November 23, 1995 in Nation/World

Tom Clancy Makes Bad Investment Author Is Largest Creditor In Securities Fraud Case

Associated Press
 

Best-selling author Tom Clancy, whose novel “Debt of Honor” described an elaborate deceit on Wall Street, now finds he is the biggest loser in a $6 million securities fraud case in Maryland.

Clancy invested $1.4 million of his own money and $500,000 on behalf of a private school in Calvert County, Md., with Richard A. Scott of Alexandria, Va. Clancy and his wife, Wanda, struck up a friendship with Scott during a Baltimore Orioles baseball game in 1992.

Clancy was listed as the largest creditor when Scott’s business, Goldie’s Coin and Stamp Center in Camp Springs, Md., filed for bankruptcy protection earlier this month, said Scott Stapf, a spokesman for the family.

Clancy’s involvement in the cases was reported in today’s editions of The Washington Post and The Wall Street Journal.

The Maryland Securities Division filed a civil complaint against Scott on Nov. 10, alleging dozens of Maryland residents lost money in two investment schemes operated by Scott, who authorities say wasn’t registered to sell securities in the state.

Scott operated two investment programs, one of which guaranteed a 15 percent return through investments in gold coins and stamps while the other was a fund controlled by Scott that invested in technology and pharmaceutical stocks, Stapf said.

Maryland regulators allege Scott said the stock fund had an investment return of 30 percent a year.

Scott’s attorney, Wallace Christensen, wasn’t in his office Wednesday, a receptionist said. But Christensen told the Post that his client didn’t intend to defraud anybody.

“Anyone who is aware of the facts is going to conclude this is just an issue of investments gone awry,” Christensen told the newspaper.

Maryland securities regulators charged Scott with numerous violations, including failure to register securities, operating an unregistered mutual fund and failing to register as a securities broker or investment adviser.

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