Jackson Jambalaya

See sidebar on right for a collection of all Steadivest posts.

The Securities and Charities Division of the Secretary of State of Mississippi issued a final Cease and Desist Order against Steadivest on January 5, 2010. Final Order The SOS issued a pending order on November 18, 2009 against the Rankin County "family" of companies. JJ reported on November 24, 2009:


"The State stated Steadivest's presentations to the investors were of a "fraudulent nature" and that the escrow accounts were kept empty as the investors money was used to "prop up" the company instead of the intended purpose for the funds. Steadivest also used funds to prematurely pay off promissory notes held by Jack Harrington, a member of Steadivest.

Steadivest represented to investors the company was purchasing homes for a low price, renovating them, and then flipping them for a profit. The State said the figures used to show how this could make a profit for the company were "engineered solely for the purpose of fraudulently enticing investors." and that there were no profits made on these homes.

The Securities Division ruled "Steadivest mislead and deceived its investors in order to pay off mounting debt and keep its numerous subsidiaries afloat. In a "Robbing Peter to Pay Paul" Ponzi scheme, Steadivest mislead investors through a PPM (private placement memorandum which told investors where money would be spent) which Steadivest had no intention of honoring; through material misstatements of its CEO, Marshall Wolfe, and through material omissions in sales presentations and materials presented to its investors."

The State ordered Steadivest to Cease and Desist immediately from "further illegal activity". If Steadivest violates the order, the State can fine it up to $25,000 and imprison company officers up to five years in jail. Steadivest can request a hearing if it so desires.

It is also important to note several members of Steadivest were disciplined by the State in 2005. Marshall Wolfe was fined $10,000 and the State suspended his securities license for six months for selling promissory notes on real estate deals for MTW, a company he later owned (It was initially owned by his wife, brother-in-law, and Joel Travelstead. Wolfe later became a part-owner.) behind his employer's back to his clients. His employer, Bancorp South, discovered his double dealing, fired him, and reported him to the State. The Cease & Desist Order stated he committed the same violations while working for his next employer, Trustmark. The State ruled he sold unregistered securities and fined MTW Investments, an additional $10,000, as Wolfe sold the unregistered securities for MTW" Earlier post

The State also issued a Summary Cease and Desist Order and a Notice of Intent to Impose an Admistrative Penalty on Jack Harrington and Marshall Wolfe. Wolfe and Harrington operated various Steadivest companies (see earlier post linked above). Such a notice means the State plans on issuing fines against Harrington and Wolfe. Order and Notice.

The State ruled Harrington and Wolfe lied to investors in order to obtain over a million dollars from them to keep their business afloat and maintain their lifestyles. Investors were told their money was used to secure properties (thus there was collateral for the investments). No escrow account was ever established for the funds. Harrington and Wolfe never had any true audited financial statements produced for Steadivest. Steadivest employee Scott Smith told investigators expenses were "out of control."

The State also said Wolfe and Harrington engaged in a series of transactions among several Steadivest companies in order to launder (my choice of words) over $300,000 to Jack Harrington within a few days after investors gave $495,000 to Steadivest. The money was also used to pay off promissory notes owned by Harrington. Harrington apparently asked individuals to invest their money with him without telling them the money would be used to pay him back for his investment, the classic trait of a Ponzi scheme.

Harrington and Wolfe used the investors' money to enrich themselves. Harrington paid himself a $150,00 a year salary. Trips to Disneyworld, furniture, clothes, plane tickets, restaurant bills of several thousand dollars, and other personal luxuries were financed by the bilked investors. It should be noted Mr. Wolfe also purchased a million-dollar home in The Palisades.

Wolfe and Harrington have thirty days to request a hearing on this order. If they decline to do so, the State will then issue fines against each individual if it decides to do so.