Peter C. Harvey, Attorney General

Division of Consumer Affairs
Reni Erdos, Director

For Immediate Release:
December 4, 2003

For Further Information Contact:
Genene Morris, Jeff Lamm
973-504-6327

NEWARK - The State of New Jersey is suing a North Jersey man who allegedly devised and carried out fraudulent investment schemes that bilked scores of investors out of millions of dollars, Attorney General Peter C. Harvey and Division of Consumer Affairs Director Reni Erdos announced today.

The lawsuit, brought by Consumer Affairs' Bureau of Securities, was filed against Michael R. Casey, of Upper Saddle River, and more than two dozen related corporate defendants. The State alleges that the corporate defendants, created and controlled by Casey, were part of an ongoing scheme to dupe investors by selling unregistered securities primarily through real estate related entities. In addition to the illegal unregistered sales, the State alleges that defendants illegally pooled investor funds into a "special account" from which money would be unlawfully diverted to fund other unrelated investments and Casey's personal expenses. Despite Casey's promises, many of the investors affected by the schemes did not receive any of the money owed to them under the terms of their investment agreements. The state is currently aware of at least 195 investors whose total investments exceed $12 million.

"We will prove that Mr. Casey created and managed a complex web of unregistered investment vehicles for the purpose of defrauding investors," Attorney General Harvey said. "We will show that he acted with complete disregard for New Jersey's securities laws and the financial well-being of the investors he solicited. Our message to would-be con men and swindlers is clear: If you break the law and harm New Jersey investors, we're going to prosecute you and make you pay."

"Investors gave Mr. Casey millions of dollars with the expectation that they would receive profits because of his managerial efforts," Director Erdos said. "However, in reality, Casey would illegally pool investors' funds and use the money at his whim, with only those who repeatedly complained, or threatened litigation, receiving the money they were justly due."

Also named as defendants in the state's suit are DMC Properties, Ltd.; JFC, Ltd.; Midas Financial Planners of America, Inc.; Midas Investment Fund; Midas No-Load Funds, Inc.; Midas Park Ridge Tenants In Common (a/k/a 295 Spring Valley Road Associates); Midas Securities I, L.P.; Midas Security Investors of New Jersey (f/k/a Security Investors of New Jersey (f/k/a Michael Casey Enterprises)); Midas Trading; Midas Wantage Township L.P.; Midas Working Capital Fund, G.P.; 53 Grist Mill Lane; 126 Franklin Avenue Associates; 126 Franklin Avenue Associates Tenants In Common; 140 West Englewood Avenue Tenants In Common; 300 East Homestead Avenue Associates Tenants In Common; 329 Tenants In Common; 1266 Teaneck Road Associates; and 1266 Teaneck Road Associates Tenants In Common.

The Complaint alleges Casey even used his personal residence as an illegal investment vehicle. Casey's current residence in Upper Saddle River, N.J., is owned by a group of investors, solicited by Casey, known as 53 Grist Mill Lane. These investors were promised returns on their ownership of Casey's personal residence which have not been realized.

Casey used a series of investment workshops under the name Midas Financial Planning Services Group to recruit investors. These workshops, held as recently as August 2003 at the Clinton Inn in Tenafly, involved numerous oral and written misrepresentations to potential investors. Casey allegedly continued to conduct the workshops in violation of a consent order he entered into with the Bureau of Securities on April 7, 2003 that barred him from "issuing, selling, offering to sell, purchasing or offering to purchase, promoting, negotiating, advertising or distributing from or within New Jersey any securities or investment advisory advice concerning securities."

"Greed was at the heart of this scheme, which caused many people to lose a lot of money," Bureau of Securities Chief Franklin L. Widmann said. "Casey took the trust of investors and used it against them. His actions are deplorable and show nothing but contempt for the law and the investors harmed by his activities. We're going to work hard to see to it that investors affected by these fraudulent schemes are made whole again."

In one example of Casey's alleged deception, defendant Real Estate Investments, Inc. purchased an apartment building at 329 Essex St., Hackensack, and later sold it to a pair of investors for $613,000. The investors purchased the property upon Casey's advice and arrangements. After years of receiving no regular profit from their investment in 329 Essex Street, the investors requested that Casey sell the building and liquidate their interest. In response, Casey created defendant 329 Tenants in Common ("329 TIC") and transferred to it $775,000, previously provided to him by investors in other Casey entities. 329 TIC purchased the building at 329 Essex Street in Hackensack. However, to date, the investors have not received any of the proceeds from the sale of 329 Essex Street.

The State's suit seeks restitution for affected investors and civil monetary penalties. The suit also seeks injunctive relief, including an order freezing the defendants' assets, appointing a receiver and enjoining the defendants from destroying or concealing records related to their business activities.

Deputy Attorney General David M. Puteska of the Division of Law is handling this matter for the State.