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Saturday, April 13, 2024 | Back issues
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$28 Million Ponzi Scam Is Over, SEC Says

SALT LAKE CITY (CN) - Two fraudsters took $28 million from 250 victims in a real estate Ponzi scam, promising "guaranteed returns" from renting homes in "lucrative areas of the country," the SEC claims in court.

Chad Deucher and Richard Clatfelter led the scam through their Orem-based company Marquis Properties, the SEC says in its federal lawsuit.

Deucher and Clatfelter, both 42, told investors that Marquis offered investments in turnkey real estate properties, promissory notes secured by real properties and joint venture agreements to buy real properties, the Jan. 19 lawsuit states.

Beginning in March 2010, Deucher and Clatfelter claimed Marquis was "a company of experienced property professionals specializing in acquiring, repairing, and managing high quality, cash-flowing properties in several markets across the country," the SEC says.

They claimed Marquis owned and managed investment properties in "desirable investment areas," including Indiana, Missouri and Ohio, and had "proven renovation crews, property managers and realtors on the ground to assist with all stages of the project, eliminating the need for direct involvement."

They claimed the investments were "safe, low-risk, or risk-free" because they were secured by a first trust on property "wholly owned by Marquis."

What they did not say was that the properties they offered as collateral were not owned by the company, were "substantially" encumbered and in "uninhabitable or blighted condition," and that Marquis was insolvent, the SEC says.

Ergo: "Because investors are being repaid from new investor funds, Marquis' operation is a classic Ponzi scheme."

Deucher, president and CEO, bought himself a house with the money, the SEC says.

Clatfelter, the executive vice president, gave his wife Jessica Deucher $376,300 from Marquis "for no apparent consideration," the SEC says. She is a relief defendant.

Representatives at Marquis could not be reached for comment on Wednesday.

The company's website, checked Thursday morning, represents Marquis as "experts" and "experienced property professionals."

"In an era where one bad day on Wall Street can practically wipe out retirement accounts, savvy investors are getting back to what makes sense: secured assets," the company says. "No matter what happens in the economy, property investors always own something of value: a home."

The SEC seeks disgorgement, freezing of assets, appointment of a receiver, and penalties for five counts of securities fraud violations.

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