An associate pastor of a Fort Smith church has agreed to refund $66,500 that the state securities department says he took from a church member, promising to invest it but instead spending it onhimself, a department attorney said Thursday.
The Arkansas Securities Department believes Thomas James, who now lives in Fayetteville, has taken money from several other investors and the agency is continuing to investigate“with haste,” said Campbell McLaurin.
Through his Little Rock attorney Peter Kumpe, James agreed during a Pulaski County Circuit Court hearing Wednesday to repay the money within 30 days,McLaurin said. Judge Alice Gray also ordered that James provide information on any other investment money he received and how he disposed of it, McLaurin said.
At McLaurin’s request, Gray issued a temporary restraining order April 19 that, among other things, froze James’ assets and ordered him not to destroy or dispose of any financial transaction records.
Contacted Thursday, Kumpe declined to comment on the case.
“The only comment I would like to make is that the funds will be returned,” James stated in an e-mail response to a request for comment Thursday.
The department is continuing the civil investigation and it’s possible the department could refer the case for criminal prosecution, McLaurin said.
According to a civil complaint the department filed April 18, James persuaded the female member of St. James Missionary Baptist Church, where he is an associate pastor, to invest her savings with his TJames Investments in a fictitious U.S. Treasury Bond Fund held at LPL Financial LLC, one of the nation’s largest independent broker-dealers.
A statement issued by TJames Investments to the investor stated the bond would yield 23.9 percent per quarter.
An affidavit filed with thecomplaint by department Deputy Commissioner Ann McDougal stated that most of the money James received from the church member was deposited in his personal Arvest Bank account.
“There is no indications that any money that James deposited into his account was ever invested in securities,” McDougal stated in the affidavit.
The affidavit stated that the money was spent on trips to Las Vegas, New York, Miami for a Carnival cruise, Dallas, Kansas City and Tulsa and several shopping sprees for jewelry, clothes and electronics and for hotels and restaurants.
The complaint accuses James and his company of committing securities fraud and selling securities without being registered with the state.
A search by department staff showed the treasury bond fund didn’t exist and that James was not associated with LPL Financial, according to the department’s complaint.
According to court documents, James was a former broker-dealer agent for Merrill, Lynch, Pierce, Fenner & Smith Inc. from 2006 until he was terminated and his registration with the state securities department lapsed on Sept. 3, 2010.
Northwest Arkansas, Pages 7 on 04/26/2013