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SEC Files Complaint Against Daren L. Palmer and Trigon Group

February 28, 2009 By Paul (Founder, WorkAtHomeTruth) Leave a Comment

Litigation Release No. 20918 / February 27, 2009

SEC v. Daren L. Palmer and Trigon Group, Inc., United States District Court for the District of Idaho (Civil Action No. CV 09-75-S-EJL) (February 26, 2009)

SEC Files Complaint Against Daren L. Palmer and Trigon Group, Inc. for Operating a $40 million Ponzi Scheme and Obtains Orders Freezing Assets, and Appointing a Receiver

The Securities and Exchange Commission filed a Complaint on February 26, 2009, in the United States District Court for the District of Idaho, alleging that Daren L. Palmer (“Palmer”), a resident of Idaho Falls, Idaho, and his investment business Trigon Group, Inc. (“Trigon”), a Nevada corporation, raised at least $40 million as part of a Ponzi scheme that has defrauded at least 55 investors. According to the Commission’s Complaint, from at least 1996 until October 2008, Palmer and Trigon defrauded investors by representing that invested funds would be used in a riskless trading program that earned annual returns of 20 percent or more. The Complaint alleges that Palmer and Trigon sold securities in the form of promissory notes and investment contracts in unregistered transactions, and told investors that their principal would be invested in indexes, S&P 500 options or futures, currency futures and stocks in a way that would generate high returns with no risk. The Complaint alleges that, instead, Palmer and Trigon were using funds put into the program by later investors to pay fictitious returns to earlier investors in a classic Ponzi scheme. The Commission’s Complaint further alleges that Palmer used investor funds to build a partially completed $12 million home in Idaho Falls, Idaho, to purchase snowmobiles, to pay himself compensation of $25,000 to $35,000 a month, and for other personal expenses. The Complaint also alleges that while Palmer told investors he was licensed to sell securities, he has never been licensed to sell securities and that neither Palmer nor Trigon is registered with the Commission in any capacity.

The Commission asked the court to order a preliminary injunction enjoining Palmer and Trigon from future violations of Sections 5(a), 5(c) and 17(a) of the Securities Act of 1933, and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and enjoining Palmer from future violations of Section 15(a) of the Exchange Act. In addition, on February 26, 2009, the court signed an order freezing all assets of Palmer and Trigon and appointing a receiver in the matter.

The Commission acknowledges the assistance of the U.S. Commodities Futures Trading Commission, the Federal Bureau of Investigation, and the Idaho Department of Finance in bringing this action.

http://www.sec.gov/litigation/litreleases/2009/lr20918.htm

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STANFORD FINANCIAL GROUP CHIEF INVESTMENT OFFICER CHARGED WITH OBSTRUCTION

February 28, 2009 By Paul (Founder, WorkAtHomeTruth) Leave a Comment

2/26/2009 United States Department of Justice News Release via the F.B.I. Website:

WASHINGTON – Laura Pendergest-Holt, the chief investment officer of Houston-based Stanford Financial Group (SFG), was arrested today by agents of the FBI’s Houston Field Office on a criminal complaint charging her with obstruction of a proceeding before an agency of the United States, announced Acting Assistant Attorney General of the Criminal Division Rita M. Glavin and Special Agent in Charge of the Houston Division of the FBI, Andrew R. Bland, III.

Pendergest-Holt will make her initial appearance on Friday, Feb. 27, 2009, before U.S. Magistrate Mary Milloy at the federal courthouse in Houston.

According to the complaint, Pendergest-Holt met on Feb. 10, 2009 with representatives of the U.S. Securities and Exchange Commission (SEC) at the SEC’s Fort Worth, Texas, regional office based on an SEC subpoena. According to the complaint, the SEC summoned Pendergest-Holt to testify in its investigation into allegations that SFG and related companies, including the Stanford International Bank (SIB), had defrauded investors and account holders of an estimated $8 billion in deposits.

The complaint alleges Pendergest-Holt made several affirmative misrepresentations to the SEC in order to obstruct its investigation.

Specifically, the complaint alleges that Pendergest-Holt met with several SFG corporate officers in Miami during the week of Feb. 2, 2009, to prepare for her upcoming testimony before SEC staff scheduled a week later. Pendergast-Holt is alleged to have discussed with those corporate officers the SIB’s “Tier III” Portfolio, using a computer-generated pie chart she created. The complaint alleges that the pie chart reflected, among other things, a $1.6 billion loan to a shareholder from the Tier III Portfolio.

The complaint alleges that the following week, on Feb. 10, Pendergest-Holt, accompanied by an attorney, made several misrepresentations under oath to SEC investigators during her testimony, including her alleged failure to reveal that she had participated in the Miami preparation session with SFG corporate officers. Pendergest-Holt also allegedly misrepresented her own preparatory work for the testimony, saying she had met with no one other than the attorney as she worked to ready herself for the session with the SEC.

The complaint alleges further that Pendergest-Holt failed to reveal to the SEC investigators during the testimony session that she was a member of the SIB’s investment committee, or the extent of her knowledge of the bank’s Tier III Portfolio. The complaint also alleges that at no point did Pendergest-Holt reveal that the $1.6 billion loan had been discussed with corporate officers in Miami. When asked by investigators if she served on the SIB limited investment committee, Pendergest-Holt is alleged to have answered “no.”

Pendergest-Holt was interviewed again by SEC investigators on Feb. 17, 2009, in Memphis, Tenn., and, according to the complaint, she continued to obstruct the SEC’s investigation by saying she had no knowledge of the Tier III Portfolio.

The complaint is merely an accusation based on a finding of probable cause by a magistrate judge, and the defendant has not been indicted by a grand jury. The defendant is presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

The case is being investigated by the FBI’s Houston Field Office, Internal Revenue Service-Criminal Investigations and the U.S. Postal Inspection Service. The case is being prosecuted by Trial Attorney Matthew Klecka and Attorney Allan Medina of the Criminal Division’s Fraud Section.

Filed Under: FBI Releases, USDOJ Tagged With: , , , , , , ,

PASADENA TITLE COMPANY OWNER INDICTED FOR ALLEGEDLY DEFRAUDING LENDERS OF OVER $3.4 MILLION

February 28, 2009 By Paul (Founder, WorkAtHomeTruth) Leave a Comment

2/25/2009 Department of Justice News Release via the F.B.I. Website:

Diverted Real Estate Proceeds to Personal Use and Created False Settlement Documents

Baltimore, Maryland – A federal grand jury indicted title company owner Deborah Williams, age 56, of Pasadena, Maryland, today for mail fraud related to a scheme to divert settlement funds to her own benefit, announced United States Attorney for the District of Maryland  Rod J. Rosenstein.

“Mortgage lenders and borrowers depend on title companies to use loan proceeds to repay outstanding mortgages and other debts,” said U.S. Attorney Rod J. Rosenstein.  “Maryland’s Mortgage Fraud Task Force will pursue criminals who rip off lenders and borrowers, and we will seize and forfeit their criminal proceeds.”

According to the 15 count indictment, Williams was the sole officer and director of Day Title, Incorporated, a title company with offices in Severna Park, Maryland, that conducted residential and commercial real estate closings and issued title insurance policies.  The indictment alleges that from April 14, 2005 until May 8, 2008, Deborah Williams used for her own benefit settlement funds from real estate closings that were deposited in Day Title’s escrow account and were intended to pay off the lien holders on those properties.  Williams attempted to conceal her illegal transactions by falsely representing on the settlement documents that her company had paid off lien holders, then sent the falsified settlement documents to the lender by commercial carrier.  In fact, Williams either initiated stop payments of payoff checks that had been disbursed or intentionally failed to mail the payoff checks to the lien holder.

According to the indictment, Day Title’s failure to make the pay offs to the lien holders was not detected until sellers began receiving delinquency notices from their mortgage companies.  The time delay between the settlement and the date when Day Title made the pay offs to the lien holders allowed Williams to replenish the escrow account with proceeds from new real estate settlements.  The indictment seeks forfeiture of $3.4 million, the amount Williams allegedly failed to pay to the lenders.

Williams faces a maximum sentence of 20 years in prison on each of the 15 counts and is scheduled to have her initial appearance in federal district court in Baltimore at 10:00 a.m. on Friday, February 27, 2009.

An indictment is not a finding of guilt.  An individual charged by indictment is presumed innocent unless and until proven guilty at some later criminal proceedings.

United States Attorney Rod J. Rosenstein thanked the Federal Bureau of Investigation for its investigative work and expressed his appreciation to Maryland Insurance Commissioner Ralph S. Tyler for the assistance provided by the Maryland Insurance Administration.  Mr. Rosenstein  commended Assistant United States Attorney Stephen M. Schenning, who is prosecuting the case.

Filed Under: FBI Releases, USDOJ Tagged With: , , , , , , ,
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