Belmont man charged with running a Ponzi scheme denies allegations
A lawyer for John W. Cranney, the Belmont man who was charged earlier this week by Secretary of State Galvin’s office with defrauding friends and coworkers on loans, denied that his client was running a Ponzi scheme.
“We have reviewed the division’s complaint, and we obviously disagree with the assertion that Mr. Cranney ran a Ponzi scheme,’’ said Thomas Finn, a lawyer with McCarter & English in Hartford.
The state of Massachusetts’s Securities Division accused Cranney of selling unregistered securities in the form of promissory notes to people who invested $10.4 million with him nationwide. In Massachusetts, investors entrusted $1.5 million to Cranney, the state alleged.
Most of the money came from Cranney’s associates at Shaklee Corp., a California company that recruits sales people to sell health and personal care products.
Finn, the lawyer, said: “It’s our position that these were not investments. They were loans.”
He also said it’s always been Cranney’s intent to repay the moneys. Cranney, he said, “fully cooperated with the division, including providing a full day of testimony.”
The Shaklee Corp., in a statement, said, it was “aware of the complaint filed by the Secretary of the Commonwealth of Massachusetts against Mr. Jack Cranney. According to the complaint, the legal action relates to activities that are unrelated to Shaklee’s business. We are strongly against and do not condone the actions of which Mr. Cranney is accused.”
The company said it has suspended Cranney’s rights and privileges as a distributor.
“Shaklee will be monitoring this situation closely and will take further action pending the outcome of additional investigation and/or these proceedings,’’ the statement said.Beth Healy can be reached at email@example.com.