Woman’s money was ‘all on paper’
Widow’s monthly statements were 'wonderful’ until she connected the dots
Mary Ellen Coffee was careful with the money she was putting aside to leave to her four children, and that care seemed to be paying off.
Coffee, a 77-year-old Montrose resident, discovered Valley Investments in Grand Junction from a newspaper advertisement four years ago, and she decided to try it, starting small.
“I started with $11,000, and it got to be $15,000 quite quickly,” she said.
No problems cropped up, and Coffee put more money into Valley Investments, 1445 N. Seventh St.
In all, she made four investments with the firm and watched her statements reflect growth at a 14 percent clip.
Coffee’s plan was to put the money away, not for a rainy day but for the day she no longer would be there. That’s why she made but one small withdrawal, leaving the rest invested to grow at a compound interest rate.
“I wanted it to grow,” she said.
When Valley collapsed last month, Coffee found out that the growth was an illusion.
“It was all just paper,” she said.
A Denver court closed Valley Investments at the request of Colorado Securities Commissioner Fred Joseph, and Joseph now is seeking an order preventing Valley owner Philip Rand Lochmiller and his son, also Philip Lochmiller, from disposing of their personal property. A proposed court order also would require the Lochmillers to turn over their vehicles and would limit each of them to $7,000 a month from the business, which is now in the hands of a receivership.
In court papers, receiver Kirk Rider described Valley Investments as appearing to be a Ponzi scheme, in which investors’ promised returns come from money given to the company by new investors.
While the company has assets such as manufactured-housing subdivisions in Colorado, Utah and Idaho, the value appears to be far less than the estimated $30 million taken in from investors, Rider said in an affidavit.
Valley Investments is under investigation by the FBI and the Colorado Securities Commission.
When Coffee was raising her family, “I never could give the kids much,” she said.
Salting the wound is the fact that much of the money Coffee used for her investments with Valley came from her own inheritances from her husband and parents, and it pains her to think that she might have lost the money.
“I feel so bad about it,” she said ruefully, then angrily, “I think (fraud) ought to have the death penalty!”
Coffee, a widow with four children, cleaned houses for a living, she said.
Like other investors, Coffee was invited to investor parties and visits to Valley’s projects, such as the manufactured-housing parks in Mack and Vernal, Utah, but she never went to them.
The statements she got from the company were “wonderful,” she said, but it wasn’t until Valley Investments collapsed that she inspected the paperwork and connected some dots.
She never received the deeds of trust she requested, and the documents she was provided had no seals marking them as notarized documents, Coffee said.
“I never could understand how he could make so much money paying that kind of interest,” Coffee said, “but I was happy to get it.”
Lochmiller, who has been advised by his Denver attorney not to speak to investors, seemed “like a really nice guy,” she said.
In retrospect, she said, “You kind of wonder what kind of guy he really was.”