Crime

Couple accused of posing as securities dealers and swindling investors out of thousands

John Jerome Palczuk
John Jerome Palczuk CCBI

State officials have accused a North Raleigh couple of posing as securities dealers for nearly a five-year period, swindling unsuspecting victims out of tens of thousands of dollars.

John Jerome Palczuk, 60, and Karen Elizabeth Palczuk, 61, who both live at 11629 Midlavian Drive near Falls of Neuse Road, have each been charged with one felony count of securities fraud, one felony count of sale of unregistered securities and one felony count of being an unregistered securities dealer, according to arrest warrants filed Wednesday at the Wake County Magistrate’s Office.

The offenses occurred between June 22, 2004 and April 13, 2009, according to the arrest warrants.

karenelizabethpalczuk
Karen Elizabeth Palczuk CCBI

Investigators with the North Carolina Secretary of State’s Office filed arrest warrants that indicated the Palczuks offered, purchased and sold securities that were not registered under the state’s general statutes. Moreover, the agency says the couple “is not and has never been registered to transact business in the state of North Carolina as a securities dealer,” the warrants said.

While the Palczuks were buying, selling and offering securities, they made untrue statements or omitted facts in an effort not to appear to be misleading, the warrants said.

The couple is accused of selling shares of their company, “JPOV Property,” to investors and then agreeing to repurchase the shares at 115 percent above the original price. Investigators say that between Jan. 1, 2008 and May 31 of that year, the Palczuks suggested to their investors that the project was going well.

The couple failed to tell the investors that two contractors had liens on JPOV’s property, or that three more contractors had filed lawsuits. The Palczuks did not divulge that information to investors until June 1, 2008, according to the arrest warrants.

“The value lost by the investors is greater than $100,000,” John C. Curry, an investigator with the Secretary of State’s office, stated in the arrest warrants.

The Palczuks are in custody at the Wake County jail. They are being held under bails of $100,000 each, according to the warrants.

Thomasi McDonald: 919-829-4533, @thomcdonald

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