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Tag: Rolex

  • A PONZI MYSTERY: Trevor Cook’s Faberge Eggs, Iraqi Dinars Missing; Appraiser Braves Elements, Accesses Cook’s Frozen Island Retreat In Canada By Snowmobile

    It’s starting to read like Ian Fleming fare, something straight out of James Bond and “Octopussy.”

    R.J. Zayed, the receiver in the alleged Trevor Cook/Pat Kiley Ponzi scheme in Minnesota, says he did not find Cook’s collection of Faberge eggs when, armed with a court order, he searched Cook’s home in Apple Valley. The precise size of the collection is unclear, but it has been described in court filings as featuring “numerous” eggs.

    The fabulous jeweled eggs also didn’t turn up at the Van Dusen mansion in Minneapolis, which Cook and Kiley used as an office. Potentially “millions” of Iraqi dinars once stored on the third floor of the mansion also are missing, according to court filings.

    Zayed was able to get cursory information on Cook’s island getaway in Canada, though — thanks to a real-estate appraiser who was willing to venture to the Rainy Lake Island property near Fort Francis, Ont., on a snowmobile.

    “Given the difficulty traveling to the island during the winter, however, no other licensed appraisers have been able to make an on-site inspection as of [yesterday],” Zayed said.

    Additional appraisals will be obtained with the spring thaw, presumably in April, “when the weather allows easier access to the island,” Zayed said.

    The Rainy Lake Island property consists of 2.3 acres of land. There are “several structures on the property, including an 1130 square foot log cabin, a guest cabin, docks and sheds,” Zayed said.

    “The dwelling structures are newly constructed and weather tight, but unfinished on the inside. The property is serviced with electrical power supplied by under water cable originating from the Minnesota side of the lake,” Zayed said.

    He estimated that the property was worth about $400,000 to $500,000.

    Cook, who is jailed for contempt of court for not turning over receivership assets, purportedly purchased a submarine to access the island, but discovered the waters were too dark for the submersible craft.

    Because of the unfriendly waters, Cook talked about moving the craft to Panama, whose waters he believed more suited for use of his submarine, according to court filings. The submarine purportedly was purchased on eBay.

    Zayed was able to locate 31 watches in a collection described in court filings as “vast,” including a “diamond studded Rolex watch that Cook gave to his wife and that she maintained in a safe deposit box.” He also recovered a ROM exercise machine that retailed for $14,165.

    Investors in the alleged $190 million scheme may get “pennies on the dollar,” Zayed said.

    Prior to being jailed in January, Cook asked Chief U.S. District Judge Michael Davis for a monthly allowance of $6,679, including a monthly outlay of $105 to cover the expenses of his three housecats and $100 for a gym membership.

    While searching Cook’s home, Zayed seized three automobiles: a 2005 Lexus 33 series; a 2004 Lexus L43; and a 1997 BMW 328ic. He is seeking to auction them off.

    Zayed already has sold a 1989 Rolls Royce; a 2004 Audi RS6; a 1985 Pontiac Fiero “Lamborghini Kit Car”; a 1998 BMW Z3; a 1989 Mercedes 420 SEL; and a 2000 Lexus. The cars, some of which had high mileage, fetched $73,100, according to court filings.

    All buyers were required to “sign a statement certifying that they were not serving as a proxy” for Cook or any other person or entity that is part of the probe, Zayed said.

    Meanwhile, Zayed sold Cook’s large-screen, high-definition TVs and other items such as computers and gambling equipment for “at least” $24,000 — higher than the expected amount, according to court filings. A final accounting of the auction was not yet finalized.

    An inventory of items suggested that the collection featured 10 TV sets with 50-inch screens and two sets with 42-inch screens. Like the car-buyers, the TV-buyers had to certify they were not acting as a proxy.

    The Cook/Kiley entities perpetrated “a massive scheme to defraud and that they never operated as legitimate investment vehicles,” Zayed said, noting that he believes the entities “have no value as ongoing businesses” and that “the value of any ‘investments’ in these entities has a present value of zero dollars.”

    Zayed said the Van Dusen mansion has a “still-confidential buyer” willing to pay $1.6 million in cash for the historic structure. A deal could close next month, if no buyer willing to pay more emerges.

    The property was marketed for $1.995 million, and racked up some big bills for security, repair of furnaces, repair of the alarm system, snow removal, cleaning and other maintenance.

    Cook, Kiley and several companies were implicated in an alleged $190 million Ponzi and forex fraud in November by the SEC and the CFTC. Kiley formerly hosted a show on Christian radio.

  • RECEIVER: Trevor Cook May Be Hiding ‘Millions’ Of Iraqi Dinars, Faberge Eggs; SEC Has ‘Cooperating Witnesses’ In $190 Million Ponzi Case; Cook Wants $105 Monthly Outlay For Housecats

    Alleged Minnesota Ponzi schemer Trevor Cook may be hiding “millions” of Iraqi Dinars once stored on the third floor of the Van Dusen mansion in Minneapolis, according to the court-appointed receiver in the case against Cook and former Christian radio host Pat Kiley.

    Cook also had a “vast” collection of expensive watches and “numerous” jeweled Faberge Eggs that have not been located. He also had access to an unspecified sum of cash from purported “gambling” winnings stored in a drawer in his home, receiver R.J. Zayed said.

    Despite Cook’s access to funds and his refusal to cooperate in the ongoing search for assets, Zayed said, Cook asked U.S. District Chief Judge Michael Davis to approve monthly payments from frozen assets totaling $6,679.

    Included in the request, according to court filings, was a monthly outlay of $105 to cover the expenses of his three housecats,  and $100 for a gym membership.

    Cook had a ROM exercise machine that retailed for $14,165 in his Apple Valley, Minn., home, according to Zayed.

    Zayed now wants to inspect the home, which Cook shares with his wife, Gina Cook, and the housecats, according to court filings. The purpose of the proposed inspection, which requires judicial approval, is to determine if Cook is hiding assets inside the home.

    The filing by Zayed revealed that the SEC has “cooperating witnesses” in the case, identifying them as individuals who saw the assets before they vanished. Zayed said it was possible that Cook learned about the SEC probe in June 2009, and engaged in efforts to hide assets and shelter them from potential seizure by transferring them to family members, including his wife and brother.

    “[Cooperating Witness] #8, a former associate of Trevor Cook, advised that Mr. Cook had millions of Iraqi Dinars located on the third floor of the Van Dusen mansion,” Zayed said.

    None of the Iraqi currency has been located, Zayed said.

  • SPECIAL REPORT: Alleged Colorado Ponzi Schemer Had Criminal Record For Securities Fraud, Previous Bankruptcy Record; Allegations Reminiscent Of ASD/Golden Panda Cases

    EDITOR’S NOTE: This story is about securities and fraud allegations leveled in Colorado against Philip R. Lochmiller and others. The case was brought amid assertions Lochmiller was operating a real-estate Ponzi, although the backdrop of the story is similar to the backdrop of the story on the “advertising” Ponzi allegations against Florida-based AdSurfDaily. Some of allegations against Lochmiller are strikingly similar to the allegations against ASD President Andy Bowdoin. Part of the story backdrop also shares a common venue: Vernal, Utah.

    Lochmiller had a real-estate development in Vernal, which also was home base to the so-called “Arby’s Indians,” a sham “tribe” of which ASD mainstay Curtis Richmond was a member. The “tribe” used the address of a Vernal doughnut shop as the address of its “Supreme Court,” and became known as the “Arby’s Indians” because it held a meeting at an Arby’s restaurant in Provo, Utah, in 2003.

    There are no assertions that the Lochmiller, ASD and “Indian” cases are in any way related or that Lochmiller had any ties to ASD or “tribal” figures. However, ASD members — as well as members of AdViewGlobal (AVG) and Golden Panda Ad Builder (GP) — may find the similarities in the Lochmiller and ASD cases instructive.

    Here, now, the story . . .

    This Rolex watch is an auction item in the Lochmiller case.A Colorado man sentenced to prison in California in the 1980s on state charges of securities fraud was indicted Dec. 15 in Denver on federal charges of securities fraud. Philip R. Lochmiller, 61, of Mack, settled in Colorado after his release from prison and started a new company, prosecutors said.

    That Grand Junction-based company, which first was called Valley Mortgage in the 1990s and is known today as Valley Investments, now is at the center of a new firestorm in a complex Ponzi scheme case that includes spectacular allegations of forgery and real-estate fraud in Colorado, Idaho and Utah.

    Investor losses could exceed $30 million. Also indicted and arrested for multiple felonies in the Colorado case were Philip R. Lochmiller II, 38, of of Olathe, Kansas, and Shawnee N. Carver, 33, of Grand Junction. If convicted, the defendants face dozens of years in federal prison. Each is free on bond, awaiting court appearances and trial.

    Lochmiller II is Lochmiller’s son.

    Certain assets, including a Rolex watch and a vintage 1955 GMC 450 American fire truck, already are being auctioned by a court-appointed receiver to raise money for an estimated 400 fraud victims.

    Family Fraud Affairs

    Records show that Philip R. Lochmiller 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.

    Also sentenced to prison in the California case were Lochmiller’s mother and brother. Jo Alice Lochmiller, Lochmiller’s mother, pitched the California scheme involving a Vista-based company known as Lochmiller Mortgage Co. on TV. She was sentenced to three years.

    Lochmiller’s brother, Stephen Lochmiller, was sentenced to four years, according to news accounts at the time.

    The 1980s scheme operated in the Greater San Diego area and resulted in 1,600 investors being bilked out of a total of $5 million. Jo Alice Lochmiller, who pleaded guilty to 10 counts and was sentenced to three years on the most serious one and given concurrent three-year sentences on the other nine, appealed her sentence.

    Jo Alice Lochmiller argued her intent was not to fleece customers but to raise money for Lochmiller Mortgage. She further argued that she should not be punished for each separate sale of unregistered securities and that her sentence was unfair because it subjected her to double punishment.

    A California appeals court consisting of a three-judge panel unanimously rejected her claim.

    “Because each unlawful sale [of unregistered securities] occurred at different times for different amounts of money to different victims, punishment for each separate sale is not prohibited by Penal Code section 654. A single object, to obtain money, does not bar multiple punishment for separate crimes,” the panel wrote.

    “The situation here is analogous to that of the robber who commits several robberies and claims he had one objective, to gain money,” the panel wrote.

    Citing case law, the panel wrote, “[W]here there are consecutive robberies in several communities . . .  over a period of several hours, a defendant may not bootstrap himself into avoidance of additional penalties by claiming that the series of divisible acts, each of which had been committed with a separate identifiable intent and objective, composed an indivisible transaction.”

    Under Jo Alice Lochmiller’s logic, the panel wrote, a defendant could fleece millions of people and expect to be punished as though she had fleeced only one person.

    “Lochmiller, through her part in the unlawful scheme, took the life savings of a group of elderly citizens,” the panel wrote. “She did so by making separate sales to 11 individuals on 10 occasions over a 3-month period. This was not one act or one indivisible course of conduct. To accept her argument, she could have continued to take the savings of every citizen in San Diego County and be punished no more than if she had done so to one individual.”

    Parallels To ASD

    The Colorado Ponzi case against Philip Lochmiller, his son and Carver is drawing comparisons to the fraud case against Florida-based AdSurfDaily and Georgia-based Golden Panda Ad Builder, the so-called “Chinese” option for ASD members.

    Federal prosecutors said Philip Lochmiller did not disclose his previous felony conviction in a securities case to investors; prosecutors made the same assertion against Bowdoin, adding that Golden Panda President Clarence Busby did not reveal his previous run-in with the SEC in a securities case alleging that Busby was involved in a prime-bank scheme.

    At the same time, prosecutors in the Lochmiller case said both Lochmiller and Lochmiller II had bankruptcy filings that were not disclosed to investors. Busby also had a bankruptcy that was not disclosed to Golden Panda members, prosecutors in the ASD case said.

    At the same time, the AVG autosurf  — purportedly based in Uruguay and now collapsed –  appears to have close Bowdoin family ties and appears to have risen from the ashes of the alleged ASD Ponzi scheme. Prosecutors alleged Philip Lochmiller’s family scheme in Colorado surfaced after his previous scheme in California collapsed and that the Colorado scheme also collapsed.

    Company name changes also are present in both the alleged Lochmiller and ASD schemes, according to court records.

    Feds Outline The Lochmiller Colorado Scheme

    “Between November of 1999 through April 2008, Valley Investments acquired five properties purportedly to develop affordable housing subdivisions,” prosecutors said.  “To finance the properties, Lochmiller and Lochmiller II advertised and solicited investments from individuals by promising a short duration high percent interest rate to be paid monthly. The advertisements characterized the investment as a ‘solid security’ secured and recorded by a Deed of Trust in the investor’s name.”

    The properties were in Colorado, Idaho and Vernal, Utah. With respect to the Vernal property, prosecutors said, Lochmiller, Lochmiller II and Carver “secured at least 12 separate investments, all with purported first Deeds of Trust, on Lot 34, Country Living Park, a lot with a rental trailer.”

    Indeed, prosecutors said, the trio sold 12 “first” positions on the same Utah property. Similar shenanigans were pulled in Idaho and Colorado, and prosecutors alleged that some people bought “first” positions in properties that already had been sold.

    Despite the fact Lochmiller was warned in 2001 by the Colorado State Securites Commission to cease and desist from selling unregistered securities, the scheme continued unabated, prosecutors said.

    In January 2004, “[Philip] Lockmiller and others traveled by air to Cancun, Mexico,” prosecutors said. In February 2004, Philip Lochmiller “caused two wire transfers for $25,000.00 each, one from his Mesa National Bank account and one from his Community First Bank account, to be sent to a recipient in Mexico as a down payment on the purchase of a furnished condominium located in Puerto Aventuras, near Cancun, Mexico.”

    In April and May 2004, Philip Lochmiller made various wire transfers to pay for the condominium in the famous resort area of Cancun, prosecutors said, adding that Lochmiller and his son traveled to Mexico by air at least 18 times.

    “The Lochmillers and Carver continued to misrepresent to investors that the business was thriving, and did not disclose to new investors how their money was being used,” prosecutors said. “Also, because there were not sufficient funds, the defendants did not file all of the Trust Deeds on behalf of investors, and most of the filed Trust Deeds were not the first encumbrance of the properties named and were thus worthless.”

    Carver was charged with notarizing forged signatures of investors for fraudulent releases of Deeds of Trust.

    “Investors should always remember the old saying that if it looks too good to be true, it probably is,” said U.S. Attorney David Gaouette of the District of Colorado. “Unfortunately, there are many people out there who are unscrupulous and tempting potential investors with false claims. Law enforcement will investigate these criminals and our office will prosecute them, but the public needs to be wary and only invest after thoroughly checking out these claims of large profits.”

    A veteran FBI agent said the agency was pursuing financial fraudsters aggressively.

    “These arrests demonstrate the FBI’s continuing commitment to aggressively investigate complex financial crimes, especially when the targeted victims are vulnerable and elderly,” said James Davis, special-agent-in charge of the Denver FBI office.

    Davis lauded victims for their willingness to cooperate in getting to the bottom of the mess.

    “We are especially appreciative of the tremendous cooperation from the victims in this case. The success of this investigation to date is tribute to the combined efforts of our federal law enforcement partners, including the IRS-CID, U.S. Postal Inspection Service, and the U.S. Attorney’s Office in Grand Junction.”

    An IRS agent who specializes in financial crime said the agency was leaving no stone unturned in the case.

    “Money laundering creates an untaxed economy that uses legitimate businesses to conceal criminal activity,” said Christopher M. Sigerson, special-agent-in-charge of IRS Criminal Investigation Unit in Denver. “IRS-CI has the financial investigators and expertise to follow the money and deprive criminals of their gains.”

    He was backed by a colleague in the U.S. Postal Inspection Service.

    “Postal Inspectors partnered with fellow law enforcement agencies in this investigation to assure the arrest of individuals utilizing the U.S. Mail for fraudulent means,” said U.S. Postal Inspector In Charge Shawn Tiller. “This is an offense the Postal Inspection Service takes very seriously.”

    Philip R. Lochmiller faces one count of conspiracy to commit mail fraud and securities fraud, one count of conspiracy to commit money laundering, 20 counts of money laundering and 10 counts of mail fraud.

    Lochmiller II faces one count of conspiracy to commit mail fraud and securities fraud, one count of conspiracy to commit money laundering, eight counts of money laundering and 10 counts of mail fraud.

    Carver faces one count of conspiracy to commit mail fraud and securities fraud, one count of conspiracy to commit money laundering, and 10 counts of mail fraud.