Sworn in to his third term Monday, state Rep. Peter Beck now faces an ethics investigation by the Ohio House because of a civil lawsuit alleging he participated in a fraud that cheated investors out of more than $1.2 million.
House Speaker William G. Batchelder told The Enquirer that the Joint Legislative Ethics Committee, which he chairs, will look into the case that was filed against Beck and others last week in Hamilton County.
“The allegations I think are untrue and are an injustice,” Beck, R-Mason, told The Enquirer. “It’s been very hard on me.”
He referred all other questions to his attorney, Konrad Kircher of Mason. Kircher said he is preparing a counterclaim against those who sued Beck and will file it within a month. He called the lawsuit frivolous and said it defames Beck’s character. He would not say how much Beck would seek in damages. Kircher said Beck lost money in the investment deal.
Kircher also told The Enquirer that an attorney then associated with the suit sent it to Beck in February “trying to extort money” through a settlement. Kircher said Beck refused to settle.
No criminal charges have been filed in the case, but Batchelder said that doesn’t matter to the House. The allegation is sufficient for the ethics committee to launch its own investigation. The speaker said he did not know a lot about the case.
When asked if the House takes the allegation seriously, Batchelder, a former common pleas and appellate court judge, said, “We sure do.”
The issue will likely be sent to the legislative inspector general, who investigates such cases then makes a recommendation to the committee. A House member who violates ethics rules can be reprimanded, censured or expelled. Beck, an accountant and former mayor of Mason, represents Ohio’s 54th House District, which includes parts of Warren and Butler counties.
The suit, filed Thursday by 14 investors – many from Hamilton, Butler and Warren counties, and others from Pennsylvania and Alabama – accused Beck, the Milford accounting firm of Donohoo, Cupp, Beck & Associates, Ark by the River Fellowship Ministry and others of defrauding them by taking their investments and spending that money instead on personal and other non-business items.
At least $15,000 of the defrauded money, the suit alleges, went to help Beck win election in 2010. The suit said checks for $5,000 and $10,000 were written to Beck’s campaign.
“Beck was the accountant that I would say was primarily responsible” for helping hide the alleged frauds, said Cincinnati attorney J. Thomas Hodges last week after filing the suit. “He wasn’t just the accountant. He solicited.”
Beck, the suit alleges, was the chief financial officer for startup software company Christopher Technologies, but also solicited investments and sold ownership in the company. The suit alleges the money was solicited for several entities but that little of it was used for the declared purposes. It also alleges investors were misled about what actually was the “poor” financial conditions of the companies in which the money was to be invested.
“The investors were sophisticated people,” Kircher said. “They were doctors and stock brokers. They’re not going to rely on anything Peter Beck said, and Peter Beck didn’t tell them anything.”
Kircher said Beck never solicited investors nor got paid the $36,000 for his services to Christopher Technologies. Kircher also said Beck never asked for the campaign donations and was unaware of them.
The suit asks that investors be repaid. It also seeks unspecified compensatory and punitive money damages.