SALT LAKE CITY -- Wayne Ogden's DEA handler testified to his major help in a large club drug bust, as well as the FBI's indifference to his offers to do the same for mortgage fraud.
Gerald Kaphing of the DEA is a keystone in the defense's case begun Tuesday at former Weber County swindler Ogden's federal fraud trial. The trial began Jan. 23 and could go to the jury by the end of the week, although it is scheduled for several days next week before Judge Clark Waddoups.
Kaphing is currently a senior inspector in the DEA's Washington, D.C., headquarters after 17 years as an agent working in numerous locations around the country, including five years in the Salt Lake office from 1999 to 2004.
Kaphing said Ogden in August 2000, while still in Utah State Prison, called the DEA's Salt Lake office to offer information on drug dealing on the Wasatch Front. By the time Ogden was paroled in November 2000, Kaphing signed him up as a confidential informant based on what he knew of his old friend Josh Christensen's role in dealing "club drugs," such as ecstasy and GHB, or the date-rape drug.
On New Years Eve, Dec. 31, 2000, Ogden went with Christensen and cohorts to Las Vegas to celebrate.
"It was an opportunity to re-ingratiate himself to those players," Kaphing said.
Ogden told him he knew Christensen and some of his crowd since childhood, and they accepted him even though he never drank, smoked or used drugs.
In early 2001, Ogden went to work for Christensen's Salt Lake County real estate firm Northland Properties, Kaphing said. He had daily contact with Ogden on Christensen's drug network, he testified, often several times a day, usually by cellphone until May 2001 when Christensen and associates were arrested.
Formerly of South Ogden, Christensen was busted at his North Salt Lake home, the DEA at the time calling him the state's largest distributor of the aforementioned club drugs. Christensen was sentenced to 64 months in federal prison in 2002. Kaphing said Ogden's help was crucial to the Christensen case.
Ogden also began funneling information on mortgage fraud to Kaphing, who eventually connected Ogden with the FBI, because the DEA only did drug cases.
He set up a meeting on Sept. 27, 2002, for Ogden with FBI Agent Carol Covert, of the FBI's Provo office, at Kaphing's Salt Lake DEA office on South Temple. Kaphing sat in on the meeting as host, he said, but didn't listen much to what Ogden was sharing with Covert, as he was working on another case of his own with a pending deadline.
"From talking with her after the meeting, she was not interested in what he had to say," Kaphing said.
A few weeks later, Kaphing said, Ogden called him to say he hadn't heard back from Covert, and had been trying to reach her. Kaphing said he didn't tell Ogden of the agent's disinterest.
A few weeks after that, a more frantic Ogden called Kaphing again to say he still had no contact with Covert
"He said a closing was coming and a lot of people were going to lose a lot of money, and he needed some guidance," Kaphing testified.
He then called Covert.
"Covert was aware of the closing," Kaphing testified. "And she said Wayne was in it up to his neck, or knee deep, one of those expressions. She said they were going to let Wayne fend for himself."
Kaphing said he called Ogden back and only told him Covert was aware of his concerns, not her actual comments.
According to earlier testimony, the closing on Ogden's real estate proposal, the purchase of a 360-acre site in Kiowa, Colo., came Nov. 19, 2002, and within coming weeks and months Ogden went missing from his partners at the Sandy-based Empire Investment Group. Investors began contacting authorities about their missing funds and filing private lawsuits against Ogden and Empire.
On Jan. 27, 2003, Ogden finally got another meeting with Covert, according to testimony last week, visiting her Provo office, where he gave written statements as to his involvement in the Kiowa scheme, admitting to lying to investors and falsifying documents in what had become a Ponzi scheme. Despite the apparent confession, Ogden was not indicted until December 2007.
More than 15 Kiowa investors have testified since the trial began to losing up to $7 million total on the project, which never broke ground despite testimony that Ogden assured investors the 360-acre proposal had been subdivided and construction begun.
Ogden, 48, formerly of South Ogden, still owes restitution of $9 million-plus to approximately 500 jilted investors from his late-1990s Ponzi scheme in Weber County.