Lochmillers in court hearing
Valley Investments employees, already aware that state regulators were asking questions about the business, were seen trashing records May 19, 2009, 10 days before the business officially collapsed, an investigator testified Thursday.
Valley Investments employees apparently were so anxious to get rid of business records that they didn’t notice they had tossed a new Rolex watch along with authenticating documents into the trash container behind the business at 1445 N. Seventh St., FBI Special Agent Jane Quimby testified.
More than 50 people, many of them among the 400 investors who pumped some $33 million into the business before it failed, packed the courtroom Thursday for a daylong hearing before U.S. District Judge Philip Brimmer in the Wayne N. Aspinall Federal Building in downtown Grand Junction.
Philip Rand Lochmiller, 62, and his son, Philip Rand Lochmiller Jr., 38, and a business employee, Shawnee Carver, 33, face 33 criminal counts related to mail and securities fraud in connection with the operation of Valley Investments. All three are free on personal-recognizance bonds.
Prosecutors asked Brimmer to conduct the trio’s trial in Grand Junction. Brimmer made no immediate decision on that request Thursday.
He did, however, reject a defense motion to throw out some evidence Quimby seized in Loma. The evidence was obtained as the result of a chase in which Lochmiller Sr. succeeded in temporarily shaking FBI agents who were covertly following him after he left the business with the items in his gold Cadillac.
Quimby testified that she took pains to make sure the Lochmillers and the employees at Valley Investments were unaware of the FBI’s criminal investigation, which began in February 2009, until May 20 of that year.
The covert investigation included carting off the trash container the evening of May 19, so Quimby and other law enforcement personnel could peruse its contents away from the business.
Alarmed by the activity of the Lochmillers and the employees, Quimby said she decided to keep Valley Investments under surveillance the next day while she sought a grand jury subpoena for Valley Investments’ business records.
She recruited an FBI analyst, IRS investigators from Grand Junction and eventually two FBI agents from Glenwood Springs to monitor the activities without being noticed.
Eventually, the operation turned into a “traveling surveillance” of the elder Lochmiller, who was seen putting a large box and a computer tower into the back seat of his car and driving off, Quimby said.
Investigators followed Lochmiller to a bank, where he met a woman in the parking lot and then drove on.
At some point, Lochmiller “began driving somewhat erratically,” making left turns from the right lane and similar maneuvers.
“He seemed to be aware he was being followed,” Quimby said.
Lochmiller slipped his followers for about 45 minutes, until Quimby followed a hunch and drove to Lochmiller’s residence at 2188 M Road and saw him leave the property in the same vehicle with the box and computer tower still visible in the rear seat.
From there, Quimby said, she trailed Lochmiller to the gas station in Loma, where he stopped to fill up.
There, she said, she approached him, identified herself and told him she had a subpoena.
“He was completely cooperative,” Quimby said of Lochmiller.
When she asked for the box and computer tower, Lochmiller told her he had no objection, but he wanted to check with his attorney, Cliff Stricklin of Denver.
After a brief conversation on his cell phone, Lochmiller told her that Stricklin wanted to speak with her, Quimby said.
Stricklin told her not to take anything, but Quimby said she responded that she was seizing the items nonetheless, citing the subpoena, which by then had been obtained.
Lochmiller was allowed to leave after the evidence was removed.
Two days later, on May 22, the FBI established a hotline for Valley Investments investors to call.
A Denver District judge ordered the business shuttered on May 29.
No date was set for Brimmer to decide whether to conduct the trial in Grand Junction.
Before founding Valley Investments in Grand Junction, the elder Lochmiller served a prison sentence in California after pleading guilty to securities violations.