An Idaho Falls man behind a $29 million Ponzi scheme was sentenced to eight years in federal prison on Tuesday. United States District Judge Edward J. Lodge sentenced Daren Palmer, 38, in what authorities described as the largest Ponzi scheme in state history. Palmer was indicted for the scheme in March 2011 following a two-year FBI investigation of Palmer following investor complaints. Palmer recently pled guilty to single counts of wire fraud and money laundering in May 2011, and faced up to thirty years in federal prison at sentencing.
From 2005 to 2008, Palmer operated Trigon Group LLC in Idaho Falls, Idaho. Palmer's plea agreement details a transaction in which David Swenson and others operating as Worry Free LLC, of Utah, invested $500,000 with Palmer's Trigon Group. To persuade Swenson to invest with him, Palmer sent Swenson and other investors a power point presentation that promised favorable rates of return and assured the safety of invested principal. In addition to Swenson's investment, Palmer also solicited nearly $76 million from sixty-eight additional investors. However, investors were not told that Trigon Group was experiencing financial distress, or that investor funds would be used to pay returns to other investors and to pay Palmer's personal and business expenses. Ultimately, Palmer lost more than $20 million of investor funds. The plea agreement also details a $110,500 purchase of jewelry by Palmer using proceeds of the fraud, constituting wire fraud.
Palmer was also ordered to pay $29,842,731 in restitution to defrauded investors. The Securities and Exchange Commission and the Commodity Futures Trading Commission have each already won civil judgments against Palmer.
A copy of Daren Palmer's Plea Agreement is here.
A copy of the Justice Department Release annoucning Palmer's guilty plea is here.