe that there is very little to it, that anybody can do it, and/or they take at face value what someone else has told them. They do not get an independent investigation and wind up neck deep in a scheme that violates the securities laws. That they did not intend to launch into something that robs hundreds of their retirement savings does not change the fact that people who have saved for decades are now without the resources to care for themselves in retirement. Whether it’s a professional con man or someone who has a big dream but lacks the expertise or knowledge to pull it off in a legal way, the money is just as gone.

    The answer to the question, why close it down, is that it is not what it was represented to be. There likely is no profit-generating mechanism. If there were, there would be plenty of money to defend against the SEC’s allegations, right? No matter what you hear from others, the SEC is the good guy here and you will wind up better off (although still suffering) than if the SEC had allowed it continue. I speak from many years of experience here.

    As a believer, I am constantly reminding people that Jesus told us to be as “shrewd as serpents” when he also told us to be as “innocent as doves.” He also drove the money changers out of the temple. It is completely inappropriate and unBiblical to appeal to someone’s faith in God in connection with an investment pitch. Investments involve treasures on earth. Sure, people dream about what they will do with their windfall, and that may include giving a bunch to the church or charity. But people buy lottery tickets with the same thought in mind. Our hope lies beyond this world, and material wealth is a hindrance, not a help. God will care for those who have lost their savings to this scheme. They will learn, better than most, that the things of this world are transitory.

    When we hear someone’s story about how Jesus has redeemed them, we drop our guard. But, you cannot see into someone’s heart. As good a judge of character as you may think you are, you cannot know whether their story is genuine. Even if it is, you know one thing for certain: They are a sinner who fails to conform to the image of Christ, just like you and me. The best approach is always to run from someone who mixes faith and material wealth.

    I cannot see into Mr. Poetter’s heart. But I can see the result of his conduct. It is that result that I try to protect people from, no matter the original intent of the person behind the investment.

    Peace,

    Pat

  8. Rick says:

    Pat, thank you for your responce, there is much to take in and to think about. I trust Mr. Poetter and the things that they say about him don’t line up. That being said I also know where things are heading and it doesn’t look good. I wish some things would be easyer than they are. When ever you trust someone, you always take a risk, Time will tell if this was a good risk. I do want to thank though for your words of wisdom at this point you make it hard to argue with anything you’ve said.

    May the Lord bless you, keep you, make His face shine on you, be gracious to you, lift up His countenance on you, and ~ give you His peace,

    Rick

  9. Joey says:

    The worst part of this, is I am from East Texas, a hard working Christian family man, and he took the means in which to pay for my family right out of my hands. The only good part, is that the Big Man will take care of him. If I were not the God fearing man I am now I would take care of this so called man myself. I hope and I pray that anyone that has lost any amount of investment, will be OK. So regardless of amount and financial situation, remember, all we need do is place this in HIS HANDS and be done with it. I do, however believr that Poetter needs be dealt with criminally as far as our Constitution and Criminal sytem allows. I quess the worst part is the good kind hearts of the East Texas Christians will be stricken again, but I assure you we are not down. Look up, Praise Him, and God Bless!!!!!

  10. Amen, Brother Joey. Blessings on you and yours.

    Peace,

    Pat

  11. Patricia says:

    I feel like a dumb stupid Christian. Oh yes I do. I don’t care what happens to Mr. Poetter in his afterlife I am more concerned with jail time for this jailbird. About the only thing that I am happy about is that this money wasn’t scammed to fund Al Queda….and that’s not saying much. We have been taken, bamboozled…..from a bible thumping snake oil salesman. We apparently never learn.

  12. J~ says:

    All concerned,

    I think we investors need to get together and find out what REALLY is going on. The best way I know how to do this is to bring it out into the public… get it on the NEWS channels and/or radio. I believe divide and conquer is the intent here. We must unite in order to resolve this.

  13. mo says:

    I have heard recently that Poetter is still working on getting this allegations resolved…I guess we’ll see! Patience is a virtue!

  14. People have lost not just money, but also friendships and maybe even their faith.

  15. Nat says:

    My family fell into his trap and gave our savings to AMs-TEC/Paul Poetter. Now our family is in financial hard ship after I got laid off from work in February. Wishing we had our savings, which was swindled away into Paul’s pocket, would surely help in our time of need. We just want our money back and for Paul to get what he deserves for doing this to such good innocent Christians.

  16. Anonymous says:

    Pat, thank you for your website and for your thoughtful comments. I believe that while your comments are true and the fact that Paul signed a neither admit nor deny basis document doesn’t mean he or anyone else are guilty however that’s what we want to assume. How often do we hear of decisions being made in the legal arena that is based only on what is the least amount that this will cost me in both time (the time it takes to fight something) and the money it will cost to pay for Attorneys. The filing that I read alleged that Poetter began his scheme in June 2007 by convincing a few members of a small Baptist church in East Texas to invest. Pat, there where people from this church that got in touch with Poetter because of other business dealings they had been in. They trusted Poetter because of there past history not as some have alleged by saying Potter picked this gullible church to pray on. Even there pastor, Mr. Murray said in an article “It wasn’t like they chose this area and came in here and said, “Here’s some people we’re going to take advantage of and start this business here.” That’s not the case, whatsoever, Murray said. “These are just allegations that have been brought against Mr. Poetter. I don’t really know anything about the case, so it would be a strong statement to make that I thought he took advantage of somebody. I don’t feel that at all. I think his intentions were good, and I think they still are good.” He, the pastor went on to say “ that to the best of his knowledge, when Poetter first approached his church members, he already had a base of earlier investors and defended him as an honest business man. Pat, in all the reports that I have read they talk about all the millions of dollars Poetter transferred to various affiliated entities and used the monies to fund various administrative and employment-related expenses, including at least $300,000.00 paid to Poetter. I haven’t read anywhere in any report that tells where this money went and is $300, 000.00 paid to Potter for the job he was doing for the 3 years really a lot of money. With the work being done by the different companies including the R&D from engineers, accountants, attorneys office staff, cost of travel in the states and abroad for the last 3 years, it just doesn’t seem to me that they where all that extravagant. The last and maybe the most important thing is that Poetter told people to pray about there decision, we have reached a sad place when someone ask us to seek an answer by praying before we make a decision on something and that is considered being taken advantage of. This is where we are to go, to Him who will guide and direct. Does this mean that we always hear correctly? The answer is NO, but also the answer is YES. I can’t tell you how many people have testimonies of how God answered their prayer as to whether or not they should do this or not. Many believe this is a spiritual battle being waged in opposition to what could be accomplish by this fund if it is allowed to work its course. Pat what if Poetter is an honest man with the desire to create a company that will help reduce the dependence on foreign oil to help build a business that reduces are carbon foot print and that in someway creates jobs for people here in the USA and reduces outsourcing to countries like China, What if Poetter was a man that loves his country and loves the men and woman that serve in the armed forces and wants to make this a better place for them and the next generation coming up after us. What if Potter was a family man that served in his church, his wife and daughter worked the church with mentally handy caped children and Potter at the age of 56 had no prior run in with the law and SEC or any other organization. Why would Potter include his family in a scam that would effect all of his family for just 5.2million dollars? This man doesn’t fit the mold, he doesn’t live high off the hog as they say in Texas. He doesn’t have the fancy cars or houses or anything else that we read about in the news or that some of the article would imply by assuming that he did something with all this money. I, as a Christian could have made a bad mistake however my wife and I prayed about it and have had many answers to prayer about this and have heard the stories from many others that feel the same. Why just close it down? Why not allow a new appointment to head it up through the investigation so the company can continue working? How can it begin to succeed when all resource and contact is stopped. Just makes no since to me. Thank you Pat for allowing me to carry on, this is not the man you think he is. You have made a decision and drawn your conclusion based on what you read and that is wrong. Try to get to know the man, he is far more then these allegation give him credit for.

  17. IW Dog says:

    Dear Anonymous:

    Thanks for the post. The SEC’s complaint alleged the following:

    “Poetter touted AMs-TEC’s acquisition of an African cocoa processing plant with negotiated contracts to process over $120 million worth of cocoa. However, Poetter never acquired the cocoa plant and there were no outstanding orders to process cocoa.”

    While people really ought to get a thorough pre-investment investigation of any opportunity like this (many do. that’s my business), they deserve none of the blame for falling victim to an investment scam. If the defendant had given them good information and disclosed any uncertainties involved in the investment, perhaps it would be appropriate to say that they got what they bargained for. But the core of all investment scams is the passing along of false or misleading information. I have a hard time blaming anyone who invests based on bad information. How can we say they understood what they were getting when they were lied to about the investment?

    I do not know Mr. Poetter, but I know he is human, prone to the mistakes that all humans make. Some mistakes hurt others in ways that have tragic consequences. Those who work in the investment business have a duty to understand that their mistakes, whether intentional or negligent, can mean the difference between a comfortable retirement and a Medicaid nursing home for investors, and a duty to verify the representations they intend to make to investors. They cannot simply rely on what they hear from others, look at a few spreadsheets, take the nest eggs of hundreds of people, and “hope for the best.”

    I pray that the investors will not blame themselves, but will instead spread the word about how easy it is to lose what they worked so hard to earn and save.

  18. Matt says:

    Is this still an ongoing thing I invested in this “company” and have not heard anything about this since it all started I would just like my money back and to know the truth

  19. JD says:

    Where’s the latest information on this??? I invested in ths “company” and havnt heard anything since the excrement hit the air diversion blades. I realize that some invested more than others, but weather its $1,000 or $100,000 it’s still $ that our families could have put to use for something legitimate. So far its been an unanswered question for 2 yrs and I’d like to have the money back and know the truth.

  20. Jeff says:

    I, too, invested money in Mr. Poetter’s company, because of the opportunity afforded me through a church friend, who heard it from another Christian friend. I’m over it, and hold no offense toward Mr. Poetter. Sure, I’d love to have my money back, but harboring anger and unforgiveness toward any man would only hurt me, so I choose not to dwell on it. God knew my heart and I had prayed about what to do. I thought I heard God say go for it, but maybe I didn’t hear right. I’ll listen closer next time.

  21. IW Dog says:

    Thank you for the continued comments. The latest information from the Court-appointed receiver is that he has traced $1 million to a bank account in Africa under the control of Emmanuel Akoko. A warrant has been issued for Akoko’s arrest, but his whereabouts are unknown. The Receiver is Kelly M. Crawford. He works at the Dallas law firm Scheef & Stone LLP. His phone number is 214-706-4200. He’s in the best position to answer questions about whether there will be any distribution to investors.

    Peace,

    Pat

  22. Micheal Hailey says:

    Hi all,

    In early 2009 I was new to investing and I got the ‘hot-tip’ from a friend about this entity. I happily dumped about half of my net worth into something I didn’t do the homework on — I simply took my friends word for it.

    I deserved to lose money and I did. This scheme was an expensive and necessary lesson.

    I invested $6,000 with the company and receieved a check in August of 2011 from the receiver for $444. About a 92% loss.

    If you lost money in this scam and have not received the distribution, please contact phone number in the above posts at Scheef and Stone LLP.

  23. IW Dog says:

    Dear Michael:

    Thanks for the comment. Please read The Vigilant Investor. I wrote that book to protect investors from these and other types of scams. Obviously, the recommendation is self-serving, but the reviewers have praised it. The Wall Street Journal calls it a “fascinating and valuable read.” With your experience and what you can learn from the book you can be a powerful force for good on a dangerous investment landscape.

    Peace,

    Pat

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