Trial arrives for Lochmiller, fallen investors

File photo by Gretel Daugherty—A video feed will be available in Grand Junction of the investment fraud trial of Philip Rand Lochmiller, which will begin Tuesday in U.S. District Court in Denver.



070211 1a LOCHMILLER

File photo by Gretel Daugherty—A video feed will be available in Grand Junction of the investment fraud trial of Philip Rand Lochmiller, which will begin Tuesday in U.S. District Court in Denver.

Philip Rand Lochmiller, who authorities say bilked more than 400 investors of more than $30 million from his Grand Junction business, will get his day in court Tuesday.

His investors will get their day as well — many of them from afar.

Lochmiller will be tried in U.S. District Court in Denver, but a video feed of the trial will be open to the public in the Wayne N. Aspinall Federal Building, 400 Rood Ave., in Grand Junction.

At least half a dozen of the people originally identified as investors in what authorities have called a Ponzi scheme are dead, an investigator said. That’s particularly frustrating for one investor.

“People died, and yet he’s still out living the good life in his house,” investor Bruce Bainter said, voicing frustration about the time it has taken to bring Lochmiller to trial.

Lochmiller has remained free on bond while awaiting trial.

Prosecutors sought to conduct the trial in Grand Junction, but Judge Philip Brimmer opted to keep it in Denver, noting the small size of the federal courtroom in Grand Junction, among other factors.

Lochmiller, 63, faces one count of conspiracy to commit mail fraud and securities fraud, one count of conspiracy to commit money laundering, 20 counts of money laundering and 10 counts of mail fraud.

Several investors in Valley Investments are included among the 53 witnesses scheduled to be questioned by prosecution in the trial expected to run through most, if not all, of July.

Other witnesses against Lochmiller include his former executive assistant, Shawnee Carver, and stepson, also Philip Rand Lochmiller, according to the witness list.

Both made agreements with prosecutors and pleaded guilty in the case. Each faces sentencing after the elder Lochmiller’s trial. Carver faces as many as five years in prison, and the younger Lochmiller faces up to 15 years in prison. The elder Lochmiller could face a sentence at least as long as that if he’s convicted.

State authorities shut down Lochmiller’s business, Valley Investments, 1445 N. Seventh St., in May 2009, the same time that the FBI opened a hotline to contact investors in the company, which Lochmiller founded in 1994 in Grand Junction.

Lochmiller, according to the charges, withheld from his investors the knowledge that he had pleaded guilty in California to 30 counts of securities fraud.

At one point, Lochmiller, his brother, Stephen, and mother, Jo Alice, all were imprisoned in California after the collapse of Lochmiller Mortgage Co. in San Diego County in 1982. More than 1,600 investors lost an estimated $1.5 million in that case.

Lochmiller opened Valley Mortgage in downtown Grand Junction in 1994 and later moved to the Seventh Street address and did business as Valley Investments.

Between 2000 and 2005, Valley Investments acquired five properties, which it marketed to investors as affordable-housing subdivisions, including Country Living Mobile Park in Mack. Valley Investments also owned projects in Dinosaur and La Junta, as well as in Utah and Idaho.

Investors were promised returns of as much as 18 percent annually and were given papers showing they owned lots in the affordable-housing projects. In many cases, however, individual lots had several recorded owners. As many as 17 deeds were issued for the same lot deed, investigators said.

After state authorities stepped in, Valley Investments was placed in receivership, and the case has since been transferred to bankruptcy court.

A conviction would please investors, Bainter said, “but I don’t believe in white-collar crime there can ever be justice.”

Jury selection begins at 8 a.m. Tuesday, and the Grand Junction courtroom will open at 7:30 a.m. to accommodate viewers. People who are listed as witnesses cannot view the proceedings in Grand Junction until they are excused as witnesses, either by completing their testimony or by notification from the party who subpoenaed them that they no longer are needed.

Recording devices, such as camera phones, are prohibited in the courtroom, and people are advised to leave those items at home or in their cars.

Lochmiller has maintained his innocence since the business was shut down, and his attorneys have insisted Valley Investments suffered heavily as the bottom fell out of the economy in late 2008 and into 2009.



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