Career Ponzi Schemer Admits 3rd Real Estate Investment Scam

admin —  May 3, 2013 — Leave a comment

Wayne Reed Ogden, 48, Koosharem, Utah, charged with wire and securities fraud in connection with a Ponzi scheme involving real estate, pleaded guilty in federal court to one count of wire fraud and one count of securities fraud.

In a separate case tried to a federal jury earlier in 2013, Ogden was convicted of mail and wire fraud in connection with another real estate Ponzi scheme. As part of the plea agreement executed April 12, 2013, federal prosecutors and Ogden agreed to recommend 120-month concurrent sentences in both cases. Ogden also admitted to owing restitution of more than $3 million in each case.

Ogden admitted, as a part of the plea agreement, that from September 2005 to September 2006, he devised and executed a scheme to defraud investors. Throughout the scheme, Ogden was on parole with the state of Utah stemming from a 1998 conviction in connection with a third real estate Ponzi scheme. As a part of his parole restrictions, Ogden was prohibited from participating in and soliciting investment funds or any activities related to real property investments. Ogden admitted that despite these restrictions, he participated in investment activities involving real property and misled his parole officer into believing he was in compliance with conditions of his parole.

Ogden admitted to recruiting his brother, co-defendant Terry Ogden, 47, Mesquite, Nevada, to form Paradigm Acceptance, LLC and directed him to open a business bank account for the company. Ogden admitted he operated, controlled, and managed Paradigm throughout the fraud period and that he misrepresented to his parole officer that he worked for Terry and that he had limited responsibilities with the company, knowing that his parole officer would have taken immediate steps to terminate his involvement with the company if he knew the truth.

Ogden admitted creating a business plan that included finding financially distressed homeowners; negotiating their personal debts and/or mortgages; using investor money to pay off negotiated personal debts and/or mortgages; securing refinancing for homeowners; and requiring a fixed fee of $1,500 plus a percentage of money saved by virtue of Paradigm’s negotiation efforts. Throughout the fraud period, Ogden or other individuals acting at his direction solicited investors to invest in the business plan, promising returns ranging from 20 percent over a two to four-week period to as much as 100 percent over several days. Investors also were told that their investments involved little or no risk because they were secured by homeowner properties.

Ogden admitted that rather than using investor funds to pay off homeowner debt, he used those funds to make Ponzi payments to prior investors, pay business expenses, and pay personal expenses for himself and his brother, Terry. Ogden admitted that beginning in May 2006, Paradigm began receiving complaints from investors who were owed returns or were demanding the return of their principal. In response to the complaints, Ogden and his brother issued checks to investors knowing they would be returned for insufficient funds until new investor money was received. They also provided investors with false excuses, blaming the delayed returns on bank errors, failures in the fedwire system, and delayed loan refinancing. Despite these complaints and problems, Ogden and his brother continued to solicit new investments into Paradigm, knowing that investor funds would be diverted and used primarily to make Ponzi payments to prior investors.

The case against Terry Ogden, who was also charged in the indictment, is pending.

The case is being prosecuted by the U.S. Attorney’s Office in Salt Lake City. The FBI, SEC, Utah Attorney General’s Office, Weber County Attorney’s Office, Utah Division of Real Estate, Utah Division of Securities, Utah Insurance Fraud Division, and the Utah Department of Corrections contributed to the investigation.


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