SALT LAKE CITY -- A new eight-count indictment was handed down Wednesday by a federal grand jury against convicted swindler Wayne Reed Ogden and his brother Terry Paul Ogden in connection with a possible Ponzi scheme.
The pair have been indicted on six counts of wire fraud and one count each of securities fraud and sale of unregistered securities.
The brothers were not placed under arrest. They have been summoned to appear for arraignment Aug. 1 in U.S. district court in Salt Lake City.
The indictment says Terry Ogden was the owner of Paradigm Acceptance LLC, a Nevada-registered corporation, and Wayne Ogden controlled the firm.
Between 2005 and 2006 the brothers operated a Ponzi scheme using capital from later investors to pay profits to early investors, the indictment states.
In total, Paradigm collected about $29 million from about 100 investors, according to the indictment.
Even though Paradigm lost about $2.7 million from business activities in 2005 and 2006, Terry and Wayne Ogden made payments of more than $23 million to investors, representing payments as profits from the operation of the business, according to the indictment.
In addition, Terry and Wayne Ogden paid themselves nearly $2 million derived from Paradigm, the indictment states.
Court records also detail the alleged scheme the brothers used to defraud investors.
Between 2005 and 2006, Terry and Wayne Ogden told investors Paradigm would use their funds to pay off the debts of financially distressed homeowners so the homeowners could refinance their homes, according to the indictment.
The brothers represented to investors that Paradigm would then assist the homeowners in renegotiating their mortgages at a lower rate, providing overall savings to homeowners.
In return, the homeowners would pay Paradigm a fixed fee of $1,500 and an additional fee depending on the amount they saved from renegotiating their debts and refinancing their mortgages.
Terry and Wayne Ogden also told investors and potential investors they would receive returns in excess of prevailing market rates, with some being promised as much as 100 percent return on their investment in a matter of days, states the indictment.
As the scheme began to unravel, Wayne and Terry Ogden began making excuses for their failure to pay investors and began making representations to lull investors into believing they would eventually be repaid, says the indictment.
They also failed to tell investors and potential investors that Wayne Ogden had previously been convicted of communications fraud, was on parole and was prohibited from soliciting and controlling investments, according to federal prosecutors.
Wayne Ogden was convicted of theft by deception and money laundering in 1997 in 2nd District Court in Ogden and had been ordered as a condition of his parole not to participate in any activity related to solicitation of investments or financial products. In that case, he admitted bilking about 500 investors in Weber County out of an estimated $7 million. His restitution in that case has risen to more than $9 million with interest.
Wayne Ogden was subsequently indicted by a federal grand jury in December 2007 on 12 fraud counts in U.S. district court in Salt Lake City, accused of bilking investors of several million dollars in 2003.
The new indictment handed down Wednesday supersedes the 2007 indictment. Terry Ogden has never been implicated in his brother's schemes until the most recent indictment.