Coin dealer faces state prosecution Account freeze asked in complaint alleging illicit market dealings

Clancy seeks $1.6 million

Regulator says trades sought by author, wife were not carried out

November 22, 1995|By Bill Atkinson | Bill Atkinson,SUN STAFF

Maryland's securities commissioner is seeking to freeze the bank and brokerage accounts of a Camp Springs coin dealer who has yet to account for millions of dollars of investors' money, including $1.6 million from best-selling author Tom Clancy.

In the complaint filed Nov. 10 in Prince George's County Circuit Court, Maryland Securities Commissioner Robert N. McDonald alleged that Richard A. Scott, president of Goldie's Coin and Stamp Center Inc., operated illegally as an investment adviser, bought and sold securities without a brokerage license, and made misrepresentations by guaranteeing rates of return on investments in coins and stock.

In the case of Mr. Clancy and his wife, Wanda, the complaint alleges, stock trades Mr. Scott executed in their behalf were bogus. When Mr. Clancy ordered last month that half his portfolio be sold, the sale was never carried out, the complaint says.

The state is seeking to freeze Mr. Scott's personal bank accounts and a PaineWebber Inc. brokerage account, as well as the corporate accounts of Goldie's Coin and Stamp Center, and to appoint a receiver to account for the roughly $6 million entrusted to him by investors from 1992 through 1994. Of that total, by far the largest amount was from the Clancys.

Currently, the accounts "do not contain sufficient funds to repay the investors the amounts promised," the complaint said. As of Oct. 31, Goldie's PaineWebber account contained $379,774 and Mr. Scott's PaineWebber account contained $28,637.

The complaint also alleges that Mr. Scott has withdrawn $200,000 from Goldie's PaineWebber account since Oct. 1.

On Nov. 2, Goldie's Coin filed for reorganization and listed assets of $1 million and $6.7 million in liabilities. The creditors include Mr. Clancy and his wife, the Calverton School in Calvert County, which says it is owed $479,000, and Dominic J. Lynch of Beaver, Pa., who is claiming $356,973.

A hearing on the state's complaint is scheduled for today, said Mr. McDonald, who declined to comment further.

Wallace Christensen, an attorney representing Mr. Scott, said the state's case is full of inaccuracies.

"There was no fraud here," he said. "Mr. Scott did not benefit financially. He feels badly that some of his customers have lost money. When all is said and done, we will see some evidence of some investments that didn't turn out the way he expected."

Mr. Clancy, a Baltimore native who earned millions from his best sellers "The Hunt for Red October," "Patriot Games," and "Clear and Present Danger" and is a minority owner of the Baltimore Orioles, could not be reached for comment; Mrs. Clancy referred calls to a family spokesman, Scott Stapf, who said the family would make a statement today.

According to the documents, the Clancys, now Calvert County residents, invested $200,000 in Mr. Scott's coin and stamp business, and the rest in stocks bought through Mr. Scott from 1992 through 1994.

In that time, they received only two payments from Mr. Scott in 1993 totaling $49,000, the documents state.

According to Mrs. Clancy's deposition, the Clancys became involved with Mr. Scott in 1992 when Mrs. Clancy met him through a friend at an Orioles baseball game. Over the next several months, she visited Goldie's Coin and Stamp Center, where she bought gifts, jewelry and sports cards, Mrs. Clancy said.

She talked about investments with Mr. Scott, including his investments in coins. Mr. Scott specialized in buying coins and stamps from estates, and he "guaranteed" investors a 15 percent annual return on their money, the documents said. In his conversation with Mrs. Clancy, she said, he also told her he invested money in the stock market.

The Clancys invited Mr. Scott to their home in December 1992, where he explained his investment strategy. He told them he had been returning about 30 percent on money people had given him to invest in the stock market.

At the end of the meeting, the Clancys wrote Mr. Scott a $400,000 check, half to be invested in the coin business and half in stocks. The couple subsequently gave Mr. Scott another $1.2 million to invest in stocks.

Mr. Scott's fee was 10 percent of any profits that they made on the sale or purchase of a stock, the Clancys said.

From 1992 through May 1995, the Clancys placed orders for stock, buying shares of such companies as Apple Computer, Wierton Steel, Intuit Corp., and Baltimore Bancorp, the documents show. The Clancys received quarterly statements from Goldie's Coin, and invoices for the trades.

Friends and relatives of Mrs. Clancy also invested with Mr. Scott, and they, too, are seeking to recover their money, according to the documents.

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