Attorney General's News Release

March 2, 2004

Clinton man pleads guilty to fraud, agrees to repay $40,578 to investors

Sedalia, Mo. — A Clinton man has agreed to repay several Missouri investors more than $40,000 total as part of a guilty plea entered Monday (March 1) in Pettis County. James Michel Barnes (DOB - 6/21/65) pleaded guilty to four counts of securities fraud and three counts of unlawful merchandising practices contained in a grand jury indictment returned last October at the request of Attorney General Jay Nixon.

The Pettis County Circuit Court deferred sentencing for 180 days. Under the terms of the plea agreement, if Barnes repays $40,578 at the time of sentencing the Attorney General's Office will recommend that the court:

• Place Barnes on probation for five years;
• Order him to perform 500 hours of community service during his probation period at a nursing home or other facility or organization serving the elderly;
• Prohibit him from selling securities, investments or insurance products during his probation; and
• Suspend execution of sentence of seven years on each of the securities fraud charges and four years on each of the unlawful merchandising practices charges, with the sentences to run concurrent.

If Barnes does not repay the money at the time of sentencing, the Attorney General's Office may recommend any sentence up to and including a maximum sentence of seven years in prison.

Barnes admitted selling securities and long-term care insurance policies to several Missouri residents and diverting the funds to his bank account in Pettis County. Barnes lived in Warsaw at the time the crimes occurred.

Barnes also misrepresented the return on the investments and the names of the companies issuing the investments and insurance policies. Barnes also did not tell investors he was not registered with the Missouri Secretary of State's Office to sell securities, and that his license to sell insurance had been revoked by the Missouri Department of Insurance.

The Securities Division of the Secretary of State's Office referred the matter to the Attorney General's Office and assisted with the investigation.

Inquiries from consumers should be directed to consumer@ago.mo.gov or 1-800-392-8222 (from within Missouri) or 573-751-3321 (outside Missouri).

All media inquiries should be directed to Press Secretary John Fougere.

E-mail      Phone: 573-751-8844         Fax: 573-751-5818