KNOXVILLE (WATE) – A 6 News investigation has turned up disturbing information from around 90 clients of a Knoxville-based investment company who are asking how their money could have disappeared.
Open Door Investment Club began in 1998 when a few friends in Knoxville pooled their money together to trade stocks in what’s called day trading.
At first, yearly returns were strong. For its 90 investors, there would be several name changes, but the president and treasurer remained the same.
David and Lillian Robertson joined Open Door Investment in 2005. Their investiture was more than $140,000 put aside for their grandchildren’s education.
David even encouraged his late mother to deposit her savings into the club.
Records show Roger Williams was the president and treasurer of Open Door Investments and Dash Holdings. Williams handled all administrative matters personally.
The Robertsons trusted Williams, but never met him. However, when a notice arrived three years ago issuing a moratorium and canceling distributions, they started worrying.
“I don’t know what has happened to [my investment,]” said David Robertson.
The couple received their last statement in March 2011. That’s about the time when David tried to close out his late mother’s $10,000 account to cover her hospital bills.
Williams sent a schedule of 12 disbursement payments. The Robertsons only received two checks amounting to $2,000.
“We messed up royally now, I feel like,” said Lillian.
When David asked Roger Williams to transfer his $140,000 investment to a Northwestern mutual fund last year, two checks were sent for a total of $550.
“I don’t know if he just lost our money or what he’s done,” said David.
Scott Parson’s dealings with Roger Williams are similar. The Knoxville chiropractor says he had never met Williams, despite numerous requests to discuss his investments.
Parson said he tried to withdraw the money, but received a handwritten note saying, “I can’t send the full $500.” Parson suspected his investment of 12 years was falling apart.
“Come clean. Where is it at? Where does it stand? Is it real? Is the money gone?” asked Parson.
We looked over financial records for David Robertson and Scott Parson.
No charts or tables showing how the investments produce returns are among the reports. Bylaws, however, state that Dash Holdings is the custodial company for the administration of self-directed IRA assets.
6 News asked David Lewis, one of Knoxville’s leading financial advisors, to examine the reports sent to club investors.
His analysis is summed up in one word, “troubling.”
“We need to be able to understand a clear way that the investment would make money,” said Lewis. “It basically said, ‘We’re going to make a lot of money for you, but we have not told you how.'”
Williams had his investment company office in a Shelbyville, Kentucky building, but he moved several years ago when he opened a barter business franchise with Tradebank in Louisville and became a franchise owner.
We found Williams in Gatlinburg at a church where he’s been the minister since 2005. After the service, he agreed to an interview.
“Their money had been invested in a company called Tradebank,” he said.
Williams blamed the collapse of Open Door Investment on Tradebank. He said with the cancellation of the franchise in late 2011, all tangible assets were lost, despite his best efforts to recoup the investments.
“Tradebank has basically gone out of business or is going out of business,” he said. “As far as Tradebank is concerned, their investment in Tradebank is pretty much gone… Because they lost their operation, they’ve not been able to keep things going. The franchise investment we had with them has dried up.”
We showed Williams the Robertsons’ request for conversion last year, saying they’d like to have all their money transferred to Northwestern Mutual.
“There is no money to transfer to Northwestern Mutual,” he said.
We talked by Skype with John Davis, the president of Tradebank International, from his office in Atlanta, Georgia.
“Mr. Williams said Tradebank is going out of business. Is that true?” we asked.
“Absolutely, not. We’ve been in business for 27 years. We definitely are not going out of business,” Davis said.
Davis says he terminated Williams’s franchise agreement because of the way he handled clients.
We showed David Robertson our interview with Roger Williams.
I’d like to see his records and see what exactly he has done, how much money he has got,” said Robertson.
Getting answers to those questions is up to state and federal investigators. Williams’s investors told us they have contacted the SEC and Tennessee’s Securities Office concerning alleged irregularities.