MIDWEST CITY man target of $50 million Web scam investigation
Monday, June 4th 2001, 12:00 am
By: News On 6
OKLAHOMA CITY (AP) _ Federal authorities are investigating a Midwest City man accused of running a $50 million Internet scam.
Donald Allen English, 53, is being investigated by both the FBI and federal Securities and Exchange Commission.
Records show he opened EE-Biz Ventures seven months ago, promising to double investors' money in seven to 10 days. The venture closed about three months later.
More than 26,000 investors transferred or deposited more than $50 million into EE-Biz Internet accounts controlled by English, federal officials say.
While many investors got back part of their money, as many as 22,179 investor accounts lost as much as $8.8 million, SEC attorney Douglas A. Gordimer said in a sworn deposition in Oklahoma City federal court.
Federal officials said they don't know much about English, who has refused to discuss the operation.
SEC attorneys have asked a federal judge to find English in contempt for refusing to cooperate and want him fined $5,000 a day and placed in jail for 30 days.
William Federman, English's attorney, argued it would be wrong for the court to use its power to force English to provide information that could later be used against him in a criminal case.
A call to a number listed for English was not answered.
English was nearly destitute as recently as last fall, shortly before he started EE-Biz, records show.
``He had numerous overdue bills, including many overdue credit card bills totaling thousands of dollars,'' Gordimer said.
English was evicted from his Midwest City apartment in September for failure to pay rent and moved instead to a small rental house.
Authorities said English and five other people from across the country hatched the plan for EE-Biz after discussing their own failed investments on the Internet.
Describing itself as a ``Christian-based humanitarian organization,'' the Web site promised to double investors' money with ``virtually no effort'' on their part.
The SEC said EE-Biz rewarded some early investors, but just months after the Web site started investors started getting excuses instead of returns, investigators said.
Shortly before Christmas, English sent out messages asking for more money and saying the FBI forced him to cease operations, investigators say.
Authorities say the message was not true, but less than a month later federal postal inspectors showed up on English's doorstep with a search warrant.
They found a 2000 Ford Mustang GT and a 2000 Ford F-150 pickup in his driveway and thousands of dollars worth of electronics equipment in the house. They also found evidence he had been making payments on property in San Bernardino County, Calif.
The other five chat room founders of EE-Biz also appeared to have profited receiving amounts ranging from $41,167 to $187,000, the SEC said.
They have been listed as ``relief'' defendants in the SEC's lawsuit to try to force them to pay back the money.
Authorities said efforts to recover investor funds have been frustrating, since English won't cooperate and the investors are difficult to track down.