Posted on Mon, Jun. 07, 2004
Miami Herald.

POMPANO BEACH

Angry ad kiosk investors claim fraud

Investors nationwide are complaining about a Pompano Beach company that they claim defrauded them out of thousands of dollars.

BY NATALIE P. McNEAL

nmcneal@herald.com


It sounded too good to be true: Invest $50,000 and make more than $100,000 over the next three years.

Hundreds of people around the nation took this offer from a Pompano Beach company, hoping to make big profits by investing in in-store advertising displays at Oklahoma grocery stores. Now some of the investors are saying they're victims of fraud.

''They lied to me,'' said Leo Roland of New York, who said he lost $49,000 in the deal. ``They had no intention of paying me.''

At least 22 people have complained about the company, Success Concepts International, to the Broward Sheriff's Office, Florida attorney general and state Division of Consumer Services.

''It's under investigation,'' said Terence McElroy, spokesman for the division.

Roland said the company told him he could buy an advertising kiosk, which would generate $7,500 a month. Roland would split the money with the company.

In November 2003, Roland paid $49,000 to buy one kiosk, which used a flat screen to display images of commercial advertising.

He said he was told he would earn a guaranteed $3,750 a month on his investment for three years starting in March. It didn't happen.

He said he called the company and was told to wait until May. But he didn't get any money in May.

He was told by company officials, ' `We can't give you your money back,' '' Roland said. ' `If we do that, we'll go out of business.' ''

''I just got taken for a ride,'' Roland said.

Other complaints have come from around the country.

Fraudulent investment schemes are commonplace.

''It's the No. 1 problem in the Union,'' said Don Saxon, director of the Florida Office of Financial Regulation. ``In Florida, because of its large size, we do seem to attract a lot of these types of companies.''

Florida's Division of Consumer Services said it has received 11 complaints since December 2002 about Success Concepts International. The state attorney general's office has received 22 complaints about the company.

If authorities find Success Concepts to be fraudulent, the company could be given a reprimand from Consumer Services or be charged criminally by the state attorney's office.

Success Concepts went out of business three weeks ago. The phone is disconnected and the doors to its suite in an office building in Pompano Beach are shuttered. The building's management company said it moved away three weeks ago and left no forwarding information.

The man who started Success Concepts, David Tarr, said he brought in a president last year to help with the business and he himself was swindled out of money.

''It was a hostile takeover,'' said Tarr, who says he lost everything and is looking for work.

Tarr started the company in 1997, selling point-of-service machines -- the devices used to handle debit- and credit-card transactions at retail stores.

He said he then developed kiosks last year that would sell advertising. But, he said, they also were unsuccessful and the company ran into trouble.

''The advertisers weren't going for it,'' Tarr said.

Tarr said he brought in another president last summer to help with the business, who developed a new, more advanced type of kiosk, but that didn't do well either.

Tarr said investors bought 681 kiosks from his company, but almost everyone lost their money because the products were not a success.

Tarr said he had no idea that the company was closing. He said he had a 36 percent share in the company, and that he's out of money.

''They bankrupted me,'' he said. ``I have integrity. I've been scammed, too.''

Efforts to reach the other executives -- the ones who Tarr says ripped him off -- were unsuccessful.

But investors such as Anne Boykin, of Texas, aren't satisfied with Tarr's answers. This year, she filed suit in a Texas court against the company.

Boykin said she refinanced her home so she could buy six kiosks at $75,000 each, for a total investment of $450,000. She began investing in September 2003. ''I never received a dime,'' said Boykin, who is in the process of selling her million-dollar home.

The victims have started a Yahoo! Groups e-mail community to swap information on how to recover their money.