BRENTWOOD — The state is taking legal action to protect investors who claim they lost tens of thousands of dollars in deals with a Salem man who is facing jail time for securities fraud.

Secretary of State William Gardner has filed a complaint against Michael Bates seeking an injunction to prevent him from conducting any securities business.

Bates, 44, was sentenced on June 14 to at least six months in jail after a Rockingham County jury found him guilty of a felony securities fraud charge accusing him of making various misrepresentations when he solicited a friend to invest in a business.

A judge ordered Bates to pay $50,000 in restitution to the victim and prohibited him from engaging in the sale of securities or receiving monetary investments from third parties during his probationary period.

In an unrelated civil case, the town of Salem also took Bates to court to force him to clean up an estimated 2,000 inkjet printer boxes and other debris piled up around his property at 45 Maclarnon Road. The printers were part of an ink cartridge recycling operation, but had become an eyesore and source of complaints.

Salem man at center of printer pile mess sentenced to jail in securities fraud case

According to the Bureau of Securities Regulation, the state began investigating Bates in 2015 after receiving a complaint alleging he was investing money on behalf of others and wasn’t adhering to his projections or providing information about where the funds were being invested. During the investigation, the state determined he had made several “material misrepresentations and omissions” in connection with the sale of a security to two New Hampshire investors.

Bates agreed to pay $35,000 in restitution, a $10,000 administrative fine, and $5,000 to cover the cost of the state’s investigation.

According to the state’s complaint filed Wednesday in Rockingham County Superior Court, Bates still owes $19,500 under that agreement.

In 2016, the state received a complaint from another New Hampshire investor who said Bates defrauded him of $50,000 in the fall of 2015.

The Bureau of Securities Regulation then issued an administrative order against Bates in April 2017 requiring him to pay monetary penalties and restitution totaling $117,000.

The case involving the victim who lost the $50,000 led to the criminal case that resulted in the recent conviction.

Meanwhile, the bureau is also investigating three additional complaints against Bates alleging losses of more than $42,000 that could result in additional administrative charges. Bates has denied the fraud allegations in the new complaints.

According to the state’s complaint, Bates is in the process of selling a multi-family property in Lowell, Mass. The state wants the court to issue an injunction requiring him to hold all proceeds from the sale in a trust.

“The proceeds of this sale may be the only funds available to pay the $19,500 still outstanding under the prior consent order, the tens of thousands of dollars that the bureau is currently seeking under the pending administrative actions, or to satisfy any judgments that may be rendered in the future with respect to the three additional complaints that have not been fully investigated yet,” the state wrote in its complaint.