UPDATE ON DECEMBER 2009 SPECIAL REPORT: 3 Figures In Philip R. Lochmiller Sr. Ponzi Case Will Go To Federal Prison; ‘Elderly Victims Were Financially Devastated,’ FBI Agent Says; Case Involving Recidivist Fraudster Drew Comparison To AdSurfDaily

In a case that drew comparisons to AdSurfDaily because of recidivism, undisclosed bankruptcies and ties to Utah, the three principal figures of the Philip R. Lochmiller Sr. real-estate Ponzi scheme in Colorado will be going to federal prison.

Lochmiller Sr., 63, was found guilty in July after a 10-day trial in which the jurors returned the verdicts in three hours. He will be sentenced after a final computation of losses is completed. The case involved a company known as Valley Mortgage Inc. The case involved about $30 million.

Lochmiller Sr. was found guilty of conspiracy, money laundering conspiracy, money laundering and mail fraud.

His stepson, Philip R. Lochmiller Jr., 38 when charged, has been sentenced to eight years in federal prison for conspiracy to commit securities and mail fraud and money laundering. Business associate Shawnee N. Carver, 33 when charged, has been sentenced to two years for conspiracy to commit securities and mail fraud.

Prosecutors announced the sentences imposed on Lochmiller Jr. and Carver yesterday.

“Philip Lochmiller Jr. helped orchestrate an investment scheme which defrauded over 400 victims out of more than $30 million,” said James Yacone, special agent in charge of the Denver FBI office. “Several elderly victims were financially devastated.  [The] sentencing sent a strong message that white collar criminals will not be tolerated.  The FBI will continue to aggressively investigate and seek prosecution against the groups and individuals who defraud unwitting victims out of their earnings.”

Lochmiller Sr. was sentenced to three years in a California state prison in the 1980s after he was charged with 60 counts of securities fraud and pleaded guilty to about half of them. Investors in his new scheme at Valley Mortgage were not told of his history as a securities swindler, federal prosecutors in Colorado said.

Federal prosecutors in the District of Columbia said the same thing about ASD President Andy Bowdoin, who was charged with felonies in Alabama in a securities scheme in the 1990s.

Meanwhile, Lochmiller Sr.’s investors also were not told that both Lochmiller Sr. and Jr. had bankruptcies on their records. Federal prosecutors in the District of Columbia alleged in August 2008 that ASD members and members of a companion autosurf known as Golden Panda Ad Builder were not told about the bankruptcy of Golden Panda President Clarence Busby.

Nor were they immediately told that Busby had a run-in with the SEC in the 1990s and was accused of purveying three prime-bank swindles, according to records.

The Lochmiller case also has a tie to Vernal, Utah, a community to which ASD also has a tie. The Lochmiller case was in part about real estate in Vernal. Vernal is the community in which the so-called “Arby’s Indians” got their start.

ASD mainstay Curtis Richmond was a member of the bogus “tribe” based in Vernal. The tribe, which used the address of a Vernal doughnut shop as the address of its purported “Supreme Court” and was ruled a “complete sham” by a federal judge, got its derisive name because it once held a meeting at an Arby’s restaurant in Provo.

Richmond went on to become a pro se litigant in the ASD Ponzi case, accusing the judge overseeing the case in the District of Columbia of “TREASON” and operating a kangaroo court. Richmond claimed the judge overseeing an unrelated case in Utah owed him $30 million. Other ASD figures later claimed government officials owed them sums ranging from the millions of dollars to the trillions.

Another parallel between the ASD case and the Lochmiller case is the presence of the IRS. ASD’s early deceptions were uncovered by a U.S. Secret Service/IRS Task Force operating in Florida, according to court filings.

“Investment fraud is like a ‘house of cards’; the underlying structure can fall apart at any time leaving many investors in financial ruin,” said Sean Sowards, a top IRS agent working the Lochmiller case.

Sowards is the special agent in charge of the IRS-Criminal Investigation unit in Denver.

“These sentences should remind us that defrauding investors is a serious offense and those who do will be held accountable,” Sowards said.

Both Lochmiller Jr. and Carver testified at the Lochmiller Sr. trial, prosecutors said.

 

 

About the Author

3 Responses to “UPDATE ON DECEMBER 2009 SPECIAL REPORT: 3 Figures In Philip R. Lochmiller Sr. Ponzi Case Will Go To Federal Prison; ‘Elderly Victims Were Financially Devastated,’ FBI Agent Says; Case Involving Recidivist Fraudster Drew Comparison To AdSurfDaily”

  1. Quick note: Another parallel between the Lochmiller and Bowdoin cases is the presence of the interagency Financial Fraud Enforcement Task Force created by President Obama in November 2009.

    Patrick

      (Quote)

  2. Patrick, I think I’m becoming jaded but if there isn’t 50 or 100 million dollars involved, it isn’t really fraud. However, the Vernal Utah area(home of Curtis Richmond and his Arby’s Indians) has only about 20,000 residents and when you look at it in that light, this is probably pretty devastating for the community.

      (Quote)

  3. DL: Patrick, I think I’m becoming jaded but if there isn’t 50 or 100 million dollars involved, it isn’t really fraud.However, the Vernal Utah area(home of Curtis Richmond and his Arby’s Indians) has only about 20,000 residents and when you look at it in that light, this is probably pretty devastating for the community.

    Hi DL,

    Some of the things that have occurred in Utah are at once bizarre and sad. In the Lochmiller case, it was alleged that investors were sold 12 “first” positions on the same Vernal property.

    The Richmond-related “Indian” nonsense didn’t do Vernal any favors, either.

    My guess is that you’re not really jaded — perhaps “resigned” is the more appropriate word — as in resigned to the fact that not even $100 million schemes make many headlines these days, given the Madoff caper and the ready supply of Ponzis and investment-fraud schemes of all stripes in virtually all jurisdictions.

    These events are unprecedented in world history. It’s a sad reality that $20 million and $30 million schemes hardly elicit a media blip these days on the national level.

    Hope you are well, DL.

    Patrick

      (Quote)

Leave a Reply