BOSTON — The Securities and Exchange Commission (SEC) has filed a civil complaint against four area men alleging they engaged in fraudulent activities surrounding an initial public offering.
The complaint was filed Monday in U.S. District Court in Rhode Island. It alleges that William E. Kraemer, Donald E. McCourt, George T. Helm and Robin L. Sampson defrauded investors of some $240,000 by inducing the investors to invest in Prexomet Corp., a now defunct corporation based in Smithfield.
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According to the SEC, beginning in January 1997, the defendants told prospective investors that Prexomet owned a valuable Arizona mine, offering Prexomet stock at $1 per share. The defendants then allegedly told the investors the company would soon go public through an initial public offering (IPO), and that investors would earn a 500 percent return on their investments within several months.
According to the SEC, the defendants also allegedly told certain of the investors that their invested funds would be used to cover either mine development expenses or IPO costs.
Neither the company nor the defendants ever owned a mine, the SEC said. The SEC also alleges that the defendants never intended to bring the company public, as they never filed any document with the commission or spent money on the effort. Instead, the SEC alleges, the defendants diverted most of the funds for their personal benefit. Investors never received back any of their portion of either their original investments or their promised returns, the commission said.
According to the complaint, Kraemer, of Bethlehem, Penn., was the founder, owner, chairman and CEO of Prexomet. McCourt, of Foxboro, Mass., was the company’s president. Helm, of North Smithfield, R.I., was the company’s secretary and treasurer. Sampson, of Saunderstown, R.I., did not work for Prexomet, but allegedly solicited investors on its behalf.
