Staff photo by Jade McDowell
Everyone hopes to get in on the ground floor of the next Microsoft or Pepsi, but investing in any start-up company is always a gamble.
Glenn Bradley, of Hermiston, can attest to that. After investing $30,000 in the Inland Pacific Energy Center in 2006, he has yet to see a dime of profit. Last week the state called the operation — in which developer Bob Doughty sold shares in a proposed biodiesel plant in Stanfield — a “communitywide investment scam” and fined Doughty for violating Oregon securities law.
“There are so many scams, I usually can see them, but this one I got suckered,” Bradley said.
Doughty maintains that the plan is not a scam and he still fully intends to build the plant. He says the project was merely delayed by the 2008 financial crisis but his company has come into more money recently and is “ready to go.” Last week he called the state’s investigation “one-sided” and said he plans to fight it in court.
Eleven years after putting in money, however, Bradley has his doubts he will ever see a return on his investment, and he said he knows other investors in the Hermiston area who feel the same way.
Back in 2006, they had a different outlook. Bradley still has the spiral-bound business plan Doughty gave him, full of price estimates from various shippers and suppliers, background information on the biodiesel industry and timelines for permit applications and construction. Doughty showed him newspaper articles about his presentations to the Stanfield City Council, and letters sent to politicians. There was a sign on the property off Canal Road proclaiming it the future site of the Inland Pacific Energy Center. Bradley and his wife knew others in the community whom they respected who had invested.
“Everything looked on the up and up, and maybe it was to begin with, I don’t know,” Bradley said.
But deadlines on Doughty’s proposed timeline came and went, and Doughty still didn’t have the permits or the property to build. Bradley started emailing Doughty and at first Doughty responded, sending information blaming problems like government decisions on ethanol subsidies. Eventually the replies stopped coming.
Bradley said it was a hard lesson to learn, but he’s learned it and he hopes other people learn from his mistakes.
“I don’t really blame him so much as I blame myself,” Bradley said. “Greed gets the better of you, the thought of making big money by getting in on the ground floor.”
The Oregon Department of Consumer and Business Services website has a page with tips about how to avoid investment fraud. Investors should be wary of deals that promise a much higher rate of return than other similar investments, high-pressure tactics stating the opportunity will only be offered for a limited time, a guarantee the investment will not fail, a lack of documents explaining the details of the investment or an unconventional payment method such as a money order. The website also details the riskiest types of investments, including self-directed IRAs, gold, oil and gas, promissory notes, real estate investment schemes, Ponzi schemes and new technology.
“A good rule of thumb with any investment is if you cannot explain the investment, it is probably not good for you,” the department states.
The website, found at dfr.oregon.gov/gethelp/protect-finances/Pages/investment-fraud.aspx, also offers a searchable database to check licenses of investment or insurance companies, and lists a toll-free consumer assistance number at 866-814-9710.
Contact Jade McDowell at firstname.lastname@example.org or 541-564-4536.