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December 11, 2009

Rent-A-Husband indicted on fraud charges

By Mainebiz News Staff

Kaile Warren, the Windham man who made Rent-A-Husband a nationally recognized business, faces three counts of securities violations after a Cumberland County Grand Jury returned an indictment today.

Warren is charged with securities fraud, theft by deception and sale of unregistered securities in connection with the issuance of promissory notes by him and his businesses, Rent-A-Husband LLC and KW Enterprises Inc., according to a release from the Maine Office of Securities in the Department of Professional & Financial Regulation.

Warren allegedly created the impression that his company was financially sound in an attempt to raise funds for his business. The indictment says Warren misrepresented to investors that Rent-A-Husband was an $18 million a year business in 2009 and had a deal with Ace Hardware Corp. It also says he failed to inform potential new investors that his business had existing debt to prior note holders, which grew to more than $1.6 million by August 2009, and that his business could not meet its obligations without continuously selling more promissory notes.

Warren is also accused of using investment money for personal use, such as paying for restaurant meals. In October, Warren and Rent-A-Husband were the subject of a three-part investigative series in USA Today. Warren called into question the reporter's credibility and rebutted the story's allegations; he told other news services that he never misled investors.

The Attorney General's Office will prosecute the case.

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