By Dan McCue

CHARLESTON -- Economist and Charleston Southern University professor Al Parish, known perhaps as much for his eccentric wardrobe as for his time-proven acumen as a regional economic forecaster, stands accused of security fraud and could be responsible for the disappearance of as much as $134 million, according to a civil case brought by the U.S. Security and Exchange Commission.

Parish and two of his companies, Parish Economics LLC and Summerville Hard Assets LLC, both of which he co-owns with his wife, Yolanda Yoder Parish, have invested on behalf of at least 300 individuals and entities.

The suit, filed by the Securities and Exchange Commission in the U.S. District Court for South Carolina, Charleston Division, alleges that Parish provided fraudulent statements to some 300 investors, saying that their investments were growing and totaled more than $314 million. The SEC alleges those accounts held less than $230,000 total.

The SEC’s 18-page complaint includes five specific counts of fraud including allegations that at least since January 2005, Parish had provided investors with quarterly statements that grossly misrepresented the investors’ returns and assets, grossly misrepresented the assets of the respective funds under Parish’s control, and grossly misrepresented the rate of return of the respective investment vehicles.

The SEC also accuses Parish Economics of maintaining a Web site fraudulently reflecting positive investment performance by several funds as a means to “lure in new investors and lull current investors,” according to court documents.

In fact, the SEC charges, virtually all of the assets in the funds have been dissipated without disclosure to investors.

So far, no criminal charges have been filed against the director the CSU’s Center for Economic Forecasting or his wife, which means that if he is found guilty, he could face civil fines and penalties but no jail time.

However, as of Easter weekend, when word of the charges broke, federal and state authorities had not ruled out further action, including criminal charges.

Already, at least one creditor, CSU, has filed a civil suit against Parish, his wife and their companies, claiming the flamboyant professor had potentially lost $10.66 million in college funds.

In a written statement, CSU said it had taken legal action against Parish to protect the millions of dollars it had invested in his company. It also said it was continuing to assess the potential impact of losing the money.

“University personnel and student scholarships will not be adversely affected,” the unsigned statement said. “While this situation will require budget adjustments, Charleston Southern has operated in the black for 22 consecutive years and plans to continue to do so.”

The South Carolina Attorney General’s office has also begun an investigation.

In the wake of the charges, which were filed April 5, Charles Van Rysselberge, president and CEO of the Charleston Metro Chamber of Commerce, said in a written statement that the organization was saddened to learn of the charges against Parish, who is a member of the chamber’s board of directors and has long been a “platinum member” of the business group.

Parish also served on the board of the Charleston Regional Development Alliance, as one of the chamber’s appointees.

He also served on the board of the Charleston Symphony Orchestra and wrote columns for The Post and Courier newspaper.

Although he described Parish as a good friend and string supporter of the chamber, Van Rysselberge’s statement went on to assure chamber members and supporters that the organization does not have any funds, either currently or in the past, invested through Parish’s companies.

“I have never known him to promote his businesses or his investment opportunities at chamber meetings or functions. I have never known him to ask the chamber in general or me in particular for anything in return for his support of our organization,” Van Rysselberge said.

The public drama encircling Al Parish actually began on March 29, exactly a week prior to the SEC’s filing of its charges.

Early that afternoon Parish and the chamber’s Mary Graham delivered the group’s 17th annual economic forecast for the tri-county region to an audience of more than 700 at the Charleston Area Convention Center.

The 15-minute presentation was vintage Parish. Decked out in a bright yellow suit, Parish clearly and succinctly offered his forecast for the region’s myriad business sectors, and leavened his statistics with jokes and readily understandable explanations.

However just hours later, while working at his desk at CSU, Parish reportedly began to complain of dizziness followed by a blazing headache, sources told the Charleston Regional Business Journal.

After he complained of blurred vision, a staffer reportedly insisted on driving him to Trident Medical Center. By the time they arrived, sources said, Parish appeared incoherent and to have suffered a complete memory loss.

The hospital would not answer questions about Parish’s condition or even confirm that he had been taken there, citing the federal Health Information Privacy and Portability Act. Members of the parish family did not respond to phones calls or e-mails sent through his Web site seeking information about his condition.

It has since been reported that Parish was moved to the Medical University of South Carolina, but again, due to HIPPAA, the Business Journal was unable to confirm his whereabouts.

But what quickly became clear was that even if fully recovered and was released from the hospital, Parish was not likely to go far.

According to court documents filed by the SEC, Parish’s health setback came after the agency had tried to contact him. The documents reveal he had been receiving requests for information and verification of his claims regarding investments counts he managed for months.

Court documents also revealed that shortly after Parish’s admittance to the hospital, Yolanda Parish, who has power of attorney for her husband and who is an officer and 49% part owner of Parish Economics LLC, instructed their administrative assistant to begin transferring cash into the names of family members in disbursements of a small enough size to avoid government reporting obligations.

The agency told the court that the unidentified assistant refused to make the transfers and was fired. Based in part on those actions, and at the SEC’s request, U.S. District Court Judge David C. Norton froze all assets of Parish and his companies.

Norton also appointed an Atlanta-based financial consultant, Hays Consulting of Atlanta, to seize all of Parish’s personal material assets, all of his business records, both in hard copy and electronic form, insurance policies, all accounting, banking, brokerage and other financial records, computers from the economist’s residence and office and all related passwords, any password or other identifier he used for online accounts, all keys, security and parking cards, and to collect all computer passwords that may have been used by Parish and his employees.

Even Parish’s mail will now be forwarded to the receivership in Atlanta.

David Dantzler, an attorney with Hays Consulting, said Parish’s assets would be moved to a storage facility pending the outcome of the civil complaints. As receiver the consulting firm has 45 days to file a preliminary report on the identity, location and value of assets seized.

CSU asked the court to seize Parish’s hard assets, including a multimillion dollar pen collection, scores of watches, jewelry and unspecified items contained in several safe-deposit boxes.

Reports said Parish’s notable assets range from original Norman Rockwell Paintings to hand-painted Disney animation cells from the 1930s and 1940s to custom-made Mercedes valued at $475,000.

Parish was born in Hollywood, S.C., in 1948, and graduated from the College of Charleston in 1979 with degrees in mathematics and economics. He subsequently served as an assistant professor at the college.

He began investing other people’s money in the mid-1980s, shortly before he earned a doctorate in mathematical economics from the University of North Carolina, Chapel Hill, and has continued to do so throughout his academic career.

He joined CSU in 1990 and was named an outstanding faculty member just two years later after he perfected an economic forecasting model that would become a gold standard for many, including the Charleston Metro Chamber of Commerce.

But it was Parish’s numbers related to the size and success of investment “pools” he oversaw that didn’t add up, federal prosecutors said.

According to the SEC, Parish’s hidden business activities began to unravel in earnest on Feb. 22, 2007.

It was on that date that Michael L. Foster, a staff accountant with the SEC’s Atlanta office, began a routine examination of Battery Wealth Management of Mount Pleasant, and found that 53 of the firm’s clients had invested in various founds managed by Parish through Parish Economics LLC.

Until March 28, 2007, Parish served as vice president of Battery Wealth Management, which so far hasn’t been implicated in the SEC charges.

Documents supplied to Foster by Battery Wealth Management employees claimed that Parish Economics had total assets of $134,394,000, and held $20 million in bonds, $12 million in stocks, $50 million in commodity futures, and $51.11 million in such assets as Swiss watches, jewelry and artwork.

In early March, an SEC compliance examiner requested brokerage statements supporting the reported account valuations, and Parish provided the agency with statements from TD Ameritrade and TradeStation Securities, a bond dealer in Florida.

According to the SEC, as of Dec. 31, 2006, the date on those documents, Parish claimed that two of the funds he offered investors where worth $29 million. However, the brokerage firms that handled those accounts said collectively they were worth less than $100,000.

In addition, Parish is said to have provided information to federal examiners that suggested a commodities pool he controlled had a value of $50 million. As of March 2007, that pool’s value was $130,000, the SEC said.

Founded in 1996, Parish Economics LLC offered investment through four pools—described in the SEC suit as “informal pools of money”—each attached with a different type of asset.  Its hedge income pool invested in government and high-grade corporate bonds; while its stock pool was geared to high stakes growth stocks.

Parish’s future’s pool provided small investors with entrée into the futures and options market, while his hard assets pool invested in such items as expensive watches, gemstones and art.

The minimum required investment to participate in the hard asset pool as $50,000. The minimum investment in Parish Economics LLC’s other pools was $5,000.

Summerville Hard Assets LLC, founded in August 2005, purported to invest in various hard assets, such as jewelry and collectibles.

The minimum required investment in the Summerville pool for groups of investors was $500,000. The minimum required investment in the fund by individuals was $50,000.

Parish’s Web site claims that the annual mean rate of return was 32% for the futures pool, 42% on the stock pool and 34% on the hard asset pool.

“Since at least January 2005, those claimed returns have been fictitious,” the SEC said.

Parish served as president of both limited liability companies.

Among the other high-profile entities that invested in Parish Economics LLC was the Charleston Digital Corridor, the nonprofit foundation whose mission is to attract, nurture and promote technology-based investment in the Lowcountry.

Toward that end, the Digital Corridor Foundation established a corridor fund of privately contributed funds to assist high-tech start-up companies. The fund is separate from the Digital Corridor’s operating budget, contains no public monies, and currently totals $35,000.

In a written statement, the Digital Corridor said it invested all of that money with Parish Economics LLC.

“It is my hope this matter is resolved in such a manner that the foundation recovers all its monies,” said Ernest Andrade, executive director of the Digital Corridor. “This matter will have absolutely no impact on the daily operations of the Digital Corridor or its ability to serve the businesses that comprise our knowledge-based economy.”

Parish or his representatives have been ordered to appear at the federal courthouse downtown on April 13 at 10 a.m.

A hotline has been set up for those who have invested with Parish and want more information.  The number is (404) 926-0059. Additional information can also be found online at  www.haysconsulting.net.

As for Parish, his friends and longtime associates still hope for the best.  

“We hope that the medical and business challenges facing him and his family can be addressed as quickly as possible for everyone’s benefit,” Van Rysselberge said.

Sheila Watson contributed to this report.