OGDEN -- In a case that moved state regulators to issue a warning about "affinity fraud," a Kaysville investment counselor is charged with pilfering at least $750,000 in client funds from 2005 through 2012.
Jeffrey A. Larson, 43, is charged with communications fraud and engaging in a pattern of unlawful activity, both second-degree felonies each carrying up to 15 years in prison.
Keith Woodwell, director of the Utah Division of Securities, in an email described the complicated allegations: Larson used money from investors to open brokerage accounts through Ameritrade in the investors' names.
"Larson had checks from the accounts sent to three separate addresses where he could retrieve the checks without the investors' knowledge. These checks were deposited into bank accounts for either Peak Asset Management, Larson's personal account, or the personal account of Larson's mother."
Neither Larson nor his company were licensed with the securities division, Woodwell said.
"Larson signed the applications, trade authorization forms, check writing applications, and in some accounts even signed redemption requests in the investors' names without their knowledge ...
"There are at least six investors whose combined investment was over $750,000. The total losses and total number of investors are still not clear, but likely exceed these amounts."
Among those investors is Ann Oldroyd, of Morgan.
"He drained my account down to zero," Oldroyd said. "It took seven years. I asked him, and he told me: He had come on to difficult times and was only using our money to live on. He seemed to think that made it OK."
She said she met Larson, a pharmaceutical sales rep, through an Ogden friend, who also eventually lost money to Larson. They all worked in the heath care field, Oldroyd as a physical therapist.
They met with him numerous times over a year before going to authorities "because he said he was going to make it right. We were giving him an opportunity to do that," Oldroyd said.
"After he was given several chances, he didn't come through with anything he said. He even finally suggested I get an attorney. He admitted guilt."
She lost more than $200,000, according to the allegations.
"He's changed the course of my life," said Oldroyd, 59. "I worked long and hard for that, as most people do. I'm now looking at a completely different retirement.
"I don't want him doing this to anyone else. It affects you mentally, physically, in every way -- even how you feel about your fellow human beings."
Woodwell said the charges include allegations Larson created and provided false balance statements to investors to disguise the actual balances in the investors' accounts.
Larson is scheduled for a Nov. 7 preliminary hearing in 2nd District Court in Ogden before Judge W. Brent West. Larson's phone in Kaysville is out of service, and calls to his public defenders Friday were not immediately returned.
Woodwell said "affinity fraud" is one of the more common claims his division ends up investigating.
"Marketing a fraudulent investment scheme to members of an identifiable group or organization continues to be a highly successful and lucrative practice for Ponzi scheme operators and other fraudsters," he said.
"They know that people tend to trust someone who is perceived to have a common interest, beliefs or background and use that trust to exploit members of specific groups."
Woodwell urged caution for investors, especially with upcoming changes.
"With the passage of the JOBS Act lifting advertising restrictions on securities and other investments, consumers face even greater challenges."
New advertising will be "flooding the marketplace," he said, as well as currency vehicles such as Bitcoin.
"Rest assured, our messages at the state level remain stable: Choose your investments carefully, don't jump into something you don't fully understand, and work with a licensed professional when it comes to protecting your money."
The best way to judge investment decisions, he said, is to "ask questions. And when you think you have asked all the questions you have, ask more questions."
"As Bernie Madoff, the king of Ponzi schemes, once said, he only turned people away when they asked too many questions."
Contact reporter Tim Gurrister at 801-625-4238 or firstname.lastname@example.org. Follow him on Twitter at @tgurrister.