State says currency venture is illegal

BOISE – The Idaho Department of Finance has ordered a Coeur d’Alene man to stop running what officials called an investment scheme in Iraqi currency.

The department issued the cease and desist order against Jack Lee Smiley, claiming the former schoolteacher was violating the Idaho Commodities Act when he asked investors to take part in a joint venture to purchase Iraqi dinars.

Smiley’s phone number was not listed and he could not be reached by the Associated Press. The Department of Finance did not have record of an attorney or representative for Smiley.

Jim Burns, the investigations chief of the department’s securities bureau, said Smiley told investors they would make at least 33 times the money they invested when the dinars hit the world market late this summer. The department also alleges Smiley failed to disclose important information about the investment, including risks involved with investing in foreign currencies and that he was not qualified under state code to sell the commodities.

At least two Idaho residents invested in the currency scheme, Burns said.

In general, people should be wary when approached about currency investments or other ventures, he said.

“It’s our anticipation that there will be many types of repatriation schemes or Iraqi rebuilding investment schemes,” Burns said. “Obviously there’s well-organized worldwide markets for foreign currency, but there is not a world market for the Iraqi dinar. So, it’s being sold on (Internet auction site) eBay and in other speculative investments.”

The state issued a separate cease and desist order against Smiley in 2001 for another alleged investment scheme.

In that incident, Smiley was allegedly seeking people willing to invest as much as $100,000 in a book he was writing in exchange for 50 percent returns on any money the book earned, Burns said. Smiley voluntarily complied with the cease and desist order in that case, Burns said.