PRESS RELEASE
Department of Securities halts sale of non-existent "Insurance Escrow Contracts"
 
For Immediate Release
Tuesday, September 03, 2002 
 
Contact: Melanie Hall, Deputy Administrator
  Oklahoma Department of Securities
  405-280-7700
 
 
Oklahoma City/////  The Oklahoma Department of Securities obtained a Temporary Restraining Order on Thursday against a Tulsa carpet cleaner selling investors non-existent “insurance escrow contracts” – money supposedly borrowed by major insurance companies to pay claims.

While cleaning carpets, the Tulsa man -- Micheal C. Stokes -- would tell customers they could earn 10 percent to 20 percent returns in three weeks or less by investing in unresolved insurance claims. According to Stokes, the insurance companies would use investor funds to pay unmet claims. Once the claims were paid, the company would return the principal plus interest to the investor.

Stokes told investors that he knew of the escrow contracts because of his work in connection with fire-related insurance claims.

“The insurance companies Stokes claims he represents say that they do not now and have never offered such “insurance escrow contracts, ” said Irving Faught, Administrator of the Oklahoma Department of Securities. “They also deny ever having any affiliation with Stokes.”

The Tulsa County District Court ordered the freezing of Stokes’ assets pending determination of the motion for temporary injunction.

The Department also alleged that Stokes violated securities laws by not telling investors that he plead guilty to one count of making a false statement to a federally insured financial institution and that he is currently under supervised release.

“If someone promises you double-digit returns in two to three weeks, hold onto your wallet,” said Faught. “Promises of fast returns with no risk are the hallmark of scam artists.”

Before investing in any security, investors should always check with their state securities regulator to confirm that the securities are registered. If the securities aren’t registered, investors should research the legitimacy of the company whose securities are being offered prior to investing.

Anyone selling securities should also be licensed by both the state and the National Association of Securities Dealers. To find out if agents are registered or have a disciplinary history, contact the Oklahoma Department of Securities at 405 280-7700 or via the Department’s web site at www.securities.state.ok.us or call the NASD Public Disclosure Hotline at 800-289-9999.
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This press release, and related information, is available on the Securities Commission's web site at securities.ok.gov, by phone at (405) 280-7700, or in writing at:  Oklahoma Securities Commission, 204 North Robinson, Suite 400, Oklahoma City, OK 73102.