SALT LAKE CITY (CN) - Val E. Southwick took $180 million from investors in a 17-year Ponzi scheme, promising 8% to 24% annual returns on real estate investments, but spending the money on himself, the SEC says in Federal Court. Southwick, of Ogden, named many of his 150 bogus corporations and LLCs VesCor, VesCorp, or variations of it. "Virtually all of the VesCor real estate developments were unprofitable."
Southwick recruited many of his more than 800 investors himself. He gave them unregistered securities and promissory notes for their money. "A number of the investors were elderly, unsophisticated investors who invested retirement savings and/or borrowed against their homes to invest in VesCor notes," the SEC says.
Southwick devastated entire families, taking money from one family member after another, the SEC says. "None of the securities offered and sold by Southwick and the VesCor Companies were registered with the Commission, and no exemption from registration was available."
Southwick's alleged real estate empire was insolvent by 2003 but he continued taking investors' money, through misrepresentations, until 2006, the SEC says. He failed to disclose disciplinary actions taken against him by the Utah Division of Securities in 2002 and 2004.
The last money he is known to have taken was in September 2006, long after his financial charade was in tatters, the SEC says. Southwick took a man's entire $300,000 pension after assuring him that the money was "absolutely safe," then "simply misappropriated the funds to meet his and VesCor's obligations," the complaint states.
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