Georgia Man Arrested on Securities Fraud Charges for Allegedly Bilking Newton County Woman of Retirement Savings

ATLANTA…Secretary of State Cathy Cox today announced the arrest of a Georgia man charged with securities fraud for bilking $100,000 from a senior citizen in Newton County. 

Robert Smith, 58, of Atlanta, was arrested this week on a “no bond” warrant and is housed in the Newton County Jail awaiting a bond hearing.  The grand jury handed down a ten count indictment for violations of the Georgia Securities Act and theft.  The charges relate to the sale of unregistered investments sold to the Newton County resident between 1997 and 2002. 

The victim gave her entire retirement package of $100,000 to Smith for safe investments that would generate enough monthly income to pay for her medications.  She contacted Smith after she received a flyer from his company, Capital Brokerage, Inc. d/b/a The Capital Companies, offering investment returns of 9%.  The victim was told the investment was safe and that she would earn at least 9% interest yearly - sometimes more, but never less.  After five years of receiving checks regularly, the monthly payments stopped in 2002. 

The case against Smith was opened in 2002 by the Secretary of State Securities Division as part of a larger investment fraud investigation into the unregistered sale of promissory notes by McCarn’s Allstate Finance Corp, a company that is now bankrupt.  At least 100 Georgia victims contributed more than $7 million in exchange for promissory notes from McCarn’s.  The Tampa-based company was supposed to use the money to finance high-interest car loans that would provide investors a 9% return in nine months.  Smith was a sales agent for McCarn’s Allstate when he came to the attention of state regulators.  Investors later learned that the investment offerings were not registered with the Secretary of State’s Securities Division pursuant to the Georgia Securities Act of 1973.  Smith, like other McCarn’s sales agents, allegedly omitted to disclose material facts and made untrue statements to McCarn’s investors.

“I applaud our investigators and Newton County District Attorney Ken Wynne for their efforts in securing an indictment in this case ensuring Mr. Smith will face the charges against him,” said Secretary of State Cathy Cox.