EMO In Trouble??

Here is the press release from the Attorney General of Texas on EMO, the official link:

Monday, March 13, 2006
Attorney General Abbott Files Emergency Action To Protect Clients Of Unlicensed Online Payment Service

EMO Corp. and officers cannot account for $2.4 million in customer cash

AUSTIN - Texas Attorney General Greg Abbott has obtained an asset freeze and emergency approval for a court-appointed receiver to take over the operations of unlicensed Austin-based online payment service EMO Corp.

The company and its officers, Todd L. Tredeau, Tracey Jones and Nancy C. Humphries cannot fully account for more than $5.4 million that consumers placed into their accounts. The company’s books show they have only $3 million cash on hand, which means EMO cannot account for $2.4 million belonging to its customers. The officers failed to register with the Texas Banking Department and obtain a license as a “money services business,” as required by law.

“These officers must account for their outrageous mismanagement of consumers’ money, which they promised would be secure,” said Attorney General Abbott. “The court’s appointment of a receiver to seize control of this company’s assets will provide an opportunity to determine where this money has gone.”

The company’s Web site, www.emocorp.com, touts the service as a safe way to conduct financial transactions online, as a service to assist consumers who are recent victims of fraud and businesses that handle payrolls.

Consumers who open accounts with online payment services can deposit money into their accounts via credit cards or bank transfers and expect instant access to their accounts. The consumer uses the service to send or receive money to and from other members via electronic transfers. According to information given to the Department of Banking by EMO Corp., the company has a current customer base of 17,000 nationwide, with 6,000 of these in Texas.

The Banking Department denied EMO a license for failure to meet minimum net worth requirements of $500,000 and other statutory requirements. Furthermore, according to the company’s own financial statements presented to the Department of Banking, the company is insolvent.

Upon investigation following the asset freeze, the Attorney General will seek restitution to any consumer harmed by these transactions, as well as civil penalties and attorneys’ fees.