Thursday, June 08, 2000
Tainted firm solicits money
Lawyer denies Lach sent out 'news release'
By Cliff Peale
The Cincinnati Enquirer
Less than a month after a Clermont County judge put control of their assets with a court-appointed receiver, companies controlled by Gerald Lach are telling investors they still are working to build a hotel in Eastgate, a retirement home in Maysville and a new monorail network.
A news release to investors dated May 27 touted the projects and continued to solicit donations through its Web site.
In our opinion, your shares are extremely valuable and you should not be misled to think otherwise by people who may contact you, said a copy of the letter obtained by The Enquirer.
Mr. Lach's attorney, Louis Sirkin, said Mr. Lach had not sent or authorized the letter. He said it came from Michigan, where Mr. Lach's assistant, John Trautman, lives.
How that came about being sent out, I have no idea, Mr. Sirkin said.
The letter is the first news regarding Mr. Lach since Common Pleas Judge Jerry McBride issued a temporary restraining order May 12 prohibiting Mr. Lach or half a dozen related companies from selling stock and putting control of his assets with a court-appointed receiver.
That came after a yearlong investigation by Ohio and Union Township officials. Township police executed a search warrant and raided Mr. Lach's house and office on April 19.
A Clermont County grand jury started hearing testimony from that investigation Wednesday, as sistant county prosecutor Tony Brock confirmed. He would not elaborate on that testimony.
The grand jury has begun an investigation, he said.
The Ohio Division of Securities charged in May that Mr. Lach had sold about $2 million of stock unregistered with state officials to hundreds of investors, and that he had promised investors millions of dollars in profits but had failed to disclose material information.
According to financial records obtained by The Enquirer, Mr. Lach has raised about $2.3 million since early 1996, and spent almost $1.7 million operating and selling the companies.
For the last several years, Mr. Lach has been pitching investments in several related companies to fund a variety of projects, including a high-tech monorail system and a 110-story tower for senior housing.
The news release said the company's public stock offering on Nasdaq would be delayed because someone had stolen records from its Ohio Pike offices.
Mr. Sirkin said the reference probably was to the April 19 police raid.
Wednesday, a hearing before Judge McBride in Batavia was canceled after Mr. Lach agreed to terms of a preliminary injunction prohibiting the sale of unregistered securities, the Division of Securities said in a statement.
The companies named in the injunction include Storehouse, Community Concerned Citizens Inc., Cincinnati Regional Initiative Inc., Western Regional Authority, Midwest Regional Authority Inc. and Golden Age Development Corp., the division said.
Mr. Sirkin said the terms probably would remain in effect until any movement in the criminal case. With that going on, it makes it very difficult for us to defend ourselves in the civil case, he said.
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Tainted firm solicits money