Freeze Valley Investments’ assets, filing asks court
Valley Investments and its various companies “appear to have been a Ponzi scheme” that affected more than 200 investors who put more than $30 million into the scheme, according to court papers.
The actual value of the assets in the fund so far “appear preliminarily to be worth only a fraction of the amount that the investors are owed” by Valley Investments, Grand Junction attorney Kirk Rider, the court-appointed receiver, wrote in an affidavit.
The affidavit is part of the package of materials filed by Colorado Securities Commissioner Fred Joseph, which seeks a temporary restraining order preventing Valley owner Philip Rand Lochmiller and his son, also Philip Lochmiller, from disposing their own assets or the assets of the companies they operated through Valley.
Joseph also is asking the court to require the Lochmillers to turn over collector, vintage or antique vehicles, including a 1954 fire truck, and to cap each of the owners’ income at $7,000 a month.
Company expenses ran between $10,000 and $20,000 a month and “were almost entirely for personal and family travel and expenses,” court papers said.
Phil Lochmiller Sr., as many of his investors knew him, was using company money on two houses and three vehicles, according to Rider’s affidavit.
Various personal expenses from Valley or some of its companies were a $6,700 monthly mortgage on Lochmiller Sr.’s home at 2188 M Road, $1,300 for property at 1010 Q 3/4 Road; $600 monthly for a Cadillac Escalade; $600 a month for a GMC truck; and $500 a month on a Range Rover.
Lochmiller was paid a salary of $100,000 a year in addition to the payments on his and his wife’s credit-card bills, Rider said in the affidavit.
Lochmiller Jr. was paid about $67,000 in base salary and received a bonus of 1 percent brought in from investors he solicited.
An injunction is needed, Rider wrote, because the Lochmillers have made efforts to put some property under different names or dispose of it completely.
Lochmiller Sr. in January transferred one piece of property previously held in his name only to that of his wife and himself, Rider said.
Lochmiller Jr. told a tenant in a rental unit that he was planning to leave the state and that he would make the tenant a “great deal,” Rider wrote.
When the tenant said he couldn’t qualify for a loan, “Lochmiller Jr. told the tenant that Lochmiller Jr. would provide funds to the tenant to qualify for a loan.”
No hearing was scheduled immediately on the injunction request, Rider said.
Lochmiller Sr. has served a prison sentence in California for the sale of unregistered securities and the securities commissioner has said he was doing the same thing in Grand Junction. In addition, he failed to inform his investors of his criminal past, according to papers filed in connection with a cease-and-desist order originally sought by the securities commissioner.
His investigation is continuing and Joseph said he could seek criminal charges in the collapse of Valley.
The FBI also is investigating and has set up a hotline that investors can call. Investors will be sent a questionnaire asking them to detail their dealings with Valley and the Lochmillers.
The hotline is 303-575-7012.