Fraud allegations against Tri-State politician - Toledo News Now, Breaking News, Weather, Sports, Toledo

FOX19 Investigates: Fraud allegations against Tri-State politician

Posted: Updated: Jan 28, 2013 10:44 PM
Konrad Kircher - State Rep's Attorney Konrad Kircher - State Rep's Attorney
State Rep. Peter Beck State Rep. Peter Beck
Thomas M. Lysaght Thomas M. Lysaght
MASON, OH (FOX19) -

FOX19 has learned investigators from the Ohio Department of Commerce's securities division want to meet soon with Rep. Pete Beck (R-Mason), chairman of the powerful House Ways and Means Committee in Columbus that's responsible for writing tax laws. The investigators want to know if Beck did anything illegal as part of a group of businessmen in the Cincinnati area that, court documents say, solicited money for a failed investment operation that cost investors from the Tri-State to DC to Alabama more than $1 million.

Beck's attorney, Mason lawyer Konrad Kircher, tells FOX19 that Beck will answer all of the state investigators' questions and will not "plead the fifth," as it's come to be known when the target of an investigation declines to answer questions out of fear it could incriminate him.

"He's extremely hurt. He's baffled," Kircher said, citing Beck's service in the Marine Corps and his public service in the Mason area since 1997 as evidence of Beck's good character. To underscore just how much this is personally affecting Rep. Beck, Kircher said, "He's not sleeping well."

The investors' allegations have not only launched the state investigation they're also part of a lawsuit filed in Hamilton County, which FOX19 obtained. In the court documents, the plaintiffs' attorney accuse Rep. Beck of committing fraud by making "false representations" to 11 of the 14 plaintiffs.

Rep. Beck, according to the lawsuit, was acting in concert with Thomas Lysaght, who died unexpectedly in November 2010 at the age of 67. Lysaght owned a Cincinnati company called TML Consulting, which provided "strategic planning for businesses," according to Lysaght's former business card.

Court documents say Beck and Lysaght were seeking money from investors for TML Consulting and another company called Christopher Technologies.

"In fact, they were investing in something that was legitimate," Kircher said. "Christopher Technologies was a legitimate company. It produced a product that was an alert system. After Virginia Tech, there was a demand for alert systems for college campuses. Christopher Technologies developed that type of software. In fact, they sold it to Wilberforce University. After that, they couldn't adapt to the market and the company didn't do very well. But it was a legitimate company."

The financial health of Christopher Technologies and TML Consulting --- along with what Beck did or didn't tell people who were thinking of investing --- is at the heart of the allegations against him.

"At the time Beck provided…financial information to potential investors, he was aware, or should have been aware, that the financial condition of both entities was very poor," the lawsuit states.

But Kircher maintains Rep. Beck's involvement with the investment operation was limited.

"Mr. Beck made no representations. He didn't solicit any investments," Kircher said.

Among the investors named in the lawsuit, the biggest loser was Michael Farms, the largest vegetable farm in Ohio, according to its website. Rep. Beck is not accused of soliciting the family that owns the farm. Lysaght and another businessman approached the Michael family, according to the lawsuit. In the end, Michael Farms ponied up $500,000. It's all gone.

An ownership agreement shows that Michael Farms was eventually going to invest a total of $1 million for a 10% stake in TML Consulting.

Each of the investors got worried when they couldn't get any information about how TML Consulting was doing after it had their money. Then Lysaght died on November 15, 2010. After that, some of the investors reached-out to Rep. Beck, the lawsuit says, but couldn't get any information. Kircher argues Beck didn't have any information to offer them.

Meanwhile, state investigators will likely also want to know if any of the investors' money ended-up in Rep. Beck's campaign fund. The plaintiffs' attorney claims in court documents that he's identified $15,000 in questionable donations to Beck's campaign. That includes a $10,000 check in August 2010 from the TML investor account to Beck's campaign, according to the lawsuit.

Kircher says Rep. Beck simply viewed the donations as coming from a business associate's company and believes the donations were legal.

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