The Alabama Securities Commission intercepted $16,000 worth of redeemed stock owned by Harry H. “Woody” Duncan from Huntsville, Alabama and successfully rerouted the cash to assist in the payment of restitution to victims of an illegal securities scheme operated by Duncan in 2011. In August 2012, Madison County, Alabama Circuit Court Judge James P. Smith sentenced Duncan to twenty years’ imprisonment for violating the Alabama Securities Act. Duncan is serving the first five years of his sentence, but the latter fifteen years will be suspended on the condition that he make complete restitution to all victims and file sworn quarterly financial reports accounting for the sources of funds used to make the payments.

An investigation by the Commission discovered that, despite the fact that Duncan is in the custody of the Alabama Corrections Department, he received stock dividends, which the Court considers personal assets/income, that should be allocated to pay restitution to his victims.

In January 2015, the Commission’s legal division was notified that a Florida-based corporation was trying to tell all of its shareholders that it was planning to redeem all shares of stock to them. Duncan was identified as a shareholder, and the company was trying to tell him that he would acquire a $16,000 dividend for shares of the stock he had. The Commission filed a motion seeking to enforce the restitution order detailed in Duncan’s sentencing hearing, requesting the Court to order the proceeds of Duncan’s stock redemption to be used for the payment of restitution to his victims. In April, the Court ordered Duncan to endorse the stock proceed check to be applied toward restitution.

In August 2012, Duncan pleaded guilty to one count of Scheme or Artifice to Defraud in connection with the Sale of Securities and to Theft of Property, for which the Court ordered Duncan to serve an extra fifteen year sentence to run concurrent with the fraud charge. The Court also ordered Duncan to pay $512,063 in restitution to seven investors named in the original indictment and $179,000 to an extra victim identified in the Commission’s investigation.

Alabama Securities Commission Director, Joseph Borg, stated, “I want to make it clear to scam artists that, even after financial criminals are prosecuted, our legal and investigative professionals will continue to watch out for the interests of our state’s main street investors by doing everything we can to strip assets from criminals anytime we can, and for no matter how long it takes.”

If you or someone you know has lost money as a result of an investment or Ponzi scheme, please contact Richard Frankowski at 888-741-7503 to discuss your potential legal remedies or complete the contact form.