Father, son used Mormon connections to commit $220M Ponzi scheme

KSL.com ^ | Dec. 16, 2011 | Christian Probasco

[Colofornian]

FOUNTAIN GREEN, Sanpete County — FBI agents closed a prominent real estate management business here Thursday and began removing documents pertaining to the investigation of what the U.S. Securities and Exchange Commission calls a “$220 million Ponzi scheme.”

The SEC claims Wendell and Allen Jacobson used their LDS Church membership to gain the trust of investors.

SEC agents also removed documents from the home of Wendell Jacobson, 58, owner of Management Solutions, who lives across the street from the company’s headquarters.

Federal Judge Bruce S. Jenkins granted an SEC request for a restraining order against Jacobson, and its request that Management Solutions’ assets be "frozen" while their investigation is under way.

A statement by the SEC says Jacobson, and his son Allen, 33, “offer investors the opportunity to share ownership of large apartment communities in eight states," but instead "are merely pooling the money raised from investors into large bank accounts from which they are siphoning money to pay family expenses and the operating expenses of their various companies.”

A civil complaint filed in U.S. District Court alleges the Jacobsons have been engaged in fraudulent practices since at least 2008 and says the father and son “appear to be using their membership" in The Church of Jesus Christ of Latter-day Saints to make connections and win over the trust of prospective investors. Wendell Jacobson is bishop of a Snow College student ward.

"The Church of Jesus Christ of Latter-day Saints encourages its members to be honest in their dealings and conduct themselves with integrity," church spokesman Scott Trotter said Friday. "When someone preys upon the members of a congregation or community in order to get personal gain, it is a reprehensible betrayal of confidence, and its perpetrators are rightfully subject to criminal prosecution."

The father and son “raised more than $220 million from approximately 225 investors through a complex web of entities under the umbrella of Management Solutions, Inc.,” the SEC alleges.

“Wendell and Allen Jacobson misled investors to believe they were financially supporting what was portrayed as a widespread and reputable operation to revamp apartment communities and turn a significant profit,” said Ken Israel, director of the SEC’s Salt Lake Regional Office. “Their promises were anything but truthful.”

FBI agents combed through the records of Management Solutions through the night and into Friday morning. Vans were on hand to haul off documents.

The SEC says the father and son “used alleged ‘sales’ as a means of shifting investors into and out of certain properties.” It says most investments were funneled into a “clearing house” corporation known as Thunder Bay Mortgage Company.

In some instances, the SEC alleges, the Jacobsons bought properties they had supposedly sold for a profit with another shell corporation. They also allegedly moved their money into joint accounts to make it appear to investors they were committing their own capital to a project, only to quickly transfer the money back to their own account.

The SEC complaint alleges investors in four of the Jacobsons' corporations received a “6 to 8 percent” return on their investments, though the combined income from the corporations was $32,200. Those corporations' expenses over the period they supposedly profited were $1.3 million.

The complaint argues that Thunder Bay is insolvent. "As of Dec. 31, 2010, Thunder Bay owed investors and investor LLCs more than $103 million. As of the same period, Thunder Bay showed a net loss of over $2.2 million. Having no actual operations, Thunder Bay relied almost entirely on new investor funds as its source of funding. Without these new investor funds, Thunder Bay would immediately cease operation.”

Wendell Jacobson and his brothers Gene and Evan financed the construction of a 21,000 square foot office in the farming community of Fountain Green in 2008.

Wendell Jacobson is the former chairman of the Sanpete County Republican Party. Gene Jacobson is the chairman of Sanpete County’s planning and zoning commission. Neither have been charged in connection with the case.

Calls to the Jacobsons were not returned. Mark Pugsley, the Jacobsons’ attorney, told Bloomberg Businessweek that the two men have cooperated fully in the investigation and intend to “vigorously defend the case.”

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Story written by Christian Probasco with contributions from Alex Cabrero.

[Colofornian]

Wow..I have learned so much from all of you. Makes me so sad for Mormons that follow this con man, Joseph Smith..it really does.

And that is the proper mix: That we don't let info stay upstairs, but rather let it permeate our hearts so that it increases our pathos, our compassion, and our love for Mormons.

Despite all of this, I don't think less of Mormons; I think more of them -- and they're held more in my prayer.

(There's more Mormons who are victims -- spiritual and financial -- than there are who are predators (Mormon mishes and the financial Ponzi schemers).

[BlueMoose]

http://www.rustcoin.com/store/images/P301c.jpg

[PeachyKeen]

“Despite all of this, I don’t think less of Mormons; I think more of them — and they’re held more in my prayer”

As they are in mine.

[SENTINEL]

The other side of this sad story are good families who risk too much based on the quid pro quo "works" teachings of the LDS sect. They think, "God has my back because I (fill in the blank)", so I'll go into debt to invest, or quit my job and move on a whim, or (fill in the blank).

I know one father of 6, no skills or schooling, getting by by working hard selling cars. Bought a decent house one summer, then the next took off on some crazy out of state work-now-get-paid-later scheme with a couple other mormons. He told me but wouldn't take any advice...All he would say was it was other mormons and God would look after them.

Well, he lost everything including his family.

[Elsie]

In my own way, I've kind of been the missionary for Longaberger,"

I saw that as well.

When reading about the MORMON writeup in the Longaberger mag; it was apparent that the PR output of MORMONism, Inc. was quite in view.

Unless LONGa has some OTHER input from OTHER sources, they'll continue to believe the pap that has been given them.

[Elsie]

There's more Mormons who are victims -- spiritual and financial -- than there are who are predators

Amen and AMEN!

[Godzilla]

and your point is???????????

[Elsie]

http://www.rustcoin.com/store/images/P301c.jpg

 

 

Here's how to post pix:

 

<img src="http://www.rustcoin.com/store/images/P301c.jpg"> 

[SENTINEL]

What I am wondeing is why is Moose posting a pic of evidence of Joseph Smith's bank fraud ?

Moose, are you breaking free ?

[BlueMoose]

Actually it’s not a bank.

[BlueMoose]

http://www.ohiohistorycentral.org/entry.php?rec=536&nm=Panic-of-1837

[BlueMoose]

http://www.landandfreedom.org/ushistory/us8.htm

[Elsie]

The Kirtland Safety Society BANK

O...
K...

[SENTINEL]

Bluemoose:"Actually it’s not a bank."

Folks this will go down as the MOST intentionally deceptive defense of FLDS/LDS "prophet" Joseph Smith, I have ever witnessed.....And is a perfect match for an LDS financial fraud thread.

Moose is arguing, apparently, that Joseph Smith did not steal tens of thousands of dollars through counterfeiting because he did not form a bank. He posted the lower note as proof....Lets' look closely at the details, for in them is proof in writing, for all to see, of the method of deception of MORMONISM....THE "RELIGION" OF THE ASTERISK.

Note three things between the notes:

1. The top note is number 716 and the lower one is number 2053.

2. The first note, #716 clearly says "BANK" in large type....the lower note, #2053, has the same large type "BANK" with very fine print saying "anti" before and "ing co." after. This is the image Moose posted claiming Smith never formed a bank. Smith obviously realized he was going to get busted so he tried to slime his way out of charges with this change while continuing to rob through fraud. The receivers of at least 716 3 dollars Smith bills were told in writing this was a bank, PERIOD.

3. Note the signatures on bill #716. Joseph Smith's personally hand signature next to the title "CASH", ans Sidney Rigdon next to "PRES", as in BANK PRESIDENT. Now note bill #2056, you'll see that the titles next to the signature are now just square blocks...Trying to distance themselves to an extent from the fraud they have committed.

Smith exchanged these fake 3 dollar bills, TENS OF THOUSANDS OF DOLLARS WORTH, for goods and services, and in the end, after the dust settled, the folks who received them had a worthless piece of paper.

Thank you moose, for posting the 2056th signed confession that Joseph Smith was a liar and a thief....And to all reading freepers, REMEMBER THIS...the LDS "CHURCH" IS A CULT OF DECEPTION !!! THIS IS THE ENVIRONMENT THAT RAISED ROMNEY AND REID !!

The saddest thing is that I know Bluemoose and Saundra really, truly believe they are defending an innocent "prophet", and this should be evidence to all of the level of brainwashing that goes on within the breakaway LDS sect of the mormon cult. Remember this next time they tell you they are Christians*, they don't have a tithing audit*, they don't believe in polygamy*, Romney is a conservative*, they believe the bible*, etc*, etc*, ETC* !!

[SZonian]

Oh good grief...really?

[SZonian]

I noted the marked out “titles” on the notes next to the signatures as well and was curious as to why they wouldn’t want to be “associated” or identified as the purveyors of the notes.

You did an excellent job in pointing out the deception there Sentinel.

[greyfoxx39]

Excellent post, Sentinel.

[Elsie]

Here ya go; matched to size and coloration:

http://i591.photobucket.com/albums/ss354/elsieel/LDS3dollars.jpg

[Elsie]

Interesting side note:

http://www.civil-liberties.com/pages/money.html

Ha ha! I said NOTE!!

[SZonian]

http://stevebloor.wordpress.com/2011/12/18/letter-to-ward-members-re-resignation-as-their-bishop/#comment-244