Texas Securities Commissioner John Morgan entered an Emergency Cease and Desist Order on Aug. 15 that requires Bobby Eugene Guess, an unregistered investment promoter, to stop engaging in fraud in marketing promissory notes tied to a wide array of businesses.
The emergency order cites Guess’ failure to disclose to potential investors that Collin County State District Judge Mark J. Rusch issued a search warrant Aug. 4 authorizing the seizure of the business records of Texas First Financial LLC in Frisco.
Guess, the founder and CEO of Texas First Financial, is better known as Bob Guess in North Texas, having raised his profile through radio advertising and invitations to investment “forums.”
The Texas State Securities Board and the Secret Service assisted in the Aug. 5 execution of the warrant.
Judge Rusch found probable cause to issue the search warrant based on information in the affidavit for the warrant. The affidavit cites evidence that the principals of internet advertising company Stamedia Inc., whose promissory notes Guess offered for sale, used investor funds to perpetuate a Ponzi scheme and pay personal expenses from July 2015 through January 2016.
Stamedia principals spent an average of $423,000 a month over that period, according to an analysis by a financial examiner with the Texas State Securities Board.
Guess and Texas First Financial also offered for sale promissory notes in North-Forty Development LLC, a real estate company in Frisco. The notes would purportedly pay an annualized return of 9%, backed by deeds of trust for the properties North-Forty developed. (North-Forty was previously known as Texas Cash Cow Investments LLC.)
According to the affidavit, as much as $1.4 million of investor funds placed with North-Forty and associated companies were spent to cover a federal tax lien for that amount. The tax lien, which was outstanding as of April 2016, was levied against a North-Forty principal.
Besides an internet company and a real estate developer, Guess and Texas First Financial offered for sale investments – none of them registered for sale in Texas – in Primary Urgent Care LLC, a health-care provider, and Mechanical Motion Solutions LLC, which purportedly sells a chiropractic tool.
Guess also previously sold unregistered promissory notes and interests in life settlement contracts issued by Credit Nation Capital LLC of Georgia. Guess was an owner and vice president of sales and marketing for the company.
Guess intentionally failed to disclose that the Securities and Exchange Commission sued Credit Nation in 2015. The SEC alleged that Credit Nation was operating a multi-million-dollar Ponzi scheme to continue to lure investors and cited Guess for concealing the dire financial situation of the company.
The U.S. District Court for the Northern District of Georgia in April 2016 enjoined Credit Nation from violating anti-fraud provisions of federal securities laws and placed the company into receivership.