Securities Crook Gets 15 Years

     SAN DIEGO (CN) – The president of Argyll Equities was sentenced Monday to 15 years in federal prison for an $82 million investment fraud.
     Douglas McClain Jr., 38, of Savannah, Ga., was convicted in May of all 27 counts of conspiracy, mail fraud, wire fraud, securities fraud and money laundering, the U.S. Attorney’s Office said in a statement announcing his sentence.
     McClain also was ordered to pay $81,731,880 in restitution, and to forfeit ill-gotten gains, including cash, securities, a Florida mansion, a houseboat and diamonds.
     McClain ran a slew of companies under the name Argyll, in San Diego, Calif., Texas, Florida and Georgia.
     “Beginning in at least 2004, McClain conspired with loan brokers to defraud the public, and borrowers, by falsely representing that Argyll was an institutional lender with significant cash to lend to corporate executives and other individuals,” the U.S. Attorney’s Office said. “According to court records, McClain, and others, fraudulently induced corporate executives to pledge millions of dollars’ worth of stock the executives held in publicly traded companies as collateral for loans by falsely representing that the borrowers’ stock would not be sold unless there was a default on the loan.
     “The evidence presented at trial showed that McClain’s entities had no cash to lend and, instead, survived for years by immediately selling borrowers stock on the day after the stock was pledged as collateral. The proceeds from the sale of the stock were used to fund the loans creating the appearance that the Argyll entities had plenty of cash to lend.”

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