Kenneth Eugene Thomas, former owner of RetireAmerica Inc., pleaded guilty April 3 to charges of theft and fraud in a scheme that defrauded investors of more than $3.3 million.
Thomas, 66, of Lexington, pleaded guilty to an amended charge of theft by failure to make required disposition of property over $10,000; five counts of theft by failure to make required disposition of property over $10,000; four counts of theft by failure to make required disposition of property over $300; and fraudulent or other prohibited practices and securities, according to Fayette Circuit Court documents.
Thomas accepted money from clients for investment purposes, but the investments did not exist, and "victims' funds were not invested as believed," investigators found.
A Fayette County grand jury indicted Thomas on the charges in November 2014. Shannon Kay Hurst, 30, was also indicted one count of theft by deception over $300 and one count of violating registration of securities rules; Phillips J. Ash, 36, and Roy Myers, 65, were each indicted on one count of registered securities violations.
The theft by deception over $300 charge was dismissed against Hurst, and the violating registration of securities rules was amended to a $500 fine and $155 in court costs. A status hearing for Ash and Myers is scheduled for May 8.
The indictments were handed down after a two-month investigation by Lexington police.
According to Detective Michael Helsby's request for a search warrant, officers received information from the family of David Grow, including copies of investment bonds totalling more than $1 million that Thomas sold Grow between 2005 and 2012. Helby concluded that the bonds sold to Grow were fraudulent and Thomas "is not registered in the state of Kentucky to sell investment bonds."
Grow and his wife, Joretta Grow, filed a civil lawsuit last year against Thomas. David Grow died last summer,
On Sept. 15, 2014, detectives executed a search warrant and found that Thomas ran a second business, QS Holdings LLC, and moved funds from investors from QS Holdings into RetireAmerica. Checks from RetireAmerica were also being deposited into QS Holdings, documents said.
A bookkeeper told detectives Thomas would move money from QS Holdings to RetireAmerica and spend the money for personal expenses. About 175 people invested in QS Holdings, and many of them also invested in RetireAmerica, the documents said.
Of those investors, only Joretta and David Grow have been named.
A letter written by Joretta Grow's attorney, Howard Downing, says, "I understand that Joretta Grow and the estate of her husband have lost the lifetime savings that she and Mr. Grow had worked so hard to earn."
Thomas is scheduled to be sentenced May 22.