By James McNair
The Cincinnati Enquirer

Ohio securities regulators are investigating allegations that a Sycamore Township man scammed fellow African-Americans through an investment scheme that collapsed after offering sky-high interest rates.

Although no criminal charges or civil enforcement actions have been filed against Stanley Cox, seven of his clients are claiming in civil lawsuits that he defrauded them out of a combined $1 million. All seven are black, as is Cox, and investigators think that most, if not all, of Cox's clients are African-American.

"It's my understanding that it was primarily an investment group for African-Americans," said Pat Kemper, a Springfield Township detective who began investigating Cox, of 5797 Kugler Mill Road, last August. "I didn't get into that with him (Cox), but that's my understanding through an investor I talked to."

In letters to investors, Cox, 65, identified himself as president of a company called Vital Investments. Neither he nor Vital is licensed with the state to sell securities, officials say. But in mailings Cox described Vital as having $1.4 billion in assets as of last Aug. 31, mainly in the form of franchises, rental properties, real estate and stocks.

Cox shut down Vital last July and, according to investors, has failed to live up to his promise of returning their money.

The ensuing surge of complaints prompted an investigation by the Ohio Division of Securities. The agency would not discuss the case, but Springfield Township police and Hamilton County Prosecutor Mike Allen are deferring to its investigation.

Cox could not be reached for comment. His lawyer, Mike Barrett, would not discuss the matter in detail.

"All that I can say is that we have been in contact with investigating agencies and are cooperating fully," Barrett said.

The lawyer also said Cox's brother, Cincinnati investment firm owner and Cincinnati Bell chairman Phillip Cox, had nothing to do with Vital.

With a search warrant, Kemper removed five or six boxes of documents from Stanley Cox's condo Oct. 6 and turned them over to the Division of Securities.

"The office was down in the basement," Kemper said. "It was well-equipped, but if I myself were to be investing these sums of money, I would sure the heck invest with somebody who had an office-office, not an office in a basement."

Investors were led to believe that they were participating in an "invitation only" offering whose participants included executives from Fortune 500 companies such as Procter & Gamble and Cincinnati Financial Corp. In his crudely typed, misspelling-prone handouts, Cox described himself as a marketing consultant to "P&G, G.E., Kellog's (sic) and Nine West Shoes."

Vital claimed to be so profitable that it was able to share 20 percent of its profits with charities that feed starving children around the world.

About 100 or more people exchanged their money for one-year promissory notes bearing 50, 100, 150, 200, 300 and, toward the end, 400 percent interest. Cox asked that checks be made out to him.

But after Vital's collapse last July, Kemper said he learned that its bank account had run dry.

A spokeswoman for Procter & Gamble said she could not confirm if Cox had ever performed consulting work for the company.

Interviews with Kemper, investors and a lawyer who filed suit for six investors depict an operation that spread by word of mouth in African-American circles.

"These kinds of crimes aren't committed that much among black people," said Jim Clingman, an African-American adjunct professor of black entrepreneurship at the University of Cincinnati and author of the book Blackonomics. "I'm sure there's a reason for that. One is that we're not that involved in investment programs and things like that."

For now, Cox's customers are reeling from Vital's collapse.

James Travis of Pleasant Ridge said he thinks most of Cox's clients are, like himself, African-Americans. He filed suit in Hamilton County Common Pleas Court against Cox - without a lawyer - for $75,000 in damages.

Thomas McCloud of Lincoln Heights said he has not been able to reach Cox by phone and cannot enter Cox's gated subdivision.

He said he invested more than $10,000 with Cox. He doesn't know what to expect.

"I don't have any idea," said McCloud, who is African-American. "They say they're investigating and can't find any money, so what can you do?"

E-mail jmcnair@enquirer.com.