Investors looking for high yields should use caution
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Background
January 2007 -- Federal Savings LLC began offering investments in fixed-rate term certificates on the following Web sites: www.federalsavingsllc.com, www.federalsavingssecure.com and www.federalsavingscorp.com. The investments were for six-month certificates with yields of 6.25 percent and 8.85 percent. The minimum investment was $1,000.

March 8, 2007 -- The Washington State Department of Financial Institutions Securities Division issued a cease-and-desist order. After this order, the Federal Savings Web site carried a message saying it was no longer accepting new applications.

Cease-and-desist order put a stop to certificate sales

May 4, 2007 -- Authorities issued a preliminary injunction prohibiting Stamper and the other defendants from using in any way investor funds received by Federal Savings or the other entities; they have also been ordered not to destroy any records. The four Seattle-area banks that are holding funds have been ordered to transfer the money to an escrow account. Court documents indicate that the defendants say they are in the process of accounting for all investor funds and that they have hired a forensic accountant to "provide some assurance that they have accurately identified investors who are entitled to a refund."

Aug. 15, 2007 -- The defendants have until Aug. 15 to provide the accounting to the court. If it doesn't satisfy authorities, a receiver will be appointed to recover and disburse investor funds. No information has been released yet as to whether Stamper will face criminal charges.

Defendants
Several defendants have been named in the case:

1. Federal Savings LLC -- purportedly, a subsidiary of First Bancshares Inc.
2. First Bancshares Inc.
3. JMA Northwest Investments LLC -- purportedly doing business as Federal Savings.
4. Jeremy M. Stamper -- principal of Federal Savings, First Bancorp and JMA Northwest Investments.

Misleading investors
Authorities say the Web sites misled investors by giving the impression that:

1. Federal Savings and First Bancshares are banking institutions.
2. Have significant financial backing.
3. Are affiliated with publicly traded financial institutions.
4. Have an operating history.
5. Are insured by the FDIC.

Authorities also found that neither Federal Savings nor First Bancshares is registered to sell securities in Washington, and that Stamper is not registered as a securities salesman or broker-dealer in Washington.