Order from secretary of state accuses insurance agent of fraud

A Cape Girardeau insurance agent is the target of a cease-and-desist order accusing him of losing more than $241,000 of a Jackson woman's money in a fraudulent investment scheme after promising to make her "rich" so she could "retire in two years."

Manzur Ahmed Mazumder is accused of persuading a colleague at a Cape Girardeau insurance agency to let him set up trading accounts in her name and make investments for her using more than $300,000 she pulled from her individual retirement accounts, credit cards, a home equity line of credit and her bank account, according to a cease-and-desist order filed Nov. 18 by Missouri Secretary of State Jason Kander's office.

Online court records show no criminal charges have been filed against Mazumder, but Kevin Flannery, a spokesman with Kander's office, said the secretary of state has been working with federal authorities investigating Mazumder's activities.

By March 30, 2012, Mazumder had lost more than $241,000 of the money the victim invested in the trading accounts, and as of Nov. 18 of this year, he still owed the victim more than $70,000 on an investment with his company, MSM Capital, according to the order, which accuses Mazumder of transferring the MSM investment money to personal accounts and using it to make personal investments, take cash withdrawals and pay credit card debt, travel expenses and personal debts.

Reached by telephone Tuesday, Mazumder declined to comment on the specifics of the case but said the accusations against him were "wrong and inaccurate" and stemmed from jealousy and confusion.

"Sometimes people make stories up and perceive different than what actually happened," Mazumder said. "It's all about just pointing fingers out of jealousy."

Between September and December 2011, Mazumder told the woman he had a company called MSM Capital that could make her "rich" and enable her to "retire in two years," the cease-and-desist order states.

In September 2011, Mazumder set up accounts for the woman, told her to invest funds from her IRAs in it and required her to sign a confidentiality agreement precluding her from disclosing information connected to MSM Capital, the order states.

He later pressured her to raise $130,000 in additional funds for him to trade, encouraging her to borrow money from credit cards and even her parents, who were at least 80 years old at the time, the order states.

According to the order, Mazumder failed to advise the victim of the risks before she withdrew funds from her bank account and borrowed from credit cards and a home equity line of credit, ultimately investing more than $310,000 in trading accounts managed by Mazumder between September 2011 and January 2012.

During the same period, the victim transferred $80,000 to a bank account in the name of MSM Capital, with the understanding that the investment -- which would be classified as a "consultant fee" -- could be written off her taxes and would be used to invest in initial public offerings that Mazumder told her would generate more than $220,000 in profit, the order states.

The cease-and-desist order also claims that in February and May 2012, two other people wrote MSM Capital checks totaling $10,000 for "consulting fees," but Mazumder transferred the funds to his personal account and used it to pay credit card debt and "Wal-Mart expenses" or took it as cash withdrawals.

Between January and August 2012, the order states, Mazumder sent the Jackson woman a series of letters promising to "make things whole" for her, asking her to "be patient and let [him] finish" and promising "the biggest payday of our lifetime within this next two months."

But Mazumder contends he never invested any money for the woman.

"She did everything on her own. Just our partnership didn't pan out" after they stopped working together, he said Tuesday. "She didn't make the money she needed to make without my help, and that's when the jealousy started."

At no point was Mazumder registered as a broker-dealer in Missouri, the secretary of state's office reported.

The order from Kander's office bars Mazumder from selling investments or offering financial advice and requires him to pay restitution with interest, along with penalties totaling more than $45,000.

Mazumder has 30 days from the date of the order to request a hearing before the order becomes final.

Mazumder said he and his attorney have a court date early next year to respond to the allegations.

"The accusation is wrong and inaccurate. Actually, the lawyer has been taking care of [that] as we speak in Jefferson City," Mazumder said Tuesday afternoon.

Mazumder is not the first Cape Girardeau insurance agent in recent months to be accused of investment fraud.

Keith Monia, a former insurance agent who lost his license amid questions about his financial dealings, faces a total of 15 felony charges in two counties.

Prosecutors have accused Monia of taking more than $560,000 from nine people since 2007, usually by telling them he was going to invest the money for them but failing to make the promised investments.

In one case, Monia is accused of taking $220,000 from an elderly Scott City couple, promising to invest the money in annuities.

A probable-cause affidavit filed in that case states most of the money ended up going to George Joseph, who is in the Cape Girardeau County Jail on murder charges in connection with the May 30 shooting deaths of his wife and son.

During the investigation into Monia's activities, Joseph told a Scott County detective he had been running a 60-member "investment club," the detective has said.

After Joseph's arrest in June, worried investors began contacting media outlets and law enforcement agencies with questions about how to recover their money.

At a preliminary hearing in Joseph's murder case, a family member said Joseph had been under stress because he had lost investors' money and was being investigated by the FBI.

epriddy@semissourian.com

388-3642

Pertinent address:

63 Sena Fawn Drive, Cape Girardeau, Mo.