The federalsavingsllc.com Web site is seen before it was shut down. REVIEW-JOURNAL

Jeremy Stamper, who operated a banklike Web site that solicited investor money for six-month certificates, denies breaking any laws but he believes publicity he received will destroy his business.

Stamper called the Review-Journal late Thursday in response to a Review-Journal story that Washington state securities officials ordered him to shut down federalsavingsllc.com and similarly named Web sites that promised savers 6 percent to 8 percent yields on investments at Federal Savings.

The Web site also suggested Federal Savings was affiliated with First Bancshares, which is similar to names often used by bank holding companies.

Stamper said first Bank of America has frozen $2 million that his financial company deposited at the Bank of America in Las Vegas.

"At that point, (B of A) turned it over to Las Vegas police," Stamper said.

The police now have frozen the money, he said. "I never heard of stuff being frozen by police."

The Las Vegas account was one that he held at several banks, Stamper said. He declined to say how much he had raised since getting his first investments in early February, but Stamper said it was in the "millions of dollars."

Federal Savings is registered with the Nevada Secretary of State and uses the Las Vegas address of its resident agent, Nevada First Holdings, as its business address. Stamper also has an address in Seattle.

The Washington state securities division's March 8 cease-and-desist order said Stamper's "Web sites are misleading giving investors the impression that Federal Savings and First Bancshares ... are insured by the Federal Deposit Insurance Corp."

Stamper said the allegations are subjective.

"We did go for the trustworthy, solid look and feel for the Web site," he said, noting that banks try to create the same impression of security. First Bancshares "is a very, very general name and that was why I picked it," he said. "There's not a single thing on that Web site where I lied."

"If they're getting into the subjectivity of look and feel, they need to get a law that marketing material needs to be approved before we use it," Stamper said.

"I don't know how many times we have to tell people ... we're not a bank," he said about the Web site.

For example, he said federalsavingslic.com identified Federal Savings as a "nonbank" and when visitors clicked on a link labeled "About FDIC," the Web site explained that investors' money was not federally insured at Federal Savings.

Stamper said he planned to use the money sent to Federal Savings to make loans to high-growth Internet companies as an alternative to venture capital funding. He said the certificates he marketed over the Internet were promissory notes.

The Washington securities division order accuses Stamper of violating securities laws, but Stamper rejects that legal interpretation.

A 1933 federal securities law exempted financial products like his from regulatory requirements, Stamper said.

"The advice I was given was the federal exemption trumps anything the state could do," Stamper said.

Stamper said he may ask for a hearing on the order from the Washington securities division. "It may be a joke. It may be a kangaroo sort of court," Stamper said.

Stamper said he did not expect his Internet investment business will continue in business even if he prevails against Washington state.

"I don't think Federal Savings can survive the negative publicity in the regular media and blogosphere," Stamper said, referring to comments made on Internet Web logs, or online journals.

Stamper said regulatory and law enforcement agencies are forcing his Web site investment business to fail and harming investors, by taking action against him and freezing his accounts.

"It's a self-fulfilling prophecy," Stamper said.

David Barr, an FDIC spokesman, said legitimate deposit brokers do provide savers with a way to earn higher yields on certificates of deposit because the brokers pool small savings by a number of individuals and invest in one large jumbo CD of possibly $1 million or more. The larger sum gives them leverage to negotiate high yields on CDs, Barr said.

But other financial Web sites are fraudulent, he said.

"A lot of fake banks out there do things that make (them) sound like a bank," Barr said. "You have to be careful with (financial Web sites)."

If a financial business claims to be affiliated with a commercial bank, Barr suggests the saver look up the name of the bank on the FDIC's Web site. Then, he said, the saver should call the bank to confirm the affiliation.

However, Barr said, the saver should not rely on the phone number provided by the financial Web site, because he could be directed to another participant in a fraudulent scheme.