Category Archives: LDS Church

New Criminal Charges Filed Against Rick Koerber

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The U.S. Attorneys has office filed a new indictment against Rick Koerber, who is alleged to have run a Ponzi scheme that took in more than $100 million from Utah investors.  Last week a federal grand jury returned a new 20-count indictment alleging that Koerber engaged in widespread investment and tax fraud.

According to an article in the Salt Lake Tribune last week, this new indictment follows a federal judge’s decision in July to throw out a key piece of evidence in Koerber’s case.  ”Assistant U.S. Attorney Stewart Walz previously said the ruling by U.S. District Judge Clark Waddoups affected a “significant” part of an existing 22-count indictment alleging fraud, money laundering and tax evasion by Koerber in his operation of FranklinSquires Cos. and related real-estate investment businesses.”  This ruling meant that prosecutors had to file a new indictment containing small changes to a section of the indictment describing the alleged scheme and artifice to defraud. Continue reading →

Yet Another Local Ponzi Scheme Indictment – Newport Financial

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Michael Smith and his son Quintin Smith have each been charged with six counts of securities fraud and one count of pattern of unlawful activity, all second-degree felonies, in connection with a furniture loan company they owned called Newport Financial.  According to a Salt Lake Tribune article published today they have been accused of “bilking investors of hundreds of thousands of dollars — one while serving as counselor to an LDS stake presidency — in a fraudulent furniture-financing scheme that targeted, among others, a prominent University of Utah football coach.”

The indictment alleges that the Smiths promised a return of 18 percent to gain investments of at least $1.8 million from 18 victims.  Their biggest investor was Norm Chow, the offensive coordinator for the University of Utah’s football team, who invested $500,000. Continue reading →

The Dangers of Being a “Finder” – Another Conviction in the VesCor Ponzi Scheme

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Yesterday William J. Hammons, 66, was convicted of seven of nine criminal charges by a jury in St. George, Utah.   Hammons was one of the largest finders or feeders of investors to Val Southwick and his company VesCor, which is now known as the largest Ponzi scheme in Utah history.  He recommended the investment to members of The Church of Jesus Christ of Latter-day Saints in Las Vegas, where Hammons served as a bishop, and in St. George, Utah.  The St. George investors included neighbors, church members, Hammons’ partner and his parents-in-law.   What he did not tell these people was that in exchange for these referrals he received substantial “referral fees” or commissions from Val Southwick.

In his defense, his attorney, Clifford Dunn (who was an interesting choice because he is not an experienced criminal defense attorney), tried to convince the jury that Mr. Hammons was just an innocent bystander.  According to the Salt Lake Tribune, Hammons testified “that he was unaware that VesCor was a fraud, that he didn’t seek out investors and never officially worked for the company.  Instead, he cast himself as just another investor who was paid only referral fees.”   Continue reading →

Man dupes friend, others out of more than money – ksl.com

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This is a repost of a story that appeared yesterday on ksl.com.

December 16th, 2010 @ 7:33pm

By Jasen Lee

SALT LAKE CITY — For much of his life, Eric Nelson had been a person who saved and planned for his family’s future.

After doing so diligently for more than 20 years, he now finds himself trying to recover from “acute financial stress” brought on by his dealings with an admitted fraudster — a man who turned the lives of Nelson’s family and many others upside down by stealing tens of thousands of dollars from each, not to mention their hopes for better lives.

On Dec. 20, Fasi Filiaga Jr., 49, is scheduled to be sentenced after pleading guilty to four counts of securities fraud. In March, Filiaga was charged with misusing over $2 million in funds from investors, including Nelson, who believed they would receive high returns using trading techniques they would learn from Filiaga.

Nelson said he lost thousands, which has put an intense financial strain on his family, though he is “solvent.”

“I’ve put myself in a bit of a financial crisis (and) I’m still in it,” the 46-year old Lindon father of four explained. “With … some hard work I’ve been able to do some restructuring.” Continue reading →

Do religious people make easy targets for scams?

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The Salt Lake Tribune published an article today on whether religious people make particularly easy targets for scam artists.  The article concludes that they do because “a swindler who professes the same faith, or belongs to the same congregation, has an easy time of earning trust, however misplaced. Duped investors, meanwhile, also hesitate to suspect or report on one of their own.”

The author also quotes a professor from Notre Dame named David E. Campbell,  co-author of the new book “American Grace: How Religion Unites and Divides Us,” who concludes that religious people tend to be more trusting of others.  In an interview, Campbell said “the strong social networks found in some faith communities, such as ‘the tight bonds among Mormons,’ seems to make them especially vulnerable to fraud.”

Just more confirmation of what I have been saying in this blog from day one.

© 2010 Mark W. Pugsley, all rights reserved.