Investment fraud targeted elders, Galvin says

Galvin charged Economic Development Finance Corp. and Economic Development Funding Corp., both of Dedham, and Boston South Financial Inc. in Hingham with fraudulently selling speculative promissory notes , mostly to retirees, while falsely representing the notes as being guaranteed investments. Galvin said roughly $3.5 million of the notes were sold.

Robert Blaisdell, president and owner of Boston South Financial, told unqualified investors “stories’’ about how several Central Massachusetts housing projects were being backed with guaranteed funds, according to Galvin, who also said Blaisdell earned $131,000 from Economic Development for the sales of the notes in 2008. Blaisdell was also charged.

According to a release from Galvin’s office, one customer, 86, bought more than $700,000 worth of the promissory notes - 90 percent of the customer’s net worth. “The sales practices were unacceptable,’’ Galvin said. “Our goal is try to get investors back their money.’’

According to the complaint, Boston South Financial acted as an unregistered broker, trolling for customers at retirement homes and senior centers to raise funds to pay for Economic Development’s projects.

The charges, which were filled yesterday, alleged that Economic Development has been selling the high risk notes since 2002. Two-thirds of the notes were sold to seniors.

An employee who answered the phone at Economic Development Finance’s Dedham office said all questions were being directed to the firm’s lawyer, David H. Gibbs, a partner at the law firm Bowditch & Dewey in Worcester. Gibbs did not return messages seeking comment.

A message left for Blaisdell at a former employer was not returned.

“They preyed on these folks’ desire for a secure, guaranteed return,’’ Galvin said. “There is no such thing as a guaranteed return.’’

Sean Sposito can be reached at ssposito@globe.com.