State sues pair in Ponzi scheme

BANGOR – The Maine Attorney General’s Office has filed a civil suit against a Dexter couple charging that their real estate development company is really a Ponzi scheme that has bilked 130 people out of more than $4.5 million.

The complaint, filed Monday in Penobscot County Superior Court on behalf of the state and Securities Administrator Christine Bruenn, alleges that William and Barbara Gourley, Inc. violated state securities law by illegally selling more than $4.5 million worth of promissory notes to investors over an 11-year period.

The couple also is being sued in U.S. District Court in Bangor by a Millinocket couple. William Lee and Sandra Gallo Lee claim they are owed payments and interest from the Gourleys on the $225,000 they invested between 1996 and May 2003.

The Lees filed their lawsuit in December after they learned from an investigator for the Maine Office of Securities that the Gourleys were being investigated. The Lees are seeking a jury trial, unspecified damages and attorney’s fees.

Information from that federal suit was cited in the state’s action against the Gourleys.

The attorney general’s complaint also alleges that the Gourleys failed to register the notes as securities, made misrepresentations to potential investors regarding the profitability of the enterprise and the risk involved in the investments, and failed to disclose that the notes all were secured by property worth less than $200,000.

The Dexter couple allegedly promised rates of return on the notes of between 12 percent and 20 percent. The only way the Gourleys could meet that promise was to use money invested by new investors to pay interest to previous investors – a classic Ponzi scheme, according to Attorney General Steven Rowe.

Among other relief, the state’s suit seeks restitution for investors, civil penalties of up to $10,000 per violation and an injunction against further sales of securities by the Gourleys.

Criminal charges have not been filed against the Dexter couple.

In a press release about the case, Rowe and Bruenn warned Mainers to be wary of investments promising high rates of return with low risk.

Maine consumers and investors may contact the Office of Securities toll-free at (877) 624-8551 to report questionable investments or sales practices or to obtain information about investments, stockbrokers, financial planners, stocks, bonds, mutual funds, or other investment vehicles.