A Utah man facing scrutiny after his businesses filed for bankruptcy protection has taken the position that he was running a 'legal Ponzi scheme', and thus should not be subject to oversight. Dee Allen Randall, of Kaysville, Utah, filed Chapter 11 bankruptcy in December 2010, which allows a debtor to propose a plan of reorganization while holding creditors at bay. However, after allegations of fraud surfaced, authorities sought the appointment of an independent bankruptcy trustee to conduct an investigation and oversee the bankruptcy process.
Randall operated several Utah businesses, including Horizon Mortgage & Investment, Horizon Financial & Insurance Group and Horizon Auto Funding. The US Trustee overseeing the bankruptcy has identified at least twenty entities through which Randall did business, 12 of which are currently active. He advertised to potential investors, many of whom were retirees, that he could protect their retirement funds through investments in real estate, auto leases or insurance products. These various investments were conducted through the use of private placement memorandums ("PPMs"), which are detailed disclosures to potential investors of a securities offering that often outline a myriad of potential risk factors. Apparently, included in these offering documents was language to the effect that, while not described as a"Ponzi scheme", Randall would be transferring investor funds from company to company to meet obligations.
United States Bankruptcy Judge Joel Marker appointed a forensic accountant as the US Trustee, who has taken control of Randall's finances and is conducting an investigation. According to the Trustee, Randall has been less than cooperative with the investigation, soliciting investments after he sought bankruptcy protection and using funds without court permission.