BOSTON (WWLP) – Administrative charges have been filed against a Maine man for targeting Massachusetts military veterans and service members in an investment scam.
According to a news release from Secretary of the Commonwealth William Galvin’s office, the Secretary’s Securities Division investigated Robert E. Stewart, Sr. of Kennebunk, Maine for defrauding veterans and service members after they invested in his company, Exochain Public Benefit Corporation.
The administrative complaint charges that Exochain claims to be a blockchain company. Investors were told that they would be able to use an application that would allow them to have ownership of their medical records and authorize the records release to approved medical providers. The application would reduce the amount of paper records and provide security to personal information.
Blockchains provide a secure and central location for storing information electronically in digital format. They store the data in blocks that are then linked together via cryptography. It is most commonly used as a ledger for transactions, including crypto currency.
The complaint says that Stewart raised over $1-million in 15 months from Massachusetts residents and used the funds for personal expenses including a down payment on a house and mortgage payments as well as purchases at Home Depot, Target, grocery stores, restaurants, and more than $100,000 in purchases from Amazon.
“This is an especially egregious case of someone preying on investors’ good intentions,” Galvin said. “These investors, many of them young Massachusetts veterans involved in non-profits like Massachusetts Fallen Heroes, were told they were investing in a product that would help other veterans get the medical care they need without compromising their personal information. Instead, their hard-earned money was used for frivolous personal expenses.”
Read the complaint here:
In filing the complaint against Stewart and Exochain, the Securities Division is seeking an order to permanently bar Stewart from the securities industry in Massachusetts, require restitution and compensation for the investors, and impose an administrative fine.