By James McNair
The Cincinnati Enquirer

Seven Greater Cincinnati residents have filed suit against a part-time security system salesman, alleging that he duped them into buying investment certificates that promised annual interest rates of up to 400 percent.

The lawsuits, filed in Hamilton County's Court of Common Pleas, accuse Stanley Cox of Kenwood and his company Vital Investments of fraud, breach of contract and sale of unregistered securities.

A lawyer for six of the seven said the Ohio Division of Securities is gathering evidence, a statement that the agency would neither confirm nor deny.

Cox did not return phone calls Tuesday.

In documents provided by Susan Hovey, a lawyer for the United Auto Workers-Ford Legal Services Plan, Vital Investments describes itself as a "private investment association by invitation only." It says its members include "executives from Fortune 500 companies such as Procter & Gamble and Cincinnati Financial."

A financial statement for the four-month period ended April 30, 2002, put Vital's "account value" at $1.29 billion, while showing net earnings of $108.9 million for the period.

Twenty percent of those profits, Cox wrote, went to charity, although he didn't specify which ones.

"When we began Vital, over 58,000 children were dieing (sic) daily from starvation and mild nutrition," he wrote, signing as president. "Today it is 32,000 daily; that totals over 11 million a year."

But it was the promised rate of return that apparently made the deal too lucrative to pass up.

On several of the one-page certificates filed with the lawsuits, Vital offers interest rates of 50 to 400 percent. One such document, signed by Cox, calls for a $20,000 investment in July 2003 to grow into a $100,000 "payoff" by July 2004 through monthly "payoffs" of $8,334. Investors were instructed to make their checks payable to Cox.

"He started me out at about a 30 percent return, then 50, then 100 and he offered me a rollover at 300 percent at one point," said James Travis, a Pleasant Ridge resident who filed suit for $75,000 without the help of a lawyer.

Hovey said she thought the offering commenced sometime in 2001 - and lived up to its obligations until the middle of last year.

"Mr. Cox paid everybody who is a client of mine on every note, like clockwork, right up until the 15th of July last year," she said. "In the middle of August, he sent a letter to everyone, at least in my group, that he was calling the deal off and returning the principal, but that's the last they heard from him."

Hovey's clients are asking for the return of a combined $1 million. In addition to suing Cox, they are providing documents to state securities regulators.

"All of my clients have been contacted by the Ohio Securities Division," Hovey said.

Dennis Ginty, a spokesman for the Ohio Securities Division, said Cox and Vital are not licensed to sell securities in the state.

Jerry Deehan, general manager of Guardian Protection Services in Sharonville, confirmed that Cox was a part-time salesman as of Tuesday and had been for six years. He said he was unaware of the allegations.

E-mail jmcnair@enquirer.com.