Denver District court shuts down Valley Investment
A Denver District court on Friday shut down Valley Investments and appointed a Grand Junction law firm to take custody of the business.
The receiver, Kirk Rider, said preliminary estimates are that Valley’s losses could run “north of $20 million.”
He has been contacted by some investors who had stakes of as much as $1 million in the company, Rider said.
“The people are largely elderly,” he said. “There are some heartbreaking stories in this.”
Colorado Insurance Commissioner Fred Joseph said his agency would continue its investigation into Valley Mortgage and Valley Investments, 1445 N. Seventh St., which are owned by Philip R. Lochmiller, and that the investigation could result in him seeking criminal penalties.
Lochmiller’s attorneys, Cliff Stricklin and Mike McPhail of the Denver law firm of Holland and Hart, said Lochmiller was cooperating with the investigation and would “consult” with Rider as Rider evaluates the company’s assets, which the court ordered frozen.
The assets are not worth as much as they once were, Stricklin said.
“It does appear that Valley Mortgage and Valley Investments are another victim of the economy,” Stricklin said.
Lochmiller, who operated Valley with his son, Phil Lochmiller Jr., agreed to the orders without admitting or denying any allegations brought by the state securities division.
The division issued a cease-and-desist order earlier this month after an unidentified customer raised questions about the company with the division, citing questions about the company’s promises of guaranteed returns of 12 percent.
The cease-and-desist order cited Lochmiller’s failure to inform investors he had been convicted of a felony, but that issue wasn’t raised in the court filing.
The civil case filed by the division charges Lochmiller and Valley with offering unregistered securities in Colorado.
In enticing investors to invest, Lochmiller told investors that investments of $20,000 to $30,000 were secured by recorded trust deeds in names of investors for individual lots, the division said.
Valley holds property in Colorado, Utah and Idaho.
“It was important to get a receiver in place here to preserve as much of the remaining assets as possible for investors,” Joseph said. “But our investigation of this matter will continue.”
Rider said he will establish a Web site for investors and the general public as he works to quantify the assets of the company and the investments it held. Among the potential avenues he’ll consider will be seeking civil forfeiture of the company and personal assets under the Colorado law, he said.
Lochmiller’s attorneys stressed that his goal “is to see people impacted as little as possible.”
“Since Day 1, he’s wanted to do the right thing,” McPhail said.
Valley also is under investigation by the FBI, which has set up an investors’ hotline at 303-575-7012. Investors are asked to leave contact information, and they will be sent questionnaires in 30 to 60 days. Agents will review the questionnaires as part of their investigation into Valley.