FOX19 has learned investigators from the Ohio Department of
Commerce's securities division want to meet soon with Rep. Pete Beck (R-Mason),
chairman of the powerful House Ways and Means Committee in Columbus that's responsible
for writing tax laws. The investigators want to know if Beck did anything
illegal as part of a group of businessmen in the Cincinnati area that, court
documents say, solicited money for a failed investment operation that cost
investors from the Tri-State to DC to Alabama more than $1 million.
Beck's attorney, Mason lawyer Konrad Kircher, tells FOX19
that Beck will answer all of the state investigators' questions and will not
"plead the fifth," as it's come to be known when the target of an investigation
declines to answer questions out of fear it could incriminate him.
"He's extremely hurt. He's baffled," Kircher said, citing
Beck's service in the Marine Corps and his public service in the Mason area
since 1997 as evidence of Beck's good character. To underscore just how much
this is personally affecting Rep. Beck, Kircher said, "He's not sleeping well."
The investors' allegations have not only launched the state
investigation they're also part of a lawsuit filed in Hamilton County, which
FOX19 obtained. In the court documents, the plaintiffs' attorney accuse Rep.
Beck of committing fraud by making "false representations" to 11 of the 14
Rep. Beck, according to the lawsuit, was acting in concert
with Thomas Lysaght, who died
unexpectedly in November 2010 at the age of 67. Lysaght owned a Cincinnati
company called TML Consulting, which provided "strategic planning for
businesses," according to Lysaght's former business card.
Court documents say Beck and Lysaght were seeking money from
investors for TML Consulting and another company called Christopher
"In fact, they were investing in something that was
legitimate," Kircher said. "Christopher Technologies was a legitimate company.
It produced a product that was an alert system. After Virginia Tech, there was
a demand for alert systems for college campuses. Christopher Technologies developed
that type of software. In fact, they sold it to Wilberforce
University. After that, they couldn't adapt to the market and the company
didn't do very well. But it was a legitimate company."
The financial health of Christopher Technologies and TML
Consulting --- along with what Beck did or didn't tell people who were thinking
of investing --- is at the heart of the allegations against him.
"At the time Beck provided…financial information to
potential investors, he was aware, or should have been aware, that the
financial condition of both entities was very poor," the lawsuit states.
But Kircher maintains Rep. Beck's involvement with the
investment operation was limited.
"Mr. Beck made no representations. He didn't solicit any
investments," Kircher said.
Among the investors named in the lawsuit, the biggest loser
was Michael Farms, the largest vegetable farm in Ohio, according to its website.
Rep. Beck is not accused of soliciting the family that owns the farm. Lysaght
and another businessman approached the Michael family, according to the
lawsuit. In the end, Michael Farms ponied up $500,000. It's all gone.
An ownership agreement shows that Michael Farms was
eventually going to invest a total of $1 million for a 10% stake in TML
Each of the investors got worried when they couldn't get any
information about how TML Consulting was doing after it had their money. Then
Lysaght died on November 15, 2010. After that, some of the investors
reached-out to Rep. Beck, the lawsuit says, but couldn't get any information.
Kircher argues Beck didn't have any information to offer them.
Meanwhile, state investigators will likely also want to know
if any of the investors' money ended-up in Rep. Beck's campaign fund. The
plaintiffs' attorney claims in court documents that he's identified $15,000 in
questionable donations to Beck's campaign. That includes a $10,000 check in
August 2010 from the TML investor account to Beck's campaign, according to the
Kircher says Rep. Beck simply viewed the donations as coming
from a business associate's company and believes the donations were legal.
Friday, May 24 2013 7:15 AM EDT2013-05-24 11:15:11 GMT
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