State Rep. Pete Beck, R-Mason, was indicted Friday on 16 felony counts related to securities fraud, accused of fleecing investors out of about $200,000.
Beck faces a maximum of 102 years in prison if convicted on all counts in this round of indictments. John W. Fussner, his former business partner, was indicted on seven counts.
Late Friday, Ohio House Speaker Bill Batchelder, Medina, issued a statement calling on Beck to resign from the state legislature.
“It is of the utmost importance that members of this sacred institution protect the public’s trust and be a voice for their district,” said Batchelder. “While there is always a presumption of innocence until proven otherwise, it is my belief that these very serious allegations could cause a distraction to the good work of the Ohio House of Representatives.”
Hamilton County Prosecutor Joe Deters and Ohio Attorney General Mike DeWine, who are jointly prosecuting the case, said in a Friday press conference more charges are possible. A five-year statute of limitations was running so they proceeded with these counts, but DeWine said the investigation is not over.
“The total we’re showing is $200,000 on these charges,” DeWine said. “This is a portion of the story, there is more of the story to come.”
The charges against Beck and Fussner are related to their role in a now-defunct company called Christopher Technologies. Fussner was the company’s president, while Beck was the former chief financial officer. Beck has identified himself in a 2010 disclosure filing as a former CTech owner.
DeWine said the two men knew the company was in dire financial shape, but deceived investors while soliciting them for money, which they then used for other purposes.
Beck, through his attorneys, has always maintained he was just an accountant and wasn’t compensated for his work, and that his CFO title was an empty one.
“I think it’s safe to say the truth is a problem for him,” Deters said.
Earlier this week, Beck’s attorney Konrad Kircher issued a statement anticipating the indictment, saying others are at fault and Beck is a scapegoat.
“The charges are unsupported. Mr. Beck is being blamed for the errors or wrongdoing of others,” Kircher wrote. “The primary target of the investors Tom Lysaght is dead. The secondary target, John Fussner, is bankrupt. Consequently law enforcement, based on inaccurate information provided by investors, has cast a broad net to attempt to remedy the unfortunate business losses of the investors.”
Kircher said Friday he had no additional comments, and that he and Beck are setting a date for Beck to turn himself in for processing. He said it will likely be Tuesday or Wednesday.
Beck, 60, is a certified public accountant and former mayor of Mason. He was appointed to the state legislature in 2009 and was has been re-elected twice since then. Beck represents the 54th District in the Ohio House covering parts of Warren and Butler counties including Lebanon, Turtlecreek Twp. and Mason.
Beck becomes the third state lawmaker charged with a felony within the past two years. Former Democratic Reps. W. Carlton Weddington, of Columbus, and Clayton Luckie, of Dayton, were each sentenced to three years in prison.
Ohio House Speaker Bill Batchelder, R-Medina, last January appointed Beck as chairman of the House Ways & Means Committee, which helps write Ohio’s tax law, just days after the lawsuit against Beck and subsequent investigation by the Ohio Joint Legislative Ethics Committee went public. Beck also sits on the House Finance and Appropriations Committee.
Following the indictment, Ohio Democratic Party Chairman Chris Redfern issued a statement wondering whether Ohio Gov. John Kasich, a Republican, would call on Beck to resign.*
“These charges against Rep. Beck do more than taint just him, they harm the public’s trust in all of state government,” said Redfern, who is also a state representative from Catawba Island.
The charges against Beck are:
- two counts of misrepresentations in the sale of a security;
- two counts of unlicensed sale of securities;
- two counts of fraud in the sale of securities;
- two counts of sale of unregistered securities;
- two counts of selling securities in an insolvent company without full disclosure;
- two counts of making a false statement about the financial condition of an issuer;
- four counts of theft by deception.
Fourteen investors in CTech last January sued a group including Beck, Cincinnati pastor Janet Combs and Combs’ late husband, Thomas Lysaght, who died in 2010.
The investors allege $1.2 million they put into CTech and a related company called TML Consulting, which was run by Lysaght, was instead transferred to Combs’ Cincinnati church, where Beck served as an accountant, or otherwise misspent.
TML Consulting donated $15,000 to Beck’s political campaign, making the company Beck’s single largest nonparty contribution.
Beck counter-sued the investors in February. A judge in March put the case on hold until the criminal investigation runs its course, although a court date in the civil case is set for Monday.
J. Thomas Hodges, an attorney for the investors, said Friday the indictments against Beck and Fussner show his case has merit.
“While my clients will probably never be made whole, there will probably be some justice through this process to make sure this never happens to anyone again,” he said.
*This sentence was corrected to reflect that Redfern did not call on Beck to resign in his statement.
Timeline of Ohio Rep. Peter Beck’s recent legal problems
Sept. 21, 2012: Beck sues his former accounting firm partners Don Donohoo, Jr. and Roger Cupp after they oust him from the firm.
Dec. 12, 2012: The Ohio Department of Commerce Division of Securities Enforcement Unit requests forensic accounting and litigation support help from the Ohio Bureau of Criminal Identification and Investigation while looking into allegations involving Beck.
Jan. 3, 2013: Investors file a $1.2 million civil lawsuit against State Rep. Pete Beck and others in Hamilton County. The lawsuit alleges Beck used his accounting acumen to lure investors into putting their money into Christopher Technologies. It also alleged $15,000 was improperly funneled into Beck’s political campaign.
Feb. 11: Beck files a counter suit against the investors, led by Thomas Walter, claiming the lawsuit is “malicious” and an attempt to extort a settlement. He also filed a motion to dismiss and to strike “vexatious and scandalous” allegations.
Feb. 20: Investors respond, saying they have proof Beck was with Walter and his wife Christine when Beck made false representations about the financial health of Christopher Technologies.
Feb. 26: Co-defendant Janet Combs asks a judge to stay the proceedings until the criminal investigation against her has concluded. She said any further filings in the civil case could incriminate her.
March 7: Beck attorneys Konrad Kircher and Joe Borchelt announce Beck has been cleared of any wrongdoing after an investigation by the U.S. Department of Labor. The federal agency was allegedly looking into some potential pension fund irregularities at Christopher Technologies.
March 28: The civil lawsuit comes to a grinding halt after a judge grants Janet Combs’ request for a stay.
July 19: Beck and Christopher Technologies president John Fussner are indicted on fraud and theft charges.
Recent legal problems for Ohio legislators
April 23, 2011: Rep. Robert Mecklenborg, R-Green Twp, arrested for DUI in Indiana. He resigned from office later that year and pleaded guilty to the misdemeanor. He currently faces losing his law license.
March 13, 2012: Rep. W. Carlton Weddington, D-Columbus, charged with bribery and election falsification for accepting $16,000 in travel and campaign contributions from a phony company set up by the FBI as part of a sting operation, and then introducing legislation for that company. He was sentenced to three years in prison later that year.
Oct. 10, 2012: Rep. Clayton Luckie, D-Dayton, arrested and charged with 45 felonies for stealing $130,000 from his campaign fund. He pleaded guilty three months later and was sentenced to three years in prison.
July 19, 2013: Rep Peter Beck, R-Mason, charged with 16 felonies related to securities fraud and theft. Prosecutors say Beck and a business partner defrauded investors out of at least $200,000. A civil lawsuit regarding the same matter alleges investors were defrauded out of $1.2 million.
More details: Read the indictment documents at myDaytonDailyNews.com