A federal judge sentenced a Colorado man to eight years in federal prison for his role in a Ponzi scheme that bilked investors out of over $30 million. Philip Lochmiller Jr. faced up to fifteen years in prison after he pled guilty in November 2010 to one count of conspiracy to commit wire and securities fraud and one count of money laundering. Lochmiller's father, Philp R. Lochmiller Sr., who chose to go to trial rather than to plead guilty, was convicted by a federal jury in July of thirty-one counts, including money laundering, mail fraud, conspiracy, and conspiracy. He currently is awaiting sentencing.
The Lochmillers operated Valley Investments, which purported to originate mortgages for as a licesned Colorado mortgage broker. Along with assistant Shawnee Carver, the company acquired several parcels of land to develop affordable housing communities. Newspaper advertisements solicited potential investors to finance the acquisition, promising annual returns of ten to eighteen percent in return. Investors were given promissory notes that were purportedly secured by lots of land in the communities. In total, over $30 million was raised from investors. However, instead of using the funds for business purposes, the defendants paid expenses, personal bills, and made payments to existing investors in the form of interest and principal repayments. The scheme came to an end in 2008 when the three were indicted.
Shawnee Carver was sentenced alongside Lochmiller Jr., and received a two-year sentence. The elder Lochmiller faces a sentence of up to 415 years in federal prison, although federal sentencing guidelines will likely recommend a lower amount.
A copy of the criminal complaint is here.
A link to the website established by the Receiver appointed to distribute assets to victims is here.