BULLETIN: Another Florida Fraud Case; SEC Charges 4 In Alleged ‘Children’s Book’ Scheme Known As ‘Winning Kids'; Attorney General Introduced Task Force In Area Three Weeks Ago

UPDATED 5:18 P.M. ET (U.S.A.) A Florida company and four individuals have been charged with securities fraud by the SEC, amid allegations they fleeced investors in a children’s book company known as “Winning Kids.”

Charged in the case were Winning Kids Inc. of Palm Beach Gardens, Fla; Christian Hainsworth, Winning Kids’ chief executive officer and founder; and sales agents Robert Comiskey, Edward Tamimi and Victor Selenow. The SEC alleged the defendants sold unregistered securities to as many as 190 investors, raising $1.9 million in the scheme.

The litigation is centered in Palm Beach County, an area U.S. Attorney General Eric Holder visited three weeks ago to discuss the Obama administration’s Interagency Financial Fraud Enforcement Task Force.

Hainsworth was accused of receiving $541,000 over the course of the unregistered offering, “through checks he issued to himself and his wife and ATM withdrawals,” the SEC said.

Meanwhile, Comiskey, Tamimi, and Selenow received about “$322,000 of the offering proceeds as selling commissions,” the SEC said.

Hainsworth, Tamimi and Selenow had previous run-ins with regulators, the SEC said.

“In 1995, the Kansas Securities Commission entered a consent order against Hainsworth to cease offering to sell unregistered securities in that state,” the SEC said.

Hainsworth was also a subject of the South Dakota cease-and-desist order earlier this year, stemming from the business practices of Winning Kids, according to records.

Tamimi, 33, of Palm Beach Gardens, was filed $5,000 by the National Futures Association (NFA) in 2006 “for making misleading sales solicitations and using high-pressure sales tactics,” the SEC said.

He received $194,250 in sales commissions from Winning Kids between May 2007 and September 2008, the SEC said.

Selenow, 48, of Royal Palm Beach, was charged with securities violations by the SEC in 2002 and ordered to disgorge $30,000. The 2002 case involved a company known as “The Gaming Factory Inc.,” according to records.

In 1995, according to records, the NFA fined Selenow $50,000 “for making misleading sales solicitations and using high-pressure sales tactics,” the SEC said.

Selenow received $41,500 in Winning Kids’ commissions between April and December of 2007, the SEC said.

Comiskey, 62,of Palm Beach Gardens, received $86,975 in Winning Kids’ sales commissions between April 2007 and September 2008, the SEC said.

Holder spoke in South Florida Jan. 8, saying the area was altogether too familiar with financial fraud and using an event at the Forum Club of the Palm Beaches to spotlight the Interagency Financial Fraud Enforcement Task Force.

Only three weeks after Holder left, the SEC filed the Winning Kids’ action. The litigation once again puts Palm Beach County in an unwanted spotlight. It is the home of each of the Winning Kids’ defendants and the same county in which Holder spoke, describing the area as “Ground Zero” of financial fraud.

Each of the defendants was familiar with securities laws and held various securities licenses over the years, the SEC said.

“Winning Kids marketed its securities offerings primarily through a radio advertisement Hainsworth placed on a station covering New York, New Jersey, and Connecticut,” the SEC said. “The ad provided a toll-free number for interested investors to call. Hainsworth hired Comiskey, Tamimi, Selenow, and other sales agents to speak with potential investors.”

Prospects were told “that Winning Kids was a “dividend yielding investment” to be paid out on a quarterly basis,” the SEC said.

Lies were part of the scheme, the SEC alleged.

“The sales agents told investors they were vice presidents of Winning Kids, and Hainsworth provided them with business cards stating that,” the SEC said.

In reality, however, the SEC said, “they were independent contractors that received commissions based on the sale of Winning Kids securities.”

Sales agents were paid “cash commissions of 15 to 20 percent of each sale they made,” the SEC said. “In addition, Selenow received for a few months 5 percent of the sales proceeds the other sales agents raised.”

Hainsworth, the SEC said, “paid the entire 20 percent at the time the sales agent made each sale.”

Hype also was part of the scheme, the SEC charged.

Winning Kids’ pitch included claims the company “was starting an acceleration phase of extraordinary growth,” the SEC said. “In reality, Winning Kids generated almost no revenue from the sale of its books or any other product from 2004 through 2008. In addition, Winning Kids spent most of 2007 redesigning the books rather than trying to actively sell them.

“Furthermore,” the SEC said, “Winning Kids did not actively try to sell its books for most of 2008.”

Winning Kids suggested in offering materials that “for each $10,000 [customers] invested, they could expect to get back $30,000 a year — in other words, a 300 percent annual return,” the SEC said.

Winning Kids based is assertions on unrealistic projections, while also misleading investors on how the company would use their money, the SEC said.

Although Private Placement Memoranda “represented that 90 percent of the offering
proceeds would be used for product development, manufacturing, advertising, marketing, and working capital,” the SEC said, “Hainsworth and the sales agents received at least 40 percent of the $1.9 million Winning Kids raised.”

Winning Kids and Hainsworth have consented to the entry of a final judgment that permanently enjoins them from committing or aiding and abetting future violations of the above provisions, and orders them to pay disgorgement of ill-gotten gains and a civil penalty.

Winning Kids and Hainsworth neither admitted nor denied the SEC allegations, in consenting to the judgment.

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10 Responses to “BULLETIN: Another Florida Fraud Case; SEC Charges 4 In Alleged ‘Children’s Book’ Scheme Known As ‘Winning Kids'; Attorney General Introduced Task Force In Area Three Weeks Ago”

  1. Hello Patrick;
    I read with great intrest, this story about “Winning Kids”. I hope you can help me. I’ve been under pressure from an ‘Edward Tamimi’ who is a sales rep/account manager for Eagle Bullion Group Inc. of Jupiter FL…to buy into an Eagle Bullion program. The Edward Tamimi is going to be 34 in March.
    Would you know if this is the same Edward Tamimi regarding Winning Kids and Eagle Bullion Group Inc. of Jupiter FL? As I do live in Moab UT, I am unsure as to the locations of Jupiter FL and Palm Beach, Palm Beach Gardens.
    Thank you for your time, consideration and understanding.

    Sincerely yours,
    Gary Hazen
    Moab UT

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  2. Gary Hazen: buy into an Eagle Bullion program.

    Ok, lets start with the web site: eaglebulliongroup.com – it’s registered anonymously, RED FLAG!
    Lets google some of the phrases on the site.
    “No you are able to enter and exit the market as often as you deem profitable.” – this gives us the defunct web site metalsmega.com. RED FLAG!

    “you can purchase precious metals for immediate personal delivery or arrange for convenient storage at an independent bank or depository.” – this gives us lloydsmetals.com. This just so happens to be :
    Registrant:
    lloyds holdings llc
    601 heritage drive
    suite 202
    jupiter, Florida 33458
    United States

    Looks to me like you have a mini-egold operation running out of Jupiter, Florida running with multiple domain names.

    Gary, if you really want to throw your money away I’m sure I could pick a gee-gee running at Newmarket tomorrow. Pin a race list to a dart board & throw dart, bet on horse, simples.

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  3. Dear Sir,

    your site has inadvertently associated my company with an SEC action against unrelated peoples and entities! Edward Tamimi is not associated with eagle bullion group nor this case in question. I respectfully request a professional retraction or follow up for dilligent clarification. Your statement is FACTUALLY COMPLETELY innacurate, thank you for your mannered attention.

    Kind Regards,

    Terry Sacka, AAMS
    Eagle Bullion Group

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  4. Terry,

    It seems as though Gary Hazen — in a comment above — says he got a high-pressure call from “Edward Tamimi,” who identified himself as a sales rep/account manager for Eagle Bullion Group.

    You appear to be saying that Edward Tamimi could not have called Gary Hazen for Eagle Bullion Group because Edward Tamimi is not associated with Eagle.

    Here is the SEC complaint that names “an” Edward Tamimi in a case against Winning Kids Inc. and three other individuals. The SEC alleges that Edward Tamimi worked as a telemarketer for Winning Kids.

    http://www.sec.gov/litigation/complaints/2010/comp21400.pdf

    The Edward Tamimi in the SEC complaint was listed as age 33, when the complaint was filed Jan. 28, 2010. The same Edward Tamimi was named in a complaint by the NFA in a separate matter in 2005. The NFA complaint alleged “high-pressure” sales tactics, among other things.

    http://www.nfa.futures.org/basicnet/CaseDocument.aspx?seqnum=253

    Here is Edward Tamimi’s handwritten answer to the NFA complaint:

    http://www.nfa.futures.org/basicnet/CaseDocument.aspx?seqnum=657

    Here is the NFA decision that assessed a $5,000 fine and other penalties against Edward Tamimi:

    http://www.nfa.futures.org/basicnet/CaseDocument.aspx?seqnum=693

    Note that the NFA says Edward Tamimi’s middle initial is “A.”

    See NFA news release:

    http://www.nfa.futures.org/NFA-regulation/regulationNewsRel.asp?ArticleID=1573

    Terry, I was not sure about what you were asking because this part of your post confused me a bit:

    “Edward Tamimi is not associated with eagle bullion group nor this case in question.”

    Your statement that Edward Tamimi is not associated with Eagle Bullion seems plain enough. You don’t seem to be saying, though, that he was never associated with Eagle. You might want to make that clear, if you believe any doubt is lingering based on your post above.

    My confusion stemmed from the specific phrase “nor this case in question,” which seems to be a reference to the SEC case cited above.

    In any event, please feel free to clarify as you see fit and put as fine a point on it as you want

    Thanks,

    Patrick

      (Quote)

  5. I do not know if this guy Edward Tamimi worked at Eagle Bullion Group but I can tell you for a fact Eagle Bullion Group uses ” Boiler Room ” sales tactics. The board room is full of used car salesman, they corny motivation meetings, standing up when you pitch, raising you voice.

    Your sales ability is based on the volume of your voice. It is complete with the pimple face 19 yr old yelling into the phone, some clown named ” Spike ” talking about power and some Joel Osteen wannabe who leads a group prayer. The bozo Director of Ops that was selling water treatment systems a year ago.

    I am not saying they are doing anything illegal, it is just a cheeseball place to work.

      (Quote)

  6. Absolutely horrible organization filled with the worst used car salesmen that have IQ less than an 3rd grader.
    If you really want to throw your money away this would be the gig for you.

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  7. Terry Sacka, Edward Tamimi and the Eagle Bullion Group are two timing frauds – They try and hustle investors in Palm Beach County out of their savings, don’t throw your money away. Hopefully these frauds will get what’s coming to them and their unlicensed shop will be shut down immediately – Don’t trust anyone at the Eagle Bullion Group.

    Jay Robert Gould.

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  8. Terry Sacka’s Company Eagle Bullion and four of its employees have been charged with securities fraud by the SEC last year amid allegations they have fleeced investors and made deceptive, misleading high-pressured sales solicitations, which included exaggerated and false profit claims — If you have suffered losses in conjunction with Option 2 Futures and have invested with Eagle Buillion Group, or Terry Sacka’s parent company Cornerstone Asset Metals and believe you have suffered investment losses attributable to stockbroker misconduct at this firm, please contact your Attorney – That’s what we have done – Don’t allow these Ponzi type schemes to rip you off.

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  9. The individual who runs this firm Terry Sacka and his cohort Ed Tamimi are exactly like the phony television evangelists types you see here in Florida and most of the Deep South, with there pandering style and over-the-top sales antics. I went to one of the companies presentations on silver and gold in 2010 and completely agree with the other posters, these guys have zero credibility.

    Don’t get ripped off by their aggressive and “cheap” sales tactics along with their complete lack of expertise on your investments. Cornerstone Asset Metals aka Eagle Bullion Group located in Jupiter, Florida are simple yet effective Ponzi type Schemes.

    Jim Owens

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  10. I was about to invest with Conerstone Asset Metals after seeing them (Terry Sacka) on Christian TV. I noticed that the IRA forms listed Worth Metals and Jim Russo as the dealer and decided to look up Worth Group and Jim Russo and found this website. I asked about the CFTC charges against them and was told that it was the metals were delivered in 29 instead of 28 days and that the issue was cleared up. I am now afraid to invest with them. I did not understand what Terry Sacka was trying to say above. Can anyone tell me more? Are there any good Precious metal IRA companies out there?

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