Valley Investments co-owner appears in federal court
Grand Junction Free Press
GRAND JUNCTION, Colo. – A man accused of cheating local investors out of millions of dollars during the past few years, made his initial appearance Thursday in federal court in Grand Junction.
Philip R. Lochmiller of Mack is charged with multiple counts of fraud and conspiracy in connection with the failure of Valley Investments. The counts range from conspiracy to commit mail fraud to money laundering.
He faces decades in prison if convicted as charged. Lochmiller, 61, appeared in court two days after he was indicted by a federal grand jury along with his alleged co-conspirators.
U.S. Magistrate Judge Gudrun Rice advised Lochmiller of the counts he faces before a courtroom packed with former investors. About 60 people attended the one-hour hearing Thursday afternoon.
Lochmiller was later released on a $100,000 personal recognizance bond. He is to return at 2 p.m. Dec. 22 for arraignment in the same court.
The judge attached a number of conditions to his bond including one that prohibits him from opening new lines of credit or making new credit charges.
Lochmiller was also ordered to surrender his passport; restrict his travel to within state limits; and, avoid contact with former investors and employees. That includes his son, Philip Lochmiller II, who was indicted on similar charges.
Other conditions also apply. The younger Lochmiller did not appear with his father on Thursday.
A third person, Shawnee Carver, 33, of Grand Junction was also indicted by the grand jury. Carver, a former employee, is expected to appear in court next week, authorities said.
She worked for the company from 2005 to May 2009.
Lochmiller, clad in blue jeans and a button-down shirt, was largely silent as the judge advised him of the counts he faces. He acknowledged the judge from time to time by saying, “All right” or “Yes, your honor.”
Only once did he utter more than a few words. That came at a point in the hearing at which he was being advised of his rights. He told the judge he had “spent in excess of $120,000 in legal fees so far.”
She later found Lochmiller qualified to be represented by a public defender, who is to be appointed at a later date.
Rice made the determination based on a financial form Lochmiller submitted to the court.
Lochmiller’s alleged woes stem from the failure of Valley Investments.
According to the indictment, Valley Investments, which was originally called Valley Mortgage, was incorporated in 1994 in Colorado. The business initially engaged in originating or brokering home mortgages.
The business was owned and operated by Lochmiller and his son.
In 1999, they entered into the affordable housing real estate development and housing sale business.
The business primarily involved the acquisition of vacant land, or existing mobile home parks and converting them to “mobile or manufactured home subdivisions.”
To finance the properties, they advertised and solicited investments with investors and promised returns as high as 18 percent in some cases.
Between approximately 2000 and 2009, the Lochmillers caused Valley Investments to receive about $31 million from about 400 investors, the indictment sates.
The defendants, among other things, are also accused of engaging in a scheme to commit securities fraud.
As part of the alleged scheme Valley Investments did not own sufficient property or assets to the investments as represented to investors. Nevertheless, they are accused of continuing to solicit investor funds for years even though the business was not making sufficient profit.
The defendants allegedly used new investment money to pay previous investors, operate the business and fund personal expenditures of the Lochmillers.
Reach Wyatt Haupt Jr. at email@example.com.
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