SEC woes engulf man's associated firms
CHAMPAIGN -- Tim Roth's troubles with the Securities and Exchange Commission have cast a cloud over the future of several businesses associated with him.
The 55-year-old Urbana man has been accused by the SEC of taking more than $6 million from deferred-compensation plans he was advising, and diverting it to accounts and companies under his control.
The civil complaint by the SEC claimed he funneled the money to Champaign-based Mezolink Inc. and Evanston-based VCN Celect.org, among others.
On March 15, the state temporarily suspended Roth's registrations as an investment adviser representative and salesman in Illinois. It has also prohibited him from offering or selling securities.
Roth has until April 14 to request a hearing on that action. If he doesn't seek a hearing, the suspension becomes permanent.
Attempts to reach Roth and his Chicago attorney, Ted Poulos, for comment have been unsuccessful.
Mezolink, a Web and data services company, was preparing to occupy 7,000 square feet on the second floor of downtown Champaign's M2 project. The company already occupied a smaller space on the fourth floor.
The firm employed about 20 people at one point. But its attorney, David Helfrey, notified U.S. District Judge Michael Mihm on March 25 that Mezolink had "insufficient funds to survive" and its employees' positions were being terminated.
Meanwhile, the contractor that was renovating space for Mezolink at M2 is seeking release of money it says it's owed. The Dodds Co. claims it's due about $183,000 for work it did on Mezolink's office and data center and seeks most of that amount from a construction escrow account.
Melia Smith, special-projects coordinator for M2 developer One Main Development, said Thursday there were still items in Mezolink's fourth-floor office "and occasionally people coming and going."
She said Mezolink has a lease on the second floor and "it is unclear how things will develop with regard to that space."
The troubles are also likely to affect Celect.org, which has provided Web-related services to more than 1,200 different groups, most of them associated with college fraternities and sororities. The company has also sought to serve "faith-based" groups.
Celect.org traces its origins to 2004, with the formation of Chapter Communications in Champaign. According to Celect.org's Web site, Chapter Communications had more than 1,000 client organizations by 2006. It opened a Toronto office in 2007 and a New York office in 2008.
That same year it merged with Optimum Interactive (USA) Ltd., and in 2009 Chapter Communications was rebranded as Celect.org.
Celect.org moved its headquarters to the Chicago area in 2010, according to the website.
Roth was identified in the SEC complaint as chief executive officer of Mezolink and a founder and chief strategy officer of Celect.org.
Last week, Peoria attorney Timothy Bertschy was named receiver for Roth's assets and properties, as well as those of Mezolink, Celect.org and other entities owned or controlled by Roth. Among other things, Bertschy will be responsible for preventing "the dissipation or concealment of any funds."
Over the years, Roth has worn many hats in the Champaign-Urbana business community. According to securities department records, he was registered with Edward D. Jones & Co. from 1992 to 1994, worked for Merrill Lynch in Champaign from 1994 to 2001 and worked for First Advisors Financial Group in Savoy from 2002 to 2006.
Since 2001, he has worked for Keysoft, and since 2005, he has worked for Comprehensive Asset Management & Servicing, an affiliate of New Jersey-based Comprehensive Capital Management.
For the last few years, his local base of operations has been a second-floor office at 108 Hessel Blvd., C. According to David Barr of Barr Real Estate, Roth leased about 1,600 square feet there for Keysoft Consulting.
The state securities department described Keysoft as a software developer for the third-party administration of compensation plans.
The SEC complaint states Roth was a registered investment adviser representative for Comprehensive Capital Management from 2007 until Feb. 28 of this year, when his position was terminated.
The complaint alleges that between October 2010 and February of this year, Roth took more than $6 million in mutual-fund shares from deferred-compensation plans of companies that were Comprehensive Capital Management clients.
It further claims he redeemed the shares and funneled the money to companies and accounts under his control or for his benefit.
A January 2010 press release from Celect.org's parent company, Optimum Interactive (USA) Ltd., sheds some light on the nature of the business.
In that release, Tim Roth is identified as the founder and chief strategy officer of that company, based in Newport Beach, Calif. His brother, Tony Roth, was identified as the chief executive officer of Optimum Interactive (USA) Ltd.
At that time, the company claimed to have more than 1,200 clients, and Tony Roth stated in the release that "the awareness of our solutions for collegiate, faith-based and professional community organizations is growing by leaps and bounds."
Optimum Interactive (USA) said it had partnerships with 18 national fraternity and campus-based organizations to provide online organizational network and Internet business solutions.
Tony Roth foresaw the possibility of tremendous growth during 2010.
"We have the opportunity to expand our existing business by 500 percent from approximately 1,200 organizations to over 6,000 organizations representing some 5 million unique members in 2011," he said in the press release.
Tony Roth said Celect.org's platform gave fraternities and other clients the ability "to effectively communicate and raise funds in a transparent, yet safe and secure manner."
In a 2009 Chapter Communications press release, the company described some of the services it provides to fraternities and other organizations.
The services help organizations edit their websites, send emails to members, create sign-up lists and message boards, add photo galleries, pay bills online and view statistics about their websites.
Mezolink was originally known as Integrated Data Security and initially leased space in the Gateway Building in the University of Illinois Research Park. In July 2009, it changed its name to Mezolink.
By 2010, Tim Roth had joined founder Aaron Wagener as a partner in the firm, and Mezolink had moved to the M2 building in downtown Champaign.