An Iredell County businessman has been charged with defrauding investors and ordered to shut down two corporations through which he conducted financial transactions.
Shelby Dean Martin, 71, of Mooresville was charged Friday with seven felony fraud counts in cases involving six investors and ordered to cease operations of D. Martin Enterprises, Inc., and DM Ventures, LLC. Some 150 investors are believed to have invested $10 million over at least 10 years with Martin, according to the Secretary of State’s office.
The arrest came after Secretary of State investigators searched Martin’s residence at 732 Isle of Pines Road in Mooresville, as well as a separate storage facility.
The Secretary of State’s cease and desist order and arrest warrants charge that Martin issued promissory notes through his companies, claiming funds would be used to provide working capital for businesses that were in the process of moving from being privately owned to publicly traded firms. Rather than the monies being invested in such businesses, though, investigators allege Martin converted the funds to his personal use and used them to pay previous investors.
Secretary of State securities investigators began building the case in late 2008 following a tip from an investor.
The cease and desist order also states that neither Martin nor his companies were properly registered.
“This should be a wake-up call to everybody. Sadly, in these challenging economic times, we may see even more fraudulent securities schemes,” Secretary of State Elaine F. Marshall said Monday. “So it is more important now than ever for potential investors to remember that if an investment deal sounds too good to be true, it probably is.”
Marshall said anyone considering an investment should call the State Securities Division at 1-800-688-4507 to make sure the person pitching the investment, and the investment itself, are properly registered.
Martin had a first appearance Monday in Iredell Country District Court and is being held under $700,000 secured bond in the Iredell County Jail.