Horizon Mortgage & Investment may have seemed like smooth operators, and they probably were for quite some time, having swindled at least $72 million from several hundreds of investors since 1997 in Kaysville, Utah according to this Salt Lake Tribune article online. Run by Dee Randall, the “investment company” was recently ruled to be little more than a Ponzi scheme, which makes Randall’s actions fraudulent and illegal, though it doesn’t take an attorney in Utah to see that. Worse still for the investors, Randall filed for bankruptcy in 2010, effectively shortchanging anyone who unwittingly poured money into the scheme get less than 10 cents on the dollar back now.
Investors won’t give up so easily, though, and most have filed a lawsuit with an attorney in Utah “seeking millions in damages.” The suit is pending. But Randall’s scheme was sneaky, even from the beginning, and now, the “U.S. Trustee’s Office has found 20 other companies Randall had been involved with, rental income he had not reported, as well as creditors who were not notified of the bankruptcy filing.”
Serving for a general agent in Utah for Union Central Life Insurance of Cincinnati, Randall “had offices in Sandy, Kaysville, Woods Cross, Fruit Heights, and Logan, where he employed numerous subagents.” The better to trick you with my dear. Pitching life insurance alongside investments, they were already in violation of Utah law according to the lawsuit filed by a forensic accountant who took over Randall’s assets and companies at the request of the court. He found lies and deceit everywhere, but interestingly, there was unexpectedly more.
In his case, Randall didn’t rely totally on lies and secrecy. He actually “disclosed to some investors that he was going to use their money to pay what was due earlier investors,” and “warned that investors shouldn’t put money in they could not afford to lose.” Not only did such disclosures surely make him seem forthcoming and honest, they were what he hoped would pass for getting around securities laws. One attorney in Utah told a victimized couple “that the disclosures made Randall’s operation look like a ‘legal Ponzi scheme,’” according to court records.
But in truth, business lawyer Gregory W. Schulz or really any other attorney in Utah worth her salt could tell you there is no such thing as a legal Ponzi scheme. “Utah law also says it’s illegal to operate a business in a way that defrauds investors,” so Randall wasn’t skirting any laws by disclosing his methods; he was just setting himself up for failure.
Which, depending on how you look at it, will come down with smashing consequences beginning June 30 of this year in the 3rd District Court in Salt Lake City. Randall “faces 22 charges of securities fraud and one of engaging in a pattern of unlawful activity.” As those with a flair for the dramatic might say, “the jig is up” for Dee Randall.