Last week the U.S. Attorney’s Office filed a 17-count indictment alleging money laundering, wire fraud and bank fraud in connection with an alleged Ponzi scheme that was run by John S. Dudley, age 56, of Sandy, Utah.
In this case Dudley pitched investors at investment club meetings in people’s homes. These were likely homes of people who are prominent in their local church or community, who then invited their friends and fellow ward members to hear a presentation. In some cases the hosts of the meeting may even have received a “finder’s fee” or other compensation if attendees invested (which is usually illegal).
I want to be clear that giving an investment pitch in someone’s home is not necessarily improper, but you need to be careful. They do this to leverage the trust of the people whose home you meet in. The idea is if you trust the homeowner you will be more likely to invest.
But wait! Just because you trust your friend or ward member DOES NOT mean that you can trust the person soliciting the investment. Just because you are meeting in the home of someone you trust does not mean that the investment is sound. Just because your neighbor thinks so-and-so is a “good guy” or a “good member of the church” does not mean that you should invest.
Your neighbor may have invested and may even be making tons of money. But even Ponzi schemes make money — at first that is. Past returns are not a valid indicator of future performance, you need to do your homework.
In this case Dudley sat in Utah living rooms and told potential investors that he was an experienced and successful investor. He said they could expect monthly returns of 5-10 percent, that he had not suffered a trading loss since 1978 and had never made less than 5 percent per month over the last 30 years. Those statements alone should have caused investors to run for the exit!
Like Bernie Madoff, Dudley allegedly told investors that investing with him was an “exclusive opportunity” with only a limited number of investors allowed to invest with him at one time, and he encouraged people to take out home equity loans on their homes to invest with him. Always a good plan.
He told investors that he would generate these returns by investing their money in a foreign exchange trading program, mining speculation, European and domestic stock options and commodity trading — all of which are extremely speculative investments.
So what did he actually do with investors’ money? He is accused of using it to pay earlier investors (a classic Ponzi scheme) and for his own personal use, including the purchase of two homes, a ski boat, meals, airline tickets, and gifts for his family. Not such a good investment after all.
Something you don’t know, is that John Dudley was under indictment in the UK. He had a trading operation on insurance options and spent a lot of time in Monaco. He had his trading licenses taken away and began working as a laborer and ‘contracts manager’ under his own construction company. He under bid deals for home improvements and then waited until he almost finished the job to add on costs. He left the UK after having done wrong by many in the construction world with a letter to one business associate saying he was not a trained in construction but had done his best. This was his past before going to the USA. If you want to know who John Dudley really is, speak to the people in Surrey and South London who he allegedly cheated. Research his indictments in the UK. Now he faces the same in the USA and all his family barring one or two married off children for green cards (speculation but plausible for his own green card rather than visa) have been shipped back to the UK. Why not just be honest? Its so much easier than ripping people off. I do hope he and everyone else who follow each other on MLM and Ponzi scheme matters learn from these errors. I also believe that the LDS community should be less eager on get rich quick business ideas…it just gives these types of men the fuel they need.
my name is Paul and i live in london England UK, regarding John S Dudley who has been a neighbour of mine for the past 30 odd yrs except for the times he spent in monaco and now the usa , i always thought he was a con man and after stumbling upon this i now know i was right.his wife Julie is back here living in the same council house as if nothing ever happend over there and has told us that John is still out there working.i just wondered if you knew the outcome of this case and would care to share with us or point me in the right direction to obtain the info.it would be much appreciated if you could.
thank you Paul
Paul the famous Paul Nelhams, how dare you! Don’t throw stones at others when you live in a glass house “mate”, it is no news you have issues with the law, you better be careful on your judgement. Or shall I say… “999 Paul… 999!!”
I haven’t thrown any stones here “mate”?? Just simply enquiring as to what’s going on maybe you could shed some light.i could throw stones but I prefer not to mention other rumours I’ve heard. Sophie ?
I am John Dudley’s Daughter. The one that you are accusing of marrying for my green card. Can I just say that your statement IS just speculation. I love my husband dearly and am very offended that you are implying otherwise. There is alot of talk around my father and most of it is untrue or speculation (just as with your assumption of me.) He is not a monster and alot of what has happened has been blown WAY out of proportion. I would appreciate it if you would check into your information before you state them as fact. If you knew anything about the immigration system then you would know that I cannot get my dad a green card just because I married an american. And if we are talking about being honest why not use your own name, Mr Joe Bloggs. Isn’t it far easier to trash talk people on the internet if there is no accountability? At least my Father is up front and HONEST about what is happening and if you truly knew him and my family you would know that. You would not have to speculate that I married for convienence and you would know if he had cheated people and not have to use words like speculate, plausable and allegedly.
Oh my dear Katy,
It is unfortunate that you are so misguided in the beleif of your father. I understand that you don’t want to believe he is a liar and theif. I have checked into all this info. I was on the front line of his schemes and lies. You have no idea how many lives John Dudley ruined financially to benefit himself, you and your mother. All the while, looking us in the face and taking our hard earned money. Yes, we did give him money, but we trusted him and believed in him and he used his faith and religion to swindle us all. He deserves to sit in jail, have all his religious rights taken away. Someday he will face our Heavenly Father and have to answer for his crimes. Until then, I hope you and your mother can hold your heads up and look yourselves in the mirror everyday without guilt. Your father sure can’t do that, and you know it to be true.
That’s very nice to hear. I just want the $100,000 USD I gave your father. He is about to go away for a very long time. He will definately get what’s coming to him. I am 1 of MANY with the same story. I have been to John’s hearings and know that your father had misrepresented how he was going to use investment funds. I had been to his house many times while he continued to lie to me about when I was going to get my money back.
Still waiting to see this 10 Million dollar painting, rocket suit, turn water into gold….
Katy, Katy, Katy you are so Wrong. Your Father is Guilty. Your whole Family is Guilty as they have also ‘enjoyed’ the benefits of your Dads cheating and lying schemes. Let’s be honest your ‘so called father’ has ruined so many lives here in the States and judging by other peoples feedback he also did it in the UK before coming here.
I hope your Dad gets the Prison Sentence he deserves and any extra ‘attention’ he may get from some of the other inmates. Tell him not to bend over to get the soap in the showers! He has financially ruined my parents life and they have nothing left to look forward to as they near retirement!I personally hope he nevers gets out.
I am out over $100,000 as well. I know of somebody that lost their retirement. I even know of a single mom that lost $5000. Who swindles a single mom out of her hard earned money? He plead guilty in February. Was supposed to be sentenced in June. Sentencing is set for September 3 at 10am. Expecting 5 years in prison and then deportation. Also, supposed to pay back $6 million plus to investors. Not sure where that will come from.. I would really like to at least know where my money went.