Monthly Archives: August 2010

Former Stake President, Regional Representative… and Scam Artist

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R. Dean Udy, 71, a former stake president and regional representative in Brigham City, Utah was sentenced to 1-to-15 years in state prison last week on securities fraud charges.  He pled guilty to a scheme that ran for 12 years or more.  According to the article in the Ogden Standard Examiner, “Udy’s victims total 1,500, with an estimated loss of $20 million.”

Prosecutors alleged that Mr. Udy  “traded on his positions in The Church of Jesus Christ of Latter-day Saints, which included membership in a stake presidency and as a regional representative in Box Elder County” to gain people’s trust.  “People felt Brother Udy would never do anything wrong.”

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Commodities Trading – There’s No Such Thing as a Foolproof Trading System

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Here is another case brought against a purported “commodities trader” based in Utah.  According to the story, commodities trader Keith H. Debus “met the woman at a religious conference and misrepresented himself as a successful licensed manager of a high-yield fund that specialized in commodities trading.”  Unfortunately for her, when she asked for the money back he told her it was gone.

Trading commodities (like foreign currencies or FOREX trading) is complicated, volatile and requires a high level of expertise.  I have heard of stories of people who have lost substantial sums in a very short period of time in these markets.  Even experts will tell you that trading commodities is highly risky. Continue reading →

Even Ponzi Schemers Pay Their Tithing

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As a follow-up to my last post, my friend Lon Jenkins has just sued the LDS Church in a “claw back” lawsuit for the RCH2 receivership he is handling.  Lon is seeking return of at least $160,306 plus interest from the Church that was paid as tithing.  Virtually anyone who takes money from a Ponzi Scheme will eventually get sued (including law firms) and the LDS Church is no exception.  From past experience I know the LDS Church is pretty good about returning money received from individuals who are perpetuating these schemes, and I assume they will do so here as well.

Perhaps the more interesting question is why are these people paying tithing on ill-gotten gains in the first place?  Perhaps they don’t realize they are committing fraud, or perhaps they think that the Lord will somehow remove the taint on the money, or bless the scheme.  It’s hard to say, but either way its better to give the money back.

© 2010 Mark W. Pugsley, all rights reserved.

Clawback Lawsuits: How Investing in a Ponzi Scheme Can Bite You – Twice

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Over the past several years I defended about sixteen clawback lawsuits that were brought by the Receiver in the $200 million Vescor Receivership here in Utah.  The unfortunate reality of these cases is that many investors in Ponzi schemes ultimately get sued by the Receiver — even though they thought they were victims.

Although they usually don’t realize it, investors who invest early in a long-running Ponzi Scheme often receive more money back than they put in because these schemes typically pay out high rates of interest.  They might think they lost money because their principal is gone, but in reality they more than made it up in interest payments over the years — made with new investors’ money. Continue reading →