Mississippi Court of Appeals says a Jackson developer committed securities fraud. The court is upholding a prior decision by the Secretary of State's Office. MPB's Mark Rigsby reports.
Secretary of State Delbert Hosemann says Daivd Watkins set out to redesign the Belk building at the Metrocenter Mall in Jackson back in 2010. He created a separate company for the project, Retro Metro, and had investors. There was an agreement Watkins would be paid more than a million dollars for his work. He raised $3 million dollars through a private bonding company for the project.
"There are laws involved in soliciting money from five or six individuals in starting a business, "says Hosemann.
When financing was secured in 2011, he immediately paid six investors a total of $400,000, and took nearly $600,000 to fund a project that supported the Meridian Police Department. In 2014, Hosemann found Watkins violated the Mississippi Securities Act, by misleading the people involved in the process about what the money would be used for, and what he would be paid. Watkins appealed the ruling to the state Court of Appeals. The court this week reinstated Hosemann's order.
"You can't use the funds in one deal when you're in another deal," says Hosemann.
Watkins must pay $75,000 in fines, and pay back the nearly $600,000 he divert to the current owners of the Metrocenter project. An attorney for Watkins could not be reached for comment.