Two Convictions in the Mathon Ponzi Scheme
A long-running Arizona affinity-fraud case targeting members of the Church of Jesus Christ of Latter Day Saints took an important step toward conclusion with the conviction last week of Guy Andrew Williams and his father Brent F. Williams. In 2009 the Williams were indicted on 40 counts of conspiracy, wire fraud, mail fraud and money laundering and last week they were convicted of 38 counts in an action stemming from crimes targeting wealthy Mormons in Arizona and neighboring states beginning in 2002. The verdict capped a two-week trial conducted by visiting U.S. District Judge Jack Zouhary.
According to a 2005 article in the Arizona Republic, the investments offered by Mathon Management Co. founders Duane Slade and Guy Andrew Williams seemed like can’t-miss deals. The young investment stars courted clients and enticed savvy investors across the West to part with tens of millions of dollars.
Investors were promised annual returns as high as 120 percent secured by assets and prime real estate everywhere from the industrial belly of Baltimore to the bright lights of the Las Vegas Strip. Investors, many of whom belonged the LDS Church, told investigators that they had confidence in Slade and Williams because they were former Mormon missionaries would steadfastly guard their clients’ money.
The duo marketed the funds heavily to wealthy LDS church members and friends. So when the state of Arizona accused Slade and Williams of pulling off a $150 million Ponzi scheme, investors were shocked, skeptical and confused. Arizona regulators in April sued to halt two Mathon investment funds and related businesses operated by Slade and Williams.
High-profile victims include ex-Arizona State University and Dallas Cowboys quarterback Danny White. Mathon’s marketing materials listed other high-profile names as “investor references” such as former Brigham Young University and Boston Celtics/Phoenix Suns basketball standout Danny Ainge and real estate investor Ross Farnsworth Jr., son of a former Mesa city councilman.
Investors and other insiders have claims in excess of $79 million in Mathon Fund and $90 million in Mathon Fund I. Many of the unsecured creditors are duplicates because investments were moved between the funds.
When not financing real estate deals or pitching Mathon to potential investors, Slade visited Las Vegas often. From January 2002 to March 2005, Slade wagered more than $2.2 million at the luxurious Bellagio casino, according to the conservator’s report. And as growing evidence pointed to the funds’ collapse, Slade’s visits to the casino became more frequent and costly. He gambled at casinos on 83 days in 2004, and for 45 of the first 64 days this year. His average bets escalated from $2,489 in 2004 to $3,342 during the first two months of 2005. His frequent trips earned him free perks at Bellagio.
For some who were lured by the promise of a financially solid investment offered by the former Mormon missionary, reports of Slade’s gambling trips hit hard.
“I do expect more from dealing with (Latter-day Saints) people,” said David Ruff, one of the fund’s larger investors. “When somebody in the church disappoints you, it stands out more.” Ruff and his Highland, Utah, company, Sweating Bricks Investments LLC, list $1.02 million in unsecured claims, bankruptcy records show.
Copyright 2013 by Mark W. Pugsley. All rights reserved.