Fraud Victims Get Relief From Special Fund [AUDIO]
Commissioner of Securities and Insurance Monica Lindeen announced this week the first beneficiary of the state's new securities restitution fund, a pool of money set up to help victims of investment fraud. Reece Cobeen of Plains, Mont., a victim of a hurricane relief investment scam, will receive $13,750.
Montana's 2011 Legislature created the Securities Restitution Assistance Fund to aid victims who will never recover their stolen money. The fund, which is made of court-ordered contributions from white collar criminals, is the second of its kind in the nation. Already, Lindeen's office has collected more than $250,000 for the fund from brokers and firms who have violated state securities law.
Cobeen had invested $55,000 in phony promissory notes advertised and sold by Terry Parks in 2007. Parks told Cobeen his investment would help rebuild homes in Louisiana that were destroyed by Hurricane Katrina. Parks promised Cobeen a 24 percent annual return on the investment. Parks is currently serving time in at the Montana State Prison in Deer Lodge.
Victims of securities fraud who have no opportunity to receive restitution, like Cobeen, can apply to receive 25 percent of the money they lost or $25,000, whichever is lesser, from the Securities Restitution Assistance Fund. Additional restrictions on the maximum payment from the fund apply when the fund's balance falls below $1 million.
The Commissioner's office expects many more applications for assistance in the coming weeks from victims of the Cornerstone Financial Ponzi scheme in Kalispell. That scam robbed Montana investors of more than $14 million.
For more information about the securities restitution assistance fund, call 800-332-6148 or visit the Commissioner's website at csi.mt.gov/securities/restitution.asp.
State Insurance Commissioner Monica Lindeen