Near end, Lochmiller was coaxing money out of investors, brothers say
By GARY HARMON
In March and April, the owner of Valley Investments was scrambling more than usual for cash, investors said.
Little more than a month before he received official word that Colorado Securities Commissioner Fred Joseph was seeking a cease-and-desist order aimed at shuttering Valley Investments, owner Philip Rand Lochmiller was cajoling investors to invest ever more money into his enterprise.
He set an April 1 deadline for investors to renew their investments or transfer funds from individual retirement accounts so they could get 14 percent returns.
Lochmiller offered the rate by mail to “all new funds brought in and invested by existing investors and/or family members.”
Lochmiller also turned to two investors with whom he had dealt frequently and who had invested heavily and taken out little or no money.
Brothers Lou and Joe Zangerle agreed to put $25,000 each into Valley at Lochmiller’s behest.
They’d get their money back and more, the Zangerles said Lochmiller promised them.
“It was a done deal,” Lou’s wife, Charlotte, remembers Lochmiller telling them. “That was his favorite expression. ‘It’s a done deal.’ ”
The Zangerles said their losses in Valley are well into six-figure territory, though they declined to elaborate.
Valley was closed May 29 by a Denver district court. Investigations by the Colorado Securities Commission and FBI are continuing. No arrests have been made.
The FBI hotline for investors is 303-575-7012.
Lochmiller officially was made aware May 6 that the securities commission was looking into Valley, investigators said.
Lochmiller’s attorney has insisted that Valley and Lochmiller were the victims of an economy gone suddenly and unpredictably bad.
A receiver now in charge of Valley said the company has as many as 200 investors who had plowed as much as $30 million into Valley.
The Zangerles’ life savings are gone, and though they are in no danger of losing their homes, they will have to make deep cuts in their spending.
“I have my health, I have my wife and my house is paid off,” Joe Zangerle, 69, said.
He’ll probably have to sell his house in Gulf Shores and find a smaller place, though, he said.
“My grandkids got screwed out of their college education,” Joe Zangerle said. “That really ticks me off. The guy stole my life savings.”
Lou and Charlotte Zangerle own a Grand Junction home, but without the retirement income they anticipated, they will have to rely on Social Security, Lou, 71, said.
Both Zangerle brothers responded to Lochmiller’s spring appeal for money, even though both had reservations.
Even though the offer letter from Valley specified that new investments would be paid 14 percent, Lochmiller gave him a 16 percent rate for his $25,000 investment in a manufactured-housing park in La Junta, Lou Zangerle said.
He said he protested that it was too much, telling Lochmiller he was willing to accept far smaller returns in return for the safety of his investment.
“After all,” he remembered telling Lochmiller, “If you don’t make it, I don’t make it.”
Lochmiller demurred, though, telling him, “It’s a done deal,” Lou Zangerle said.
Lou Zangerle gave Lochmiller his check on March 31.
Joe Zangerle sent his check a few days later. Even though he missed the deadline, he also got 16 percent.
Lochmiller called Joe Zangerle at his home in Gulf Shores and kept him on the line for 40 minutes, pitching the La Junta project.
La Junta is the county seat with plenty of government workers, Joe Zangerle remembered Lochmiller telling him.
The call was unusual because Lochmiller never had called him before, Zangerle said, even though they had coffee several times when he still lived in Grand Junction, where he installed bank equipment.
To come up with his $25,000, Joe Zangerle had to sell some other investments at a loss and then mailed the check.
Twice during the interim, a Valley employee, Shawnee Carver, called wondering when the check was to arrive, Joe Zangerle said.
It was telling, the Zangerles said, that they both were pitched when it seemed unlikely they would be aware of an investigation into Valley; Joe because he lived in Alabama and Lou because he had just returned from a vacation.
The Zangerles’ experience matched that of another investor who tracked contacts and “increased activity by both
(Lochmiller and his son, also Phil Lochmiller) during March and April, 2009, with regard to our family,” said the investor, who asked not to be identified. “There was a flurry of new paperwork regarding releasing old deeds and obtaining ‘new’ deeds because we were not interested in out of state projects; we extended a promissory note for two more years on March 30, 2009 — a bit early as it was supposed to mature on May 20, 2009 — and we also signed up for a new promissory note on April 1, 2009.”
Lochmiller “knew what was going on when he took our money and that angers me more than anything,” Lou Zangerle said.
Though Lochmiller and Carver had contacted him frequently before, he could reach neither after his check arrived, though someone told him that a copy of his contract was in the mail to him, Joe Zangerle said.
He was told at one point that Lochmiller and Carver were in Denver purchasing manufactured houses for the La Junta project, he said.
A questionnaire distributed to investors by the FBI asks them to describe their dealings with both Lochmillers and with Carver.
Documents unearthed by the receiver show that Lochmiller sent $25,000 from New Liberty Homes, a Valley company that purchased manufactured homes, to Lochmiller’s Denver law firm on May 15. A former bookkeeper told the receiver a second check containing a similar amount of money was sent to the law firm about the same time, the receiver said in court papers.