The FBI and the U.S. Attorney’s Office in Atlanta has taken the lead in the ongoing investigation of an alleged fraud scheme involving a Gainesville business.
The federal authorities met Monday with Hall County Sheriff Steve Cronic, his staff and officials with the Georgia Bureau of Investigation as the investigation of North Georgia Equipment Sales LLC expanded.
"We had an extensive meeting," Cronic said, adding that his agency would be assisting the federal government. Cronic then referred all calls to the U.S. Attorney’s Office in Atlanta.
Patrick Crosby, a spokesman for the U.S. Attorney’s Office in Atlanta, adhered to federal policy and would not confirm or deny such an investigation.
Col. Jeff Strickland, a spokesman for the sheriff’s office, confirmed the local investigation Friday, saying the company may have victimized investors.
"There does appear to be a number of investors involved, both locally and from other states," Strickland said. "Indications are it’s a substantial amount of money."
Some victims are said to have losses totaling seven figures as a result of the scheme.
Strickland said investigators "do have a person of interest in the investigation, but we are not releasing a name at this time."
The registered agent for the company is Wendell Spell, according to the Georgia Secretary of State’s Web site.
One of the alleged victims, who asked not to be identified, said Spell offered investors opportunities to finance the purchase of large construction equipment that was bound for Dubai, in the United Arab Emirates.
For example, the investor would actually purchase a $300,000 unit with the promise that it would be sold in the Middle East for $360,000 in about two weeks. Spell offered to split the profits with the investor, giving a $30,000 return on a two-week investment of $300,000.
Several investors completed their deals with Spell and received their principal and the profit, according to the source. The transactions went through a company called Cornerstone Investments. No such company with connections to Spell is listed in the Georgia Secretary of State’s corporate listings.
The transactions were made by wire, both into and out of the investors account, the source said.
Spell, said to be about 50 years old, talked often of being "a godly man" and had two copies of the Bible on his desk. The investor interviewed for this story said Spell had answers to every question and often presented business cards of customers in Dubai.
When he contacted potential investors, the deal always was urgent and needed to be consummated within 24 hours.
Spell told investors his personal money was tied up in the large equipment dealership he operated on Aviation Boulevard.
The operation began to unravel sometime in late August or early September when Spell was unable to make good on pending transactions. The investor, who visited Spell’s Gainesville office around that time, was told that the equipment was at the company’s other location in Chattanooga, Tenn., or at a dealership in Kentucky.
At the same time, Spell is said to have begun making payments by check, some of which were returned.
Spell’s whereabouts are not known.