Man Charged In Multi-Million-Dollar Securities Fraud Case Wants Charges Dropped

Oct. 20--A man charged with multi-million-dollar securities fraud wants those charges dropped and his bond reduced.

Scott Allen Frye , 42, told Circuit Judge Tom Head Monday he has been in the Coffee County Jail on bond since March and asked for clarification of the charges he faces.

He also asked that the charges be dropped because they exceeded the statute of limitation and he asked that his bond be reduced. "I've been locked up for over a year," Frye said. "They have destroyed my life."

Frye was arrested in the Philippines in October 2009 by federal authorities and was returned to the United States. Following extradition hearings in Los Angeles, Frye was returned to the Coffee County jail by 12th Judicial Circuit District Attorney Chief Investigator Dwight Holley and Alabama Securities Commission Investigator Charles Harrison .

He is one of four people charged, and the last to be arrested, in connection with fraud cases that occurred between July 2000 and March 2005 in Alabama, Indiana, Florida, Mississippi and Tennessee. "This is the leader of the pack," McAliley said at Frye's initial court appearance in March." He is a flight risk."

Frye said Monday he was never a flight risk and that he had left the United States before authorities had pressed any charges. He said he never changed his name and had remained in communication with family members while he was out of the country.

"So let me ask, Your Honor, what exactly am I being charged with?" he said.

The indictments speak for themselves, responded Alabama Securities Commission attorney Randy Neill . Neill and Leslie Worrell represented the state at Monday's hearing.

The judge told the attorneys for the state and the defense that he had received a "lengthy, but well written" letter from Frye. After he distributed copies to the attorneys for the state and defense to read, Head said in the third sentence in the first paragraph, Frye had expressed concern about Head being the judge in the case.

After consulting with Frye, defense attorney Cracker Waldrop told the judge they would not request a different trial judge.

Frye's bond had been set at $50,000 on each of five charges of transacting business in unregistered securities in what 12th Judicial Circuit District Attorney Gary McAliley said is the county's first international extradition case. Frye has been called the "Pioneer of Internet Fraud in the United States," McAliley told the court.

Frye is charged in connection with the offer and sale of securities, sale of unregistered securities and the sale of securities by an unregistered dealer involving $3.7 million through the sale of investment contracts, promissory notes and shares of common stock, McAliley said.

The district attorney said previously that Frye and co-defendants Michael A. Von Kanel , Teresa H. Von Kanel and Douglas D. Handley led their victims to believe money from the investments was being used for real estate development in Nassau, Bahamas.

Michael Von Kanel had been a John Hancock life insurance agent who administered employee retirement plans for Century 21, a real estate brokerage firm with offices throughout the Southeastern United States, until his indictment on the security fraud charges in November 2005.

Five real estate agents at the Enterprise Century 21 office had participated in the retirement plan Von Kanel presented. According to the subsequent investigation, Von Kanel had forged the local real estate firm owner's signature on John Hancock loan disbursement forms totaling $139,500. The John Hancock Insurance Company repaid the Enterprise people for their losses, McAliley said.

The Von Kanels and Handley, Michael Von Kanel's father-in-law, were arrested in December 2005 in Hoover and later transported to Coffee County. Their indictment was the result of a joint investigation with the Alabama Securities Commission.

Handley assisted federal security exchange officials with their investigation in 2005 and based upon that agreement, charges against him were dismissed. Both Von Kanels entered guilty pleas and are in prison.

Violations of the Alabama Securities Act are Class C felonies, punishable by not less than 10 years in prison and fines of up to $20,000.

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