A company whose chairman is Secretary of State Ken Bennett is facing two suits that allege securities fraud and breach of contract

Posted by AzBlueMeanie:

Ruh-Roh! This is the kind of thing that doesn't look good when you are running for office.

The Arizona Republic reports Firm tied to Arizona official sued:

A small building-insulation company whose chairman is Secretary of State Ken Bennett is facing two suits that allege it engaged in securities fraud and breach of contract and failed to pay six employees more than $143,000.

The suits were filed in Yavapai County Superior Court against Prescott-based Global Building Systems.

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The two lawsuits were filed in late March.

In one, Christopher and Cyndi Pronger, who lived in Williamson Valley, allege Bennett and other board members failed to properly monitor James Beavers, who now is the company's vice president.

The couple allege Beavers induced them to invest $57,000 in the firm and move to Prescott, where Christopher Pronger would work for Global Building Systems.

The couple contend they were told Global Building Systems was going public and that the company's technology would be used on homes outside the United States. They were told their investment was "worth a fortune" and would make them millionaires, according to the suit.

But the couple allege Beavers made false representations and that the company engaged in a fraudulent scheme to sell securities. The suit also alleges the company committed fraud to get the couple to relocate to Prescott and breached a contract by failing to repay a $2,000 loan the Prongers made for an executive to travel to South America on company business.

The Prongers could not be reached for comment.

Beavers said he was looking forward to going to trial but declined to answer any other questions regarding the suit.

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Christopher Pronger also is part of the second suit, which alleges the company didn't pay him and five other employees $143,593 in wages.

"The understanding we have of the financial situation is it's pretty dire and things are not getting paid," said Lisa Counters, an attorney who is representing the employees.

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The two suits followed a 2009 suit filed by another former employee, Joe Cintron, who alleged he was owed $25,083 in wages and damages. Cintron could not be reached for comment. Bennett and Beavers said that suit was settled.

Bennett does not believe the lawsuits will hurt his bid to stay in office.

The voters may beg to differ.