Utah Businessman Sentenced in $180 Million Ponzi Scheme: State's Largest Financial Fraud Case Ever
Sales agent William J. Hammons, of St. George, Utah, was sentenced to one year in jail and 10 years of probation for his role in what reporters are calling "the largest case of financial fraud in the state's history" ("Utah businessman sentenced to year in jail in largest case of financial fraud in state history,"The Associated Press, April 16, 2011).
According to authorities, Hammons was the lead recruiter for VesCor, an umbrella firm run by Val Southwick that filed for bankruptcy in 2007. Approximately 180 investors lost at least $180 million when the firm went under. Southwick, who is serving nine consecutive prison terms of one to 15 years each for securities fraud, admitted that VesCor made Ponzi-style payments to investors.
CPA Gil Miller testified against Hammons on behalf of the state. According to the article, Miller's testimony was that Hammons introduced 190 investors to VesCor and was responsible for $47 million invested into the company by those same individuals. Hammons received over $10.4 million in compensation from VesCor over a ten-year period.
As reported by theAP, Hammons was convicted in February on nine charges for his role in the scheme, including operating as an unregistered securities agent and abuse, neglect or exploitation of a vulnerable adult. His original sentence was one to 15 years in prison for each of the four second-degree felonies and up to five years for each of three third-degree felonies, but the sentence was commuted after Hammons' wife asked for mercy.
The defrauded investors were likely put off by what could be perceived as a light sentence. Kyleen Sorensen, one of the fraud's victims, testified in court that she has had to file for bankruptcy due to her losses and that her property is under foreclosure. According to the AP, she said Hammons "never showed remorse."