Asset recovery grinds on after firm’s collapse

In $30 million Valley Investments loss, 1 victim under police scrutiny

Philip Rand Lochmiller—Appeals conviction for conspiracy, money laundering



LOCHMILLER_Phil

Philip Rand Lochmiller—Appeals conviction for conspiracy, money laundering

Even though Philip Rand Lochmiller is behind bars in Florence, unlikely to live to see his targeted release date of 2041, the fallout from the collapse of his business, Valley Investments, continues.

Perhaps the most visible of investors, Optical Shop pitchman Steve Bagga, well known for television commercials promising customers a “second pair free,” is now under legal scrutiny even as he battles with a bank to keep his house.

Lochmiller, meanwhile, has filed an appeal of his conviction this year on multiple counts of conspiracy and money laundering in which he contends that there was insufficient evidence of a conspiracy to convict him and that the trial court gave erroneous instructions to the jury.

And the attorney working to consolidate the assets of Valley Investments said a distribution of the assets is months out.

Lawsuits against professionals who worked for or with Lochmiller are “grinding through the process,” attorney Kirk Rider said.

“Our original estimate of many, many months ago of distributing 3 to 5 percent to investors at the end of the trail still seems reasonable,” he said.

Rider was originally appointed the receiver for Valley Investments when the business collapsed in 2009. More than 400 investors lost at least $30 million in the Ponzi scheme in which Lochmiller sold them lots in what he said were affordable-housing projects in Colorado, Utah and Idaho. The lots were to secure the investors’ holdings, but deeds of trusts frequently were stacked dozens high on the most desirable lots, rendering them worthless.

One of the investors, Bagga, and his wife, Tatiana Prokofieva, said they were interviewed by Grand Junction police about their dealings with Lochmiller and the conditions under which they obtained a $197,000 loan from US Bank in Grand Junction.

Grand Junction police confirmed the interview but said no other information was available because an investigation is continuing.

Don McBee, the attorney for Bagga and Prokofieva, said it appears the bank officials were working closely with Lochmiller and his son, known as Philip Rand Lochmiller Jr., because a loan officer completed the loan in the Valley Investments office and encouraged Prokofieva to sign for the money using her signature, but on the line reserved for Bagga’s ex-wife, who still owned a part of the house.

What appear to be allegations that Prokofieva forged her name on the loan documents are “nonsense,” McBee said, noting that Prokofieva signed her own signature and protested at the time that the documents reflected the name of Bagga’s first wife and not hers.

“I find the circumstance of that loan to be very suspect,” McBee said.

Prokofieva said she signed her name as instructed because the loan officer represented herself as a notary public. Notaries public are deemed to be impartial, knowledgeable officials in her native Russia, Prokofieva said.

McBee said letters to US Bank officials have gone without response.

US Bank officials, meanwhile, said they couldn’t comment on potential or pending litigation.

Lochmiller, meanwhile, is seeking a new trial in appeal papers filed Sept. 17.

In the appeal, attorney Paula Marie Ray said Valley Investments’ “demise was a result of an economic implosion” and that there was no specific agreement among Lochmiller, his son and an employee, Shawnee Carver, to further any conspiracy.

Carver and the younger Lochmiller testified against the elder Lochmiller under plea agreements and both are serving federal prison terms.



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