Lochmiller assures client on recording
Philip Rand Lochmiller told a prospective investor in March 2009 that he listed only one investor at a time on lots in Valley Investments projects.
Jurors in Lochmiller’s trial in U.S. District Court in Denver listened Monday to a tape on which Lochmiller could be heard pitching his business to the prospective investor, William Holmes, who surreptitiously recorded the conversation at the behest of the FBI.
Lochmiller, owner of Valley Investments in Grand Junction, is free on bond while he stands trial before U.S. District Judge Philip A. Brimmer.
Prosecutors allege Lochmiller bilked more than 400 investors out of more than $30 million in a scheme in which he tantalized new investors with high rates of return and used their investments to pay investors who had given him their money before.
On the tape, Lochmiller could be heard telling Holmes that he offered simple-interest payments of 14 percent on two-year investments of $20,000.
Investors were given promissory notes that were backed by deeds of trust on specific properties in Valley Investments’ low-cost housing projects.
Is there only one investor per lot, Holmes could be heard inquiring of Lochmiller.
Yes, Lochmiller replied, noting that it would be possible to put more than one trust deed on a lot, “but I don’t.”
Pressed by Holmes on what would happen if the project were to go belly-up, Lochmiller noted, “I’m not a bankruptcy attorney, but I’ll give it my best shot,” then stressed again that under the worst circumstances, investors still could claim the value of their lots.
Prosecutors allege, however, that Lochmiller did exactly what he denied doing in the taped conversation — stacking more than a dozen investors on the same lots, each of them believing they were in first position on the lots.
Only two investors ever demanded title-insurance policies, according to previous testimony by a Valley Investments employee, Shawnee Carver.
Lochmiller, who was sentenced to three years in prison in California in 1985, failed to tell investors of his criminal history, and prosecutors have said many investors would have kept their money had they known.
Lochmiller’s attorney, Daniel Smith, maintained before the jury that Valley Investments was a real company with a real business — building affordable housing in three states.
Jurors today are scheduled to hear from Lochmiller’s stepson, also Philip Rand Lochmiller.
The younger Lochmiller also entered a guilty plea in the case.
Investors who are interested in the progress of the case can receive an update by calling 303-454-0160.