A Maryland broker and his firm have been barred from selling securities and mortgages in the state, Maryland's attorney general announced last week.
Attorney General Joseph Curran said Michael Clott, 34, of Baltimore, and First Capital Mortgage Co. have consented to a permanent court injunction against them dealing in securities and mortgages. The state's five-count complaint alleged that Clott and First Capital, a one-year-old firm founded by Clott, violated the Maryland Securities act by selling unregistered securities and making fraudulent misrepresentations in the sale of mortgage notes.
In addition, Clott allegedly acted as a mortgage, broker without obtaining the proper license from the state and violated an injunction issued in September 1986 banning him from selling securities in Maryland for five years.
In the complaint, the attorney general alleged that Clott diverted nearly $250,000 in funds he was supposed to invest, then used the money to pay creditors. He also is accused of delivering stolen checks to investors when they demanded the return of their investments.
Clott still faces federal charges for transporting stolen securities and wire fraud. If convicted, he could be sentenced to 15 years in prison and be fined up to $500,000.