Jackson Jambalaya

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The Securities and Charities Division of the Mississippi Secretary of State's office issued a Summary Cease and Desist Order against Steadivest on November 18, 2009. Copy of order. Steadivest is currently in Chapter 7 bankruptcy. Several investors sued Steadivest and several officers alleging they engaged in a scheme to defraud investors for several million dollars.

Steadivest is a collection of companies engaged in several activities related to real estate: mortgage lending, buying and selling properties, new construction, renovations, managing real estate portfolios, and selling promissory notes allegedly secured by real property to investors.
The Steadivest Companies and their officers are:
Steadivest Development: Marshall Wolfe (member)
Steadivest Capital, LLC: Marshall Wolfe (member), Patrick McCraney (registered agent), Jack
Harrington (member)
Steadivest Contrarian Fund: Patrick McCraney (member), Kelly Simpkins (registered agent)
Steadivest Properties: Marshall Wolfe (member), Kelly Simpkins (registered agent)
Steadivest Lending: Marshall Wolfe (member), Kelly Simpkins (registered agent)
Steadivest Resources: Jack Harrington (member), Kelly Simpkins (registered agent)

The order states Steadivest is a "holding company that offers real estate investment, property management, and bridge loan lending". Unfortunately for Steadivest investors, the State also said Steadivest was an elaborate "ponzi scheme". Steadivest sold shares to investors, raising $1,585,000 and spelled out to them in a Private Placement Memorandum (PPM).

A Private Placement Memorandum is "A legal document used in the private placement industry that gives investors details about a company’s business plan, investment information, and other pertinent details. Private placements are offerings of stocks or bonds that institutions or accredited, wealthy individuals may participate in, but which the public at large is excluded from." (Webster's)

The State initiated an investigation on May 26, 2009 after several complaints were filed with the Securities Division. The State found several violations.

Steadivest guaranteed the "investment funds would be held in escrow.... However, Steadivest failed to hold these funds in escrow." The State ruled Steadivest's actions showed "it had no intent to comply with the escrow terms" promised to investors. Steadivest would instead deposit the funds into its checking account where it was "commingled with Steadivest's operating cash" and that Steadivest used the investors' money to "pay bills and support the daily operations of the corporation."

Steadivest promised to maintain an open set of books that members could examine upon giving reasonable notice to the company. Unfortunately for the investors, Steadivest "never produced a single audited financial (statement)" and investors were never able to see the books.

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. Copy of earlier Cease & Desist Order

One investor, Bobby Isonhood, filed suit in August in Madison County Circuit Court against Marshall Wolfe. He obtained a default judgment which was entered against Mr. Wolfe on October 28, 2009 for $1,184,604. It is also unknown as to whether Mr. Wolfe or the officers of the Steadivest companies are the subject of any further investigation by federal or state authorities.