A leopard does not change its spots and such is true about fraudsters. Dangling the promise of riches, Danny Chancellor and David Rowe sold investors on opening a chain of medical clinics in Mississippi. The Secretary of State issued a Cease and Desist order against the enterprise last summer but not before the swindle firm of Chancellor and Rowe (allegedly) bilked them of $9 million.
David Rowe formed Integrated Medical and Wellness Clinic of Mississippi, LLC in 2019. Rowe's LinkedIn page states he is the CEO of the company. Danny Chancellor created Malachi Financial Agency in 2014.
Rowe planned to open IMAWC clinics in Mississippi. The clinics focused on regenerative medicine and individualized treatments for patients.
The CEO hired Chancellor as the broker for the company. Their agreement provided Chancellor to receive a 5% commission for initial investments. Chancellor's commissions would rise another 3% if the investment was held for three years. There was just one problem. Chancellor lost his license to sell securities in 2017 and was not registered. However, such facts were mere trifles to Chancellor as he solicited investors throughout Mississippi.
The company started issuing promissory notes to investors in January 2021. The terms were most attractive indeed as their interest rate was either 10.5% or 13.3%. The notes were from two to four years. There was another problem. The securities were not registered, a big no-no.
Success followed Chancellor as he landed over 100 investors and earned no less than $401,775 in commissions from 2021 to 2023. Many of the investors were Chancellor's previous customers from his time as a broker.
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Unfortunately, the investors soon found the promissory notes were just promises as the company either did not make interest payments or paid them for only a few months, a classic trick of financial fraudsters. The order states:
21. Investors sent many requests to Chancellor to receive their expected interest payments. Initially. Chancellor would tell the investors that the interest payments were running behind and that they needed to wait. Eventually, Chancellor began to ignore investors· calls to receive their interest payments and/or their principal investment amount, per the terms of the Notes.
The Cease & Desist order states investors lost nearly $9 million in Chancellor's scheme.
Why was Chancellor no longer a broker? Glad you asked. The Secretary of State fined Chancellor $12,500 and suspended him for one year in September 2012 for forging a client's signature and making an unauthorized transaction as well as misleading statement.
FINRA suspended Chancellor for three months and fined him $5,000 in 2016 for his failure to disclose a tax lien in his application for securities registration. The Secretary of State hammered chancellor again in 2017, fining him $20,000.
Chancellor terminated his registration in 2017. However, Chancellors shenanigans continued to appear as the Secretary of State said complaints for unsuitable investments were filed and settled through arbitration. Chancellor was supposed to disclose these disciplinary actions to investors he recruited for IMAWC. The disgraced broker instead told them he was "retired."
The Secretary of State ruled Chancellor acted as a broker-dealer even though he was not registered to do so. He misled investors into thinking he was licensed. He did not disclose the promissory notes were not registered.
Chancellor was not alone in having a checkered past. Rowe pleaded guilty to fraud in U.S. District Court in California in 2008. The Court sentenced him to three years probation and ordered him to repay $9 million at $200 per month.
The probation was extended for 18 months in 2012 after Rowe failed to make payments for seven months. Article on his 2001 arrest.
The Cease & Desist order requires Chancellor to stop selling investments or offering investment advice. The order does not mention a fine.
Chancellor appealed for an administrative hearing. The hearing has not been scheduled.
Kingfish note: Unfortunately, there are no active criminal prosecutions of Rowe and Chancellor. Such is how we do things in Mississippi.
33 comments:
I am so tired of this type of behavior and lack of punishment - it’s hard to give a damn.
$9,000,000 paid back at $200/month. The judge should be in jail.
The Book of Malachi was written by the prophet Ezra.
The Book of Malachi focuses extensively on corrupt priests who Ezra, a priest himself who exhorted the people to follow the law, despised.
We are getting to the point of not needing police, lawyers and judges. None of them keep criminals in jail anymore. Have at it America, crimes pays big time!
Lack of financial literacy/savvy fuels this behavior.
And that's why the grifters keep grifting. Mississhitti has been trying to catch up since 1865.
Madison Timber/Lamar Adams 2.0?
Always amused at the number of sucker investors in Mississippi.
Those investors never heard of "if it seems too good to be true...."
The 'Sip is such a target rich environment. There are suckers born every minute here and the grifters know this. Pssst, mister, I have some timber futures on sale. The 'Sip, trying to catch up since 1865.
White collar crime laws aren’t enforced in Mississippi unless it’s done by the FBI/ DOJ; but they don’t have the capacity to take all the cases. The AG needs a special unit for these crimes.
Same reason we have a drug problem: there's an eager market dying to get high without considering the cost. In the fraud realm, there's an eager market dying to get fantastically high returns without looking behind the sales pitch. Both are dumbasses.
The only book most Mississippians have read is likely to be the Bible. So if you can invoke some religiosity into your image, you give them the warm and fuzzies. Looks like they did just that.
I’ve encounter more grifters and scammers with crosses, scriptures, and fishes on their business cards and logos. Y’all should be ashamed.
One thing you can probably say about Danny Chancellor: He's no Porter Bingham!
Fitch is a ZERO.
Most DA's don't want to fool with white collar crime or fraud cases such as this one. It means they usually have to hire an accountant to figure it all out, which means spending money. The AG's office won't do it well, who knows why. Our elected officials don't like to prosecute white collar crime so surprise, they don't.
So true, and if someone says "he is a good Christian," they are hooked.
The term is affinity fraud.
this the same malachi financial that bilked hinds county and city of jackson out of untold millions?
No. That was Malachi Financial Products. Similar names and when I wrote about MFP, readers sometimes confused the two.
Apparently the confused readers weren't completely wrong!
@11:33 Thanks. I learned a new term.
"Malachi" is from the Old English and translates to Bend Over Sucker.
KF our family hosted a young law school graduate who interned for Fitch. The AG is desperate for anyone with any legal experience. Can we get her a Now Hiring sign?
Mississippi judges are mostly POS.
The sooner the better.....then we might start to see real justice as intended. Lock and load.
https://www.sec.gov/about/divisions-offices/division-enforcement/affinity-fraud
This guy is like a scavenger, who keeps going back to the same place he once found a meal.
Apparently, Lynn Fitch was so afraid of anyone talking about her behind her back (presumably for being unqualified and incompetent), she fired most of the people who were qualified to prosecute this crap.
Let me guess...
Danny boy graduated from Ole Miss?
Flim Flam!
Many incompetent people are insecure to the point that all their subordinates must be even less compentent than they are so that their elaborate charade of competence can continue.
Can someone tell me who this is and why they face no serious consequences? Mississippi is too small, I can not believe people fell for this.
1:38, Good point.
True, because when she came into office, besides changing the drapes and getting new furniture (same thing she did when she went into the Personnel Office, and then the Treasurer Office) she fired many of the long time experienced attorneys. True, she did need to clean house of some of them, those politicos that Mike Moore brought in and were kept by Hood; and those that Hood brought in to cover his ass while he stayed in NE MS; but there were many of them that were true adherants of the office - experienced, capable, and if 'politically inclined were more conservative than she ever thought to be. (Granted, that's assuming that 'she' ever 'thought' - but even if one gives her credit for having the ability, she certainly didn't do it when thinking that there was actually work to be done in that office.)
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