Attorney General's News Release

September 9, 2004

Sedalia man repays investors more than $40,000 after pleading guilty to securities fraud charges

Sedalia, Mo. — A Sedalia man will repay several Missouri investors more than $40,000 total as part of a sentence handed down today in Pettis County. In March, James Michael Barnes (DOB - 6/21/65) pleaded guilty to four counts of securities fraud and three counts of unlawful merchandising practices. The charges were contained in a grand jury indictment returned last October at the request of Attorney General Jay Nixon.

According to the terms of a plea agreement, Barnes delivered to the court a check for $40,578. The money will be used to repay investors. The sentence also puts Barnes on probation for five years and orders him to perform 500 hours of community service during his probation at a nursing home or other facility or organization serving the elderly. Barnes also is prohibited from selling securities, investments or insurance products during his probation.

Circuit Judge Donald L. Barnes suspended the execution of a sentence of seven years on each of the securities fraud charges and four years on each of the unlawful merchandising practices charges, with the sentences to run concurrently.

James Barnes admitted selling securities and long-term care insurance policies to several elderly Missouri residents and diverting the funds to his bank account in Pettis County. Barnes lived in Warsaw at the time the crimes occurred.

Barnes also misrepresented the return on the investments and the names of the companies issuing the investments and insurance policies. In addition, Barnes failed to tell investors he was not registered with the Missouri Secretary of State's Office to sell securities, and that his license to sell insurance had been revoked by the Missouri Department of Insurance.

The Securities Division of the Secretary of State's Office referred the matter to the Attorney General's Office and assisted with the investigation.

Inquiries from consumers should be directed to consumer@ago.mo.gov or 1-800-392-8222 (from within Missouri) or 573-751-3321 (outside Missouri).

All media inquiries should be directed to Press Secretary John Fougere.

E-mail      Phone: 573-751-8844         Fax: 573-751-5818