That's was Pratt's aha moment. What if he invented a device that protected one's trailer from being stolen while simultaneously guaranteeing that it won't slip off while traveling 70 down the freeway. Which is exactly what Pratt said he did. He established Safety Sentry, Inc. in 2009 and began selling the product. You can even watch him pitch it to the Granbury Chamber of Commerce.
To the 50 or so investors who wound up giving him more than $1 million, he said a lot of things. The product was patented, and the company was in talks with U-Haul and Ryder and very close to inking major deals. He sent an email notifying them that "the Hertz deal is done."
None of that ever happened, at least according to a wire fraud indictment filed yesterday in federal court. Pratt's patent applications were twice denied by the U.S. Patent and Trademark Office. And Hertz had never heard of the guy, according to an affidavit filed earlier by an FBI agent.
Even before the feds became involved, investors had grown suspicious. Robert Yonke and his company, filed an arbitration claim against Safety Sentry after Pratt failed to deliver on his promises. After Pratt failed to pay the agreed settlement, Yonke sued, claiming that not only was Pratt a con artist, he was caught on a wiretap attempting to hire a hit man to settle their dispute.
That plan fell through, and Pratt has bigger problems. He was arrested in January and has been in jail ever since, a U.S. Magistrate Judge Jeffrey Cureton having determined that Pratt was a flight risk, not to mention a potential danger to the community.
Don't let that stop you from visiting the Safety Sentry website to check out the
patented merchandise. But keep your credit card in your wallet. The site tells us the online store is currently closed for maintenance.
|U.S. Attorney’s Office February 01, 2012|
KANSAS CITY, MO—Beth Phillips, United States Attorney for the Western District of Missouri, announced today that a former Lee’s Summit, Mo., man has been indicted by a federal grand jury for defrauding 39 investors in a $3 million Ponzi scheme.
Ronald W. Shepard, 72, formerly of Lee’s Summit, was charged in a 15-count indictment returned by a federal grand jury in Kansas City, Mo., on Tuesday, Jan. 31, 2012.
According to the indictment, Shepard’s company, Safety Solutions USA, LLC, in Lee’s Summit, developed and marketed a trailer hitch called Tow-Safe. A patent request for the trailer hitch safety device was filed, but rejected by the U.S. Patent Office. Shepard also operated a company called The Real Estate in Lee’s Summit.
Shepard received approximately $3,188,765 from approximately 39 investors from January 2006 through December 2009. Shepard returned approximately $1,235,853 to the investors, and lost or spent the rest, resulting in a minimum loss to investors of $1,825,883. Shephard is charged with 13 counts of mail fraud and two counts of money laundering related to the scheme.
Shepard, who prepared tax returns for individuals, discussed their investments and pitched his own companies as investments. Shepard allegedly claimed that investors would make anywhere from a 15 percent to 100 percent annual return on their investment. He allegedly failed to inform potential investors that the state had issued a cease and desist order that barred him from offering or selling any unregistered security.
Shepard allegedly told investors that their money was used to purchase property in Kansas City, the Lake of the Ozarks and Hawaii. Except for purchasing his own personal residence at the Lake of the Ozarks, the indictment says, Shepard did not purchase any real estate. Instead, the indictment alleges that Shepard used investor funds for personal living expenses, to pay other investors, to pay relatives, in disbursements of cash to himself and in real estate ventures.
According to the indictment, many investors liquidated their Individual Retirement accounts or 401(k) accounts and transferred the proceeds to Shepard for investment. Shepard allegedly told investors that if they liquidated retirement funds, thereby incurring penalties, he would refund their initial investment, plus the amount of penalty, plus interest.
The indictment also contains a forfeiture allegation, which would require Shepard to forfeit to the government any property derived from the proceeds of the alleged offenses, including $1,825,883.
Phillips cautioned that the charges contained in this indictment are simply accusations, and not evidence of guilt. Evidence supporting the charges must be presented to a federal trial jury, whose duty is to determine guilt or innocence.
This case is being prosecuted by Assistant U.S. Attorney Kate Mahoney. It was investigated by the FBI and the Missouri Division of Securities.