SALT LAKE CITY (CN) - A father and daughter say three Orem-based businessmen bilked them of $925,000 in a Ponzi scheme disguised as "investments" in concerts by Kenny Chesney, R. Kelly and other headliners - who had nothing to do with the scheme.
Lauren Rudd and Dick Bickerton sued Ikon Partners LLC and its principals, Jarom and Dusty Dastrup and Jaren Ahlmann, in a federal securities complaint.
Rudd, a mother of five, says she met Jarom Dastrup while he bought a boat at the dealership where she worked. She says that Dastrup and his cohorts, none of whom are registered securities brokers, told her and her father that they could her savings and all her elderly father's retirement funds in "diversified areas, including entertainment ventures that produced and promoted events for various entertainment artists."
Rudd says the defendants claimed the investments would yield 15 to 18 percent returns, payable from 60 to 90 days from the date of initial investment.
She says the Ponzi men told her the money would be used to fund three concerts by R. Kelly, and "there would be other similar concert-investment opportunities subsequent to the initial investments," including shows by the likes of Kenny Chesney, Chris Brown and Maroon 5.
"Defendants claimed that their due diligence was so in-depth that they actually sat in the office of the famous artist known as '50 Cent' and met with high-profile industry executives who verified that the proposed investments were legitimate, secure, and lucrative," according to the complaint.
After they forked over their money to Ikon, however, Rudd and Bickerton say they discovered "that the proposed investments were completely fraudulent," and that the money had gone into a Ponzi scheme "masterminded by an individual known as Miko Wady."
The defendants never had mentioned Wady or his business, Dezert Heat Entertainment, to the plaintiffs, but Jarom Dastrup came clean about his firm's relationship with Wady in 2010, according to the complaint.
"In or around December of 2010, Dastrup informed plaintiffs that, prior to plaintiffs investment with defendants, defendants had knowledge of pending lawsuits and FBI investigations involving Wady based on allegations that Wady misappropriated finds of the previous investors in 'investments' similar to the proposed investments," the complaint states.
Wady, 35, bilked about 140 investors out of $25 million from 2004-2007 by promoting bogus concerts by The Rolling Stones, U2, Barbra Streisand, and more than 30 other well-known entertainers. He was criminally convicted of securities fraud in Arizona, and recently was found liable in the same state, in JDMANN LLC and Ikon Partners LLC v. Wady, for the illegal, concert-related schemes.
Wady pleaded guilty to 10 counts of wire fraud and money laundering in February this year, in exchange for which prosecutors dropped 27 other counts, according to the East Valley Tribune, a Cox newspaper that covers suburban Phoenix. He faces up to 11 years in prison.
Rudd and Bickerton seek treble damages of more than $2.7 million for securities fraud, breach of contract and breach of fiduciary duty.
They are represented by David Crapo with Crapo Smith of Bountiful.
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