Val Southwick, who was convicted of defrauding more than $140 million from hundreds of Utah residents, was quietly paroled last month after serving just ten years, according to KSL News. He pleaded guilty to nine counts of securities fraud, each second-degree felonies, and was sentenced to serve anywhere from 9 to 135 years in Utah State Prison.
Apparently he was a model prisoner.
Mr. Southwick’s case was somewhat infamous in this state because at the time it was the largest Ponzi scheme in Utah history, and because he was so blatant in his use of his LDS faith to convince others to invest.
In its summary of the case the Utah Division of Securities alleged that Southwick “emphasized his membership and ecclesiastical roles in The Church of Jesus Christ of Latter-day Saints during solicitation of meetings with investors.”
“Southwick showed his LDS temple recommend, or mentioned its existence, to several investors, and his office contains LDS ‘memorabilia,’ all of which appeared designed to breed a sense of trust between Southwick and investors.” Investigators said Southwick touted himself as a “respectable LDS gentleman, who was more concerned about the consequences of the after-life than those in this life if he lied to investors.”
The receivership case was finally closed in 2011.
Stay tuned for more information.
As reported on the website Law360, A Utah federal judge on Wednesday approved a $125.6 million final judgment that settled the U.S. Securities and Exchange Commission’s case against Vescor Capital Corp. This judgment apparently relates to the company, not Val Southwick who pled guilty to nine counts of securities fraud in 2008 and was sentenced to serve nine consecutive 1 to 15-year prison terms.
But if you are an investor hoping to get you money back, don’t hold your breath. According to the article Vescor’s receiver, Robert G. Wing of Prince Yeates & Geldzahler, has stated publicly that the money may never materialize. “They did not get $125 million, they got a judgment,” he said. Mr. Wings expects to be able to recover only a small fraction of the money Vescor allegedly took from investors. In his most recent report to the court, Wing said he had recovered just over $5 million, and the legal and accounting fees continue to mount, the Receiver’s lawsuits to recover money from third parties will continue.
Bottom line: nobody wins in a Ponzi Scheme — except maybe the lawyers.
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, one of the Fresno defense attorney, Clifford Dunn 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 “The Dangers of Being a “Finder” – Another Conviction in the VesCor Ponzi Scheme”