Jefferson City, MO (STL.News) – Missouri Secretary of State Jay Ashcroft’s Securities Division ordered John Rallo and his company FFH Holdings LLC to cease and desist after he allegedly sold unregistered, non-exempt securities to Missouri residents.
From approximately August 2015 to June 2016, Rallo allegedly solicited at least six investors — residents of O’Fallon, St. Louis and Wildwood, Missouri — to invest over $1.3 million in his business FFH Holdings. Rallo represented that the investment funds would be used to buy interests in Food For Health International, a Utah business, purportedly in the business of buying and selling coconut powder to, among others, Costco and Sam’s Club.
From approximately March 2016 to March 2018, Rallo received payments back from Food For Health International that totaled more than $1 million. However, Rallo paid only approximately $38,000 in returns to investors. Rallo represented to investors that the then-president of Food For Health International mismanaged the investment funds and they were having financial difficulties. Rallo spent a majority of the invested funds on other businesses he controlled.
“Securities should only be offered by people that are properly registered,” Securities Commissioner David M. Minnick said. “Every securities product offered for sale in Missouri must be registered or qualify for an exemption from registration under Missouri or Federal Law. If you’re unsure about an investment, contact our office before investing.”
The division ordered Rallo and FFH Holdings to show cause why they should not be ordered to pay restitution plus interest, civil penalties and investigations costs totaling more than $1.36 million.
On May 10, 2019, Rallo pleaded not guilty to three counts of honest services fraud in U.S. District Court relating to former St. Louis County Executive Steve Stenger. Stenger recently resigned and pleaded guilty to three federal counts in a pay-to-play scheme following a yearlong, wide-ranging federal investigation. According to the St. Louis Post-Dispatch, Stenger “admitted involvement in five ‘schemes’ as part of his plea, four of which involve frequent donor John Rallo.”